U.S. Healthcare Costs Exposed

[Vampyr]

This interests me. Does the government provide a rebate/tax reduction for people who obtain private insurance?

 

I can't imagine their doing that, but I don't know. I do know that some large companies provide it for their current and retired employees.

 

Is there a noticeable difference in service quality between public and private coverage?

 

I don't know this either; private insurance companies generally claim that you don't have to wait for elective surgery. In any case, the majority of private medical care is, I believe, performed by NHS doctors as a sideline, with leased NHS hospital rooms.

 

There are, of course, doctors in Harley Street and the like, who practise only privately. They are OK I am sure. And of course they are cheaper than their counterparts in the US because they have to compete.

 

EDIT: corrected gibberish when I was in a hurry and switched between two thoughts.

[barmar]

It's not clear that the reduction in the rate of increase of healthcare costs is totally, or even mainly, because of the ACA. The report I heard said that it could also be due to the recession: people are spending less on health care because they can't afford it.

[ArtK78]

It's not clear that the reduction in the rate of increase of healthcare costs is totally, or even mainly, because of the ACA. The report I heard said that it could also be due to the recession: people are spending less on health care because they can't afford it.

 

They can say what they want, but health care costs didn't go down in any prior recessions over the last 40 years.

[barmar]

They can say what they want, but health care costs didn't go down in any prior recessions over the last 40 years.

It's almost certainly a combination of the two, and more detailed analysis will be needed to unravel how much impact each had. Also, this has been the most severe downturn since the Great Depression, hasn't it? So its impact on health care spending is presumably greater.

 

Some industries are often referred to as "recession-proof" -- they're not discretionary spending. But nothing is really recession-proof. If you break your leg, you need to go to the hospital, but if you have a cold you can choose whether to the doctor or not, and you can certainly skip annual physicals.

 

Although it's probably the case that most of the big costs in health care are for procedures that are not discretionary. If you have a stay in the hospital that ends up costing tens or hundreds of thousands of dollars, it's probably not for something you could have chosen to live with.

[Winstonm]

From New York Times

 

Major new studies from researchers at Harvard University, the Henry J. Kaiser Family Foundation and elsewhere have concurred that at least some of the slowdown is unrelated to the recession, and might persist as the economy recovers

 

The Levin/Paul Ryan narrative appears to have been fiction.

[kenberg]

.Apparently it's tough to get a handle on it. From the Times article:

 

 

That led economists to surmise that other factors were at play. In new research, the Kaiser Family Foundation estimated that the recession accounted for about three-quarters of the lower spending trajectory, with the rest attributed to other factors not directly related to the economy. Professor Cutler of Harvard calculates that the recession accounted for about 37 percent.

[/Quote]

 

75% and 33% are two very different numbers.

 

 

The following paragraph:

 

 

Among other factors, the studies found that rising out-of-pocket payments had played a major role in the decline. The proportion of workers with employer-sponsored health insurance enrolled in a plan that required a deductible climbed to about three-quarters in 2012 from about half in 2006, the Kaiser Family Foundation has found. Moreover, those deductibles — the amount a person needs to pay before insurance steps in to cover claims — have risen sharply. That exposes workers to a larger share of their own health costs, and generally forces them to spend less.

[/Quote]

 

This shouts questions, at least to me. These workers are spending less on their health. Good if the deleted spending would have been for whimsey, bad if the deleted spending was for important care. Bad for the patient of course, but also quite possibly bad for the bottom line over a span of time. I hope they have some idea of which sort of spending is being deferred or cancelled.

 

A later paragraph:

 

 

In a new study in Health Affairs, Michael E. Chernew of the Harvard Medical School and his co-authors estimate that rising out-of-pocket payments, like deductibles and copays, account for about 20 percent of the decline in health spending.

[/Quote]

 

 

If we take the Kaiseer estimate that the slowdown accounts for 75% and the Chernew estimate that rising co-pays account for about 20%, we are close to 100%. Close enough for government work, as the expression goes.

 

I often find news stories amusing. Here we have the Kaiser group estimating 75% and Professor Cutler saying 37%. Might the reporter have asked each of these sources how they explain the huge discrepancy in results? Do they each feel that the other estimate was based on shoddy work? Quite often, it turns out that people with radically different numerical results are using words in substantially different ways. "the recession accounted for" is not exactly free from ambiguity, intended or not.

 

I have mentioned before that I was listening to some radio discussion (on NPR, not Fox) where two guests were presumably referring to the same data, one describing it as having a 3% effect, the other as a 50% effect, and the host just calmly let them blabber on, never once raising the issue that seemed obvious to me: "Precisely what do you mean by 3% effect and 50% effect?". Either one of them was lying, or they were using words very differently (not alwasy quite the same as lying).

[barmar]

75% and 33% are two very different numbers.

As Barbie once said: "Math is hard"

 

Or as Nate Silver has said more recently, economics is complicated.

[Winstonm]

.Apparently it's tough to get a handle on it. From the Times article:

 

 

 

 

75% and 33% are two very different numbers.

 

 

The following paragraph:

 

 

 

 

This shouts questions, at least to me. These workers are spending less on their health. Good if the deleted spending would have been for whimsey, bad if the deleted spending was for important care. Bad for the patient of course, but also quite possibly bad for the bottom line over a span of time. I hope they have some idea of which sort of spending is being deferred or cancelled.

 

A later paragraph:

 

 

 

 

 

If we take the Kaiseer estimate that the slowdown accounts for 75% and the Chernew estimate that rising co-pays account for about 20%, we are close to 100%. Close enough for government work, as the expression goes.

 

I often find news stories amusing. Here we have the Kaiser group estimating 75% and Professor Cutler saying 37%. Might the reporter have asked each of these sources how they explain the huge discrepancy in results? Do they each feel that the other estimate was based on shoddy work? Quite often, it turns out that people with radically different numerical results are using words in substantially different ways. "the recession accounted for" is not exactly free from ambiguity, intended or not.

 

I have mentioned before that I was listening to some radio discussion (on NPR, not Fox) where two guests were presumably referring to the same data, one describing it as having a 3% effect, the other as a 50% effect, and the host just calmly let them blabber on, never once raising the issue that seemed obvious to me: "Precisely what do you mean by 3% effect and 50% effect?". Either one of them was lying, or they were using words very differently (not alwasy quite the same as lying).

 

The Rand/Levin position:

"The trillion-dollar deficits were shocking, dangerous; Obamacare didn’t do anything to limit the continuous rise of health-care costs. "

 

Both positions have been shown to be wrong. Debt-to-GDP is more important than actual debt, and the ACA is helping to lower health costs.

 

Of course, hardliners will hold onto the explanation that "it was the recession" in order to retain narrative anti-Obama belief systems. I understand that the recession was partly the cause - but only partly. The ACA helps.

[kenberg]

You are including the material I quoted from the NYT link you supplied but I am not following how it connects with what you say in response, if it is intended as a response.

[Winstonm]

You are including the material I quoted from the NYT link you supplied but I am not following how it connects with what you say in response, if it is intended as a response.

 

Sorry, Ken, maybe I misunderstood. I took your dissection of the NYT article as a response so I wanted to point out the position I took was simply that the Ryan/Levin narrative has been shown to be wrong. Nothing more.

[kenberg]

Sorry, Ken, maybe I misunderstood. I took your dissection of the NYT article as a response so I wanted to point out the position I took was simply that the Ryan/Levin narrative has been shown to be wrong. Nothing more.

 

I was taking the article as a whole. What I got out of it was that the situation is unclear. If one guy says 75% and another says 37%, at least one of them is off by a bit. This is not necessarily either incompetence or misdirection, but I thought that the writer might have pointed out the wide discrepancy (I don't think that would be editorializing) and even asked some qualified person how this could happen.

 

As far as Ryan/Levin is concerned, they weren't mentioned were they? At least not prominently so that I saw it.

 

Anyway, to the extent that I got something out of the article it was not that Ryan was right about something or wrong about something but rather that the change in the pace of increase in healthcare cost is not well understood. There are competing claims and competing studies. I wish them well in this important topic but I did not see it at all as a conclusive study showing that this person or that person has been right or wrong. When economists disagree about what is behind an event I have no problem at all with an article presenting different ideas from different sources. That's the way I saw this article.

[Winstonm]

I was taking the article as a whole. What I got out of it was that the situation is unclear. If one guy says 75% and another says 37%, at least one of them is off by a bit. This is not necessarily either incompetence or misdirection, but I thought that the writer might have pointed out the wide discrepancy (I don't think that would be editorializing) and even asked some qualified person how this could happen.

 

As far as Ryan/Levin is concerned, they weren't mentioned were they? At least not prominently so that I saw it.

 

Anyway, to the extent that I got something out of the article it was not that Ryan was right about something or wrong about something but rather that the change in the pace of increase in healthcare cost is not well understood. There are competing claims and competing studies. I wish them well in this important topic but I did not see it at all as a conclusive study showing that this person or that person has been right or wrong. When economists disagree about what is behind an event I have no problem at all with an article presenting different ideas from different sources. That's the way I saw this article.

 

The Ryan/Levin narrative is important because it can be traced directly to the gridlock that has ground Congress to a virtual halt, so quickly showing those beliefs to be wrongheaded is critical to moving past the stalemate into genuine compromise, instead of 49 ridiculous failed attempts to repeal the ACA.

[barmar]

The Ryan/Levin narrative is important because it can be traced directly to the gridlock that has ground Congress to a virtual halt, so quickly showing those beliefs to be wrongheaded is critical to moving past the stalemate into genuine compromise, instead of 49 ridiculous failed attempts to repeal the ACA.

Unfortunately, the gridlock is mostly based on partisan ideology, the facts are practically irrelevant.

 

The nice thing (for politicians) about economics is that it's so complicated that you can probably find a legitimate study that supports practically any policy.

[blackshoe]

It's not that economics is complicated, it's that economics is not well understood, even by economists.

[Winstonm]

Unfortunately, the gridlock is mostly based on partisan ideology, the facts are practically irrelevant.

 

The nice thing (for politicians) about economics is that it's so complicated that you can probably find a legitimate study that supports practically any policy.

 

Gridlock is based on a difference between reality-based conclusions contrasted with narrative-based conclusions, i.e., those who formulate their beliefs about reality based on interpreting data and those who think their beliefs equate to reality. The first type person has the ability to change his mind; the latter never sees a reason to alter his position.

[mike777]

new database shows the discrepancies in billing for the same procedure among the nation's hospitals. The Huffington Post has an article that shows the billing for the same procedures at two hospitals: one billed $99,690 while the other billed $7044. The difference between what is charged as standard (to those without health insurance) must be designed to maximize the write offs when the uninsured cannot pay. This practice has repercussions, though, that affect everyone

 

---

 

 

Economics tell us that completion is good. Offer the best product/service at the best price and you will sell more. But doctors try and sell us less and at a higher cost.

 

For some reason the customer, you and me, will not walk out the door saying this service is terrible, good bye. For some reason you and I don't walk out the door from the 99k hospital to the 7k hospital.

 

My guess is and it is only a guess there are govt regulations that mess up this process. In any event there must be some real reasons why customers don't go to the 7k hospital and go to the 99k hospital.

 

In your example an insurance company should put us on a private jet and private limo send us a check for 10K and still save money if they send us to the 7k hospital. Again I am guessing that there are some govt regulations here that account for these costs.

[barmar]

the latter never sees a reason to alter his position.

And as long as there are enough members of Congress like that, we'll continue to be stuck.

 

And it worries me that we're seeing attrition of the more rational members -- a number of them (e.g. Barney Frank) have recently retired or announced that they're not going to run in the next election, citing frustration with the current system.

[barmar]

In your example an insurance company should put us on a private jet and private limo send us a check for 10K and still save money if they send us to the 7k hospital. Again I am guessing that there are some govt regulations here that account for these costs.

If you're having a heart attack (I think that was the procedure with the 7K-90K discrepancy) you might not survive if you have to fly 4 hours to get to the cheaper hospital. When an ambulance arrives, do they ever give the patient a choice of which hospital to go to?

[barmar]

It's not that economics is complicated, it's that economics is not well understood, even by economists.

And why is that? Because it's a complex system that is extremely unpredictable.

 

The basic problem is that economists delude themselves into thinking that it's comprehensible. Not only is it complicated by itself, but the act of analyzing it and publishing the results changes it. E.g. if you predict that the economy will go in a particular direction, or that a particular company is a good or bad investment, it changes the behavior of the public and investors. It's very difficult, maybe even impossible, to take this effect into account when making your predictions.

[blackshoe]

If you're having a heart attack (I think that was the procedure with the 7K-90K discrepancy) you might not survive if you have to fly 4 hours to get to the cheaper hospital. When an ambulance arrives, do they ever give the patient a choice of which hospital to go to?

Around here they do.

 

If I don't have an appointment with my (VA) primary care physician, I can't get to see him. I can make an "emergency" appointment, at least sometimes, but it may be a day or two before I get in. If it's a "true emergency" or after VA clinic hours (8 AM - 4:30 PM, M-F), I'm told to go to the nearest emergency room.

 

Strong Memorial Hospital here is widely cited as one of the best hospitals in the area, if not the country, for many things. IMO, their emergency department sucks. Not because the staff are bad, but because everybody and his cousin goes there at the drop of a hat. It's always overcrowded. I don't go there unless I have to.

[kenberg]

Strong Memorial Hospital here is widely cited as one of the best hospitals in the area, if not the country, for many things.

 

From what I have seen recently, every hospital in the country is in the top ten in the country. They have a plaque on the wall saying so.

[Winstonm]

Around here they do.

 

If I don't have an appointment with my (VA) primary care physician, I can't get to see him. I can make an "emergency" appointment, at least sometimes, but it may be a day or two before I get in. If it's a "true emergency" or after VA clinic hours (8 AM - 4:30 PM, M-F), I'm told to go to the nearest emergency room.

 

Strong Memorial Hospital here is widely cited as one of the best hospitals in the area, if not the country, for many things. IMO, their emergency department sucks. Not because the staff are bad, but because everybody and his cousin goes there at the drop of a hat. It's always overcrowded. I don't go there unless I have to.

The most likely reason the ER is overcrowded is that it has to service the uninsured so that is where the uninsured go with all problems, emergency or not. ERs are full of kids with sore throats and babies with RSV - and the charges for those services are written off and that loss is passed on to the insured as higher costs for insurance coverage.

 

If everyone were guaranteed coverage, ERs would be left to deal with genuine emergencies, while sick kids and babies could go to the clinics and doctor's offices.

[blackshoe]

If everyone were guaranteed coverage, ERs would be left to deal with genuine emergencies, while sick kids and babies could go to the clinics and doctor's offices.

This statement, while probably true, contains the implicit assumption that "coverage" is the only way to deal with the problem. I don't know if that's true, and I submit that neither does anyone else. At the least no one, afaik, is looking at any other possibilities.

[dwar0123]

This statement, while probably true, contains the implicit assumption that "coverage" is the only way to deal with the problem. I don't know if that's true, and I submit that neither does anyone else. At the least no one, afaik, is looking at any other possibilities.

What other possibilities? Like refusing emergency medical care to the uninsured? How many insured people have to die while they establish whether or not the patient is insured before you think that requirement goes bye bye. Oh and once you accept the patient, you're liable for them.

[kenberg]

I'm somewhat new at the emergency room business, but I have learned that if a doctor calls the hospital and says that he has told a patient to go to the emergency room, you get served a lot faster. This makes sense for a couple of reasons: The people at the desk know that there is at least one person with medical credentials who thinks this is actually worthy of the name emergency, and it's just in their nature to accommodate doctors. It worked as follows: I called the doctor's office, they got the on-call doc, I described the symptoms, he said get yourself into the emergency room, and he called ahead. It makes a difference.