(bonus if you know what I am referencing – no looking it up – honor system)

I’m not sure if that’s considered cheating, though.

dana: As Consumers we should be able to compare the cost and quality of health care services. How much is a specific surgery at one hospital, as compared with another?

Well, because there is no single price for a specific surgery at one hospital. Call your local hospital, ask how much for a knee replacement. They won’t tell you the price till you tell them what insurance you have. The price is not the price. And even when you do coax a number from them, it won’t be the whole price: the surgeon, the anesthesiologist, the drugs, the follow up therapy, the durable medical equipment, etc. are all billed separately. And afterwards, you (and the insurance company) are likely to be billed something very different from the quote.

Martinned: So in your analysis capitalism isn’t working here? After all, insurance companies have an incentive to drive down medical costs, so if they’re not trying to do that, what’s wrong?

Lets not forget insurance companies are not the only players at stake. The more uninsured patients requiring treatments there are, the greater the chances hospital bills will end up not being paid. Hospitals are then left with no choice but to over charge those who actually pay their bills. All in all, it is not necessarily in a specific insurance company’s interest to insure everyone, for it increases the likeliest they will have to insure unhealthier customers. Ironically, the collective interest of these companies is to make sure everyone’s insured in order to keep the costs as low as possible, but their specific interest stands elsewhere.

Oren: (c) TREATMENT OF FAILURE TO PROVIDE DOCUMENTATION AS MATHEMATICAL ERROR.
Section 20.6213(g)(2) of the Internal Revenue Code of 1986 is 21 amended by striking ‘‘and’’ at the end of subparagraph, by striking the period at the end of subparagraph and inserting ‘‘, and’’, and by inserting after subparagraph the following new subparagraph: ‘‘(O) the omission of identifying information described in section 2238(b)(1) of the Social Security Act and required under section 336B(e)(2)(B).’’

Yikes! I’m terrified just from the headline of that section. “Treatment… as mathematical error” is the language the Internal Revenue Code uses to mean “If you do this, we can ‘correct’ what you did without any form of due process.”

The Unbeliever:
But with all the escapism, hocus-pocus, and magical hand waving of the entire series!

Somebody today already made the comparison of the MSM with Rita Scribner and the Daily Prophet compared to Fox News as The Quibbler. I laughed. Cant recall where I saw it though.

Adler did happen to notice how those pages were formatted, didn’t he? Once allowances are made for line-numbers, the bill has about 250,000 words – about the length of Harry Potter and the Order of the Phoenix.

Without the plot, charater development, or story.

But with all the escapism, hocus-pocus, and magical hand waving of the entire series!

Martinned: I’m not sure where you got that idea. Both under the current system in the US and under any proposed alternative, it is the insurance companies who are supposed to “limit or drive down prices”, since they are the ones “with the checkbook”.

Insurance companies have little incentive to keep prices low, because most consumers of health insurance don’t pay directly for the cost of that insurance. It’s paid for by their employer, or by the government, or it’s subsidized by tax breaks. Very few people actually shop for and buy their own insurance coverage.

That’s one of the reasons why removing the incentives to purchase insurnace through your employer is a good way to reduce costs. Encouraging people to pay-as-you-go for routine health care, and carrying only catastrophic insurance coverage, would be another way to go. The current proposals move in the opposite direction.

No, they’re not. They aggregate the bills and then pass them on in premiums. And those premiums keep rising. It’s more profitable to pass on the costs on than it is to draw a hard line on care rationing.

Now, eventually it’s likely to reach a point where the rate hikes cost more clients than the attempting to draw a hard line on claims does, but it appears we haven’t hit that point yet.

There’s no gotcha moment here, no matter how much you wish there to be one.

Bruce Hayden: Interesting that we can get arguments that insurance companies are supposed to be driving down costs because they have the checkbook, and that they make their obscene profits by denying coverage. Seems to me that you can’t have it both ways.

Sure you can: For a given insurance premium, the insurance company makes more money if it: a) drives down the costs of care or b) covers as little as possible.

Bruce Hayden: But, as the later posters have pointed out, the basic problem today with health care costs and health care insurance is that the consumers are the ones who can best save money, and they need to have incentives to do so.

Agreed, except that consumers don’t have the knowledge to take an informed decision, while they usually lack the funds to completely self-insure as well.

- consumers have autonomy (i.e. the moral right to decide what is done to them by whom), but not enough money to cover most serious procedures, nor the knowledge about medicine necessary to take an informed decision.
- insurance companies have the money, but lack the moral right to make all decisions, not to mention the detailed knowledge about what is wrong with the patient.
- docters have the knowledge, but lack the money (how cool would that be: flat fee family medicine or sth.), and should not take the decisions because they lack the moral right to and in any case are the ones who benefit from doing and prescribing too much.

Three groups (patients, docters and insurers) and three questions (Who decides? Who pays? Who knows?). My humble diagnosis is that there is no way to sort this out that is even remotely efficient. It just can’t be done. (Even apart from Baumol’s Cost disease.)

Capitalism is working. People demand more services, costs go up. The problem is that people don’t like paying high prices or being denied service, which is why there’s a constant search for someone with deeper pockets – hence the desire to get the government to pay for it.

After all, insurance companies have an incentive to drive down medical costs, so if they’re not trying to do that, what’s wrong?

No, insurance companies have a desire to make a profit. They alienate customers by denying claims, they alienate them less by raising premiums. Either one works from an insurance company standpoint. Hence, costs rise.

Also, don’t forget that HMO’s were fairly successful in containing costs, but people didn’t like the rationing aspect so they agitate for laws to be passed (patient’s bill of rights and the like) that rendered HMOs untenable.

If you want costs to drop, people need greater exposure to them. Right now most people are two levels removed from the cost of their medical care (insurance company contracted by their employer). There are no real incentives for individuals to self-ration their care. This doesn’t need to be the case, (HSAs, high-deductible catastrophic insurance, etc), but the current tax laws actively discourage this approach. And it would be a larger cultural change.

That you manage to observe a system without proper incentives that has been created by governmental tax policy that dates back to governmental wage freezes and find an indictment of captialism say a lot more about you than it does about the problem.

None of which to say that a more properly capitalistic health care system would be without flaws – only that the flaws would not have all of the same ones we’re seeing now. There needs to be reform, but the current proposals just exacerbate the problem.

Mark Buehner: “Capitalism”, sure. Its capitalism that set up the scheme heavily favoring companies to provide health insurance in exchange for tax rebates. Its capitalism that doesnt let insurance companies compete over state lines. Its capitalism that is about to outlaw catastrophic plans.

OK, so maybe “capitalism” was too vague a word to use. But still, whatever the merit of the restrictions you list, ordinary economic logic suggests that insurance companies should work to drive down the costs of health care, no matter how much market power they have, since they’re the ones stuck with the bill. So are they, or aren’t they? And if not, why not?

SG:

Both under the current system in the US and under any proposed alternative, it is the insurance companies who are supposed to “limit or drive down prices”, since they are the ones “with the checkbook”.

Exactly, which is why the current system is experiencing runaway costs and why no proposed alternative will do anything to rein in those costs.

Interesting that we can get arguments that insurance companies are supposed to be driving down costs because they have the checkbook, and that they make their obscene profits by denying coverage. Seems to me that you can’t have it both ways.

But, as the later posters have pointed out, the basic problem today with health care costs and health care insurance is that the consumers are the ones who can best save money, and they need to have incentives to do so. I, along apparently with a lot of others here, have an HSA that does a good job of that – and our HSAs with their high deductibles are on the way out, if this legislation passes.

If we leave the decisions to the government, or even the insurance companies, then the decisions of where to spend money on healthcare will be made in a one-size-fits-all, best for the entire population manner. Which might be fine, except that these decisions would be subject to politics, and we are already seeing the effects, with companies paying millions in lobbying costs to get Medicare approval of their products or services (I have a client flying to D.C. tomorrow for just this reason – trying to get Medicare approval of her company’s product).

There are really only two ways to limit demand. Either do it through price, which is countered by low or no co-pays, yearly limits, etc., or do it through rationing. HSAs and high deductible insurance plans do a good job based on price, which is why it is absurd that they are being effectively eliminated.

So in your analysis capitalism isn’t working here? After all, insurance companies have an incentive to drive down medical costs, so if they’re not trying to do that, what’s wrong?

“Capitalism”, sure. Its capitalism that set up the scheme heavily favoring companies to provide health insurance in exchange for tax rebates. Its capitalism that doesnt let insurance companies compete over state lines. Its capitalism that is about to outlaw catastrophic plans.

SG: Both under the current system in the US and under any proposed alternative, it is the insurance companies who are supposed to “limit or drive down prices”, since they are the ones “with the checkbook”. Exactly, which is why the current system is experiencing runaway costs and why no proposed alternative will do anything to rein in those costs.

So in your analysis capitalism isn’t working here? After all, insurance companies have an incentive to drive down medical costs, so if they’re not trying to do that, what’s wrong?

Exactly, which is why the current system is experiencing runaway costs and why no proposed alternative will do anything to rein in those costs.

Reading the summary is cheating, and the summary will inevitably leave the details out. Read the bill!

I assume that either you’re spoofing or you are unfamiliar with what any piece of legislation amending the USC looks like. For one to read the bill itself with comprehension would essentially require that one memorize all aspects of the USC amended by the legislation as well as have an intimate familiarity with the judicial history of these sections.

I’m not sure where you got that idea. Both under the current system in the US and under any proposed alternative, it is the insurance companies who are supposed to “limit or drive down prices”, since they are the ones “with the checkbook”.

As I said- that is the current system. That doesn’t make it rational. And there have been lots of proposals to go in that direction- health savings account being a great one. Current congressional bills make savings accounts and catastrophic plans subject to a fine. Instead of giving them the tax advantages the current system enjoy, we are killing them. In other words, people are frustrated that the insurance companies are responsible for controlling costs so now we are going to make the government responsible (with their amazing track record at controlling costs). There IS another way, the fact that it has been ignored (along with any other ‘non-existent’ republican solutions) doesn’t mean its not a possibility, or at least a piece of the puzzle.

Mark Buehner: That has become the point. The point of insurance traditionally is to provide for a rainy day emergency. Since we treat insurance as our first line of defense instead of last, there is no incentive for the consumer to limit or drive down prices (to the contrary, you’ve ‘paid’ for your insurance so the consumer is more likely to use it as much as possible). Finding ways to give the consumer skin in the game of which provider to use, when, where, and why is the most important way to reduce healthcare costs. What is being considered now does the opposite- it disallows the kind of catastrophic coverage plan that create these kinds of downward price pressures by putting consumers in the market with the checkbook.

I’m not sure where you got that idea. Both under the current system in the US and under any proposed alternative, it is the insurance companies who are supposed to “limit or drive down prices”, since they are the ones “with the checkbook”.

Isn’t the point of insurance that you don’t have to worry about the prices of individual medical procedures?

That has become the point. The point of insurance traditionally is to provide for a rainy day emergency. Since we treat insurance as our first line of defense instead of last, there is no incentive for the consumer to limit or drive down prices (to the contrary, you’ve ‘paid’ for your insurance so the consumer is more likely to use it as much as possible). Finding ways to give the consumer skin in the game of which provider to use, when, where, and why is the most important way to reduce healthcare costs. What is being considered now does the opposite- it disallows the kind of catastrophic coverage plan that create these kinds of downward price pressures by putting consumers in the market with the checkbook.

dana: This is an emotional issue for many Americans. This so-called “public option” in Government run health care presents serious challenges for us. As Consumers we should be able to compare the cost and quality of health care services. How much is a specific surgery at one hospital, as compared with another? http://www.friendsoftheuschamber.com/media/

Don’t even get me started on that one. I’m sure any half-decent accountant could come up with a half dozen answers if properly motivated. It just depends on your assumptions, on what you include where and how.

Besides, why does the price of a surgery matter to a consumer? Isn’t the point of insurance that you don’t have to worry about the prices of individual medical procedures?

Without the plot, charater development, or story.

But much more frightening!

Perhaps it should be renamed “The Lawyer’s Job Security Act of 2009″.

The excise tax doesn’t apply to people who buy insurance in the individual market. See Section 4980I(d) of the bill.

So basically, anyone over 55 and in relatively poor health who buys his own insurance, and is not yet ready to retire, will be screwed.

Your early retirement will help reduce the reported unemployment rate by removing you from the workforce.

HR 3200 is already summarized.

Reading the summary is cheating, and the summary will inevitably leave the details out. Read the bill!

Mark Field: In the spirit of the post, nobody gets to comment on the substance of the bill until they affirm that they’ve read it.

And every section of every statute that it amends, plus whatever definitions and overview of said statute are necessary to understand the operational effect of that amendment.