Supreme court debate Affodable Care Act

[EMTP]

Fundamentalist libertarianism is no more relevant to the ACA than the belief that the world will end with the Mayan calender in 2012 (while equally irrelevant, the latter belief is of course far more logical and supported by more empirical evidence.) One could, of course, interject into every discussion of the future an argument to the effect that we should optimize the system for the next six months, and not worry about the long term, and let me tell you why.

Mayan conspiracy theorists are more sensible than that. They realize that every issue is not an invitation is climb onto their favorite hobby horse and declaim. Libertarianism is, of course, a deeply childish "philosophy," and the childishness of those who profess it can be seen clearly in their determination by volume and repetition to force every conversation back to a discussion of their faith.

[Steroid]

Fundamentalist libertarianism is no more relevant to the ACA than the belief that the world will end with the Mayan calender in 2012 (while equally irrelevant, the latter belief is of course far more logical and supported by more empirical evidence.) One could, of course, interject into every discussion of the future an argument to the effect that we should optimize the system for the next six months, and not worry about the long term, and let me tell you why.

Mayan conspiracy theorists are more sensible than that. They realize that every issue is not an invitation is climb onto their favorite hobby horse and declaim. Libertarianism is, of course, a deeply childish "philosophy," and the childishness of those who profess it can be seen clearly in their determination by volume and repetition to force every conversation back to a discussion of their faith.

That's the third time you've gone for a cheap insult to libertarianism instead of actually making an argument against it or its relevance to the debate (If someone is against ACA because they are a socialist and want government-owned health care, is that irrelevant?). So I have to ask: are you trolling, or are you so afraid of me for being a libertarian that the only way to deal with your neurosis is to lash out?

[jakovasaur]

That's the third time you've gone for a cheap insult to libertarianism instead of actually making an argument against it or its relevance to the debate (If someone is against ACA because they are a socialist and want government-owned health care, is that irrelevant?). So I have to ask: are you trolling, or are you so afraid of me for being a libertarian that the only way to deal with your neurosis is to lash out?

Some people here get insane about libertarianism. I remember a while back, a regular poster advocated for "cutting libertarians' throats in their beds". Not much hope for a worthwhile discussion.

[Ghostbear]

Where this analogy breaks down is that Water is a vital natural resource and healthcare is not. Healthcare is provided by individuals that spend 10-16 years in training and hundreds of thousands of dollars on education. I'm not trying to argue against affordable care here, just pointing out why the comparison falters.

Well that depends on what you call "vital". If you limit vital to things that you will die without in short order, regardless of all other circumstances, then sure. If you call vital something along the lines of being the basic neccesities required to have a chance to function in society, then no. Many (probably most, actually) public goods are of the latter kind of vital: roads, electricity, heating, postal service, telephone access, education etc. They're all resources that are fairly easy for a handful of players to lock down: only so many routes are truly viable roads, providing your own electricity is still difficult, even with solar panels and wind turbines, the physical infrastructure of communications favors and trends towards monopolies, and so on. Those are all services that are vital to being a full member of society, to having the freedom to advance yourself and make something of your life. Health care exists in a similar situation.

Again, I don't quite agree with your definition of freedom, but using it, then while it results in a net increased freedom for the system, it doesn't increase freedom for all. Joe loses the freedom to easily make a lot of money, and the insurance companies lose the freedom to sell the policies they think are most profitable.

The problem with your definition of freedom is that it is cares only about superficial freedom. It's technical freedom, instead of practical freedom. Being free to charge people $10,000 / bottle of water isn't worth anything compared to the freedom to not have others control your life through their economic advantages. We've already seen what the end result of your kind of freedom is, and it isn't pretty; it ends in the people with the most money trampling all over the rights of everyone sufficiently poorer than them, allowing them to make more money and widen that gap. Those poorer than them end up just a few steps higher on the ladder than slaves, since they're kept in a constant position of only working enough to survive (hence the term, wage slavery). It's a freedom that only makes sense if you care solely about ideals and not at all about reality.

[lutzj]

I'm still not quite understanding why Joe is such a bad guy. If I might present a similar thought experiment:

Joe lives in the desert and makes a living pumping water out of the ground. It costs him $9,999 in electricity, replacement pump parts, etc. to extract and bottle twenty ounces of water. He charges an extra dollar on top of these fixed costs to justify the effort, creating a total cost of $10,000 to anybody who shows up at his door needing water. There are other potential sites for wells in the desert, but Joe is the only person with the equipment and expertise to actually pump any.

In an alternative scenario, Joe pumps his water relatively cheaply, and, aside from using water from his own needs, grows rare desert truffles. Joe is able to produce 2 bottles of water each day. He uses one bottle to sustain himself and the other to grow $10,000 worth of truffles. He is willing to instead give this water away to other people but needs reimbursement for the lost truffle income or he can't pay his mortgage.

In either of these situations, Malice moves in to the dune next to Joe's and needs water. Joe charges him $10k/bottle. What is Joe doing wrong in this situation?

[Yakk]

If someone comes into the ACA thread and starts going on about how the ACA is wrong, because capitalism is fundamentally flawed and we should throw it out and replace it with a communist utopia run by computers and technocrats, they are off topic.

If someone comes into the ACA thread and starts going on about how the ACA is wrong, because non-libertarian society is fundamentally flawed and we should throw it out and replace it with a libertarian utopia ruled (in a free manner) by Randian ubermench, they are equally off topic.

If someone comes into the ACA thread and starts going on about how this theorem they wrote that proves P=NP means that our society is fundamentally flawed, and we don't need health care because we can solve for what ails us and use homeopathic technology together with polynomial time diagnosis to cure all our ails, they are equally off topic.

I understand. You think your ideals are worth discussing. They may be, but this isn't the thread to discuss fundamental changes in the organization of the world. Your ideas just aren't important enough to be worth discussing when they are only tangentially related to the subject at hand.

[jakovasaur]

That doesn't sound off-topic to me. That sounds like beginning an argument with a solid philosophical foundation. This is a thread about a court case, so political philosophy is obviously relevant.

[elasto]

In an alternative scenario, Joe pumps his water relatively cheaply, and, aside from using water from his own needs, grows rare desert truffles. Joe is able to produce 2 bottles of water each day. He uses one bottle to sustain himself and the other to grow $10,000 worth of truffles. He is willing to instead give this water away to other people but needs reimbursement for the lost truffle income or he can't pay his mortgage.

In either of these situations, Malice moves in to the dune next to Joe's and needs water. Joe charges him $10k/bottle. What is Joe doing wrong in this situation?

Joe is doing nothing wrong at all - assuming he collects the sales taxes due on the truffles he sells, and pays the income taxes due on his profits.

Society can then use the tax income in order to fund the infrastructure necessary to provide cheap water as a public good to everyone - Joe and Malice included.

[Ghostbear]

In either of these situations, Malice moves in to the dune next to Joe's and needs water. Joe charges him $10k/bottle. What is Joe doing wrong in this situation?

Well, for one, you're limiting yourself to two rather improbable versions of events. Why is it more likely that Joe can only produce 2 bottles of water a day than that he can produce dozens or possibly even hundreds of bottles of water a day? For another, I don't think the problem (or the main problem -- I'd still think it'd need some addressing) is the people who willingly and knowingly move into that situation: it's the people who are born there or brought there by others, the people who don't have any choice in the matter. It's the people who are tricked or deceived into moving there, left unable to determine the water situation that they would deal with in advance. It's the risk of that situation being possible everywhere (including other, non-water, vital resources), and not just this one desert town.

Any system that can create an event where the best response you can give someone is "Well, you should have thought of that before you were born there" is fundamentally flawed.

[Yakk]

Yes it is about a court case. No, fundamentalist libertarian political philosophy does not have anything to do with how the court case will be resolved. So fundamentalist libertarian philosophy is off topic in a discussion on how the court case will be resolved. It might have a bearing on why you want it to be resolved one way or the other, but so does details of Catholic Theology, the schizophrenic meanderings of someone who thinks the CIA has bugs in their teeth, Marxist political theory, value investing strategies, peak oil, and what Joe does with his truffles.

[Hawknc]

Pretty much what Yakk said. If, when you preview your post like I'm sure you all do, you notice that it could actually be inserted into any generic ideology argument and still completely apply, it is probably off-topic. Please keep it related to the original discussion.

[lutzj]

In either of these situations, Malice moves in to the dune next to Joe's and needs water. Joe charges him $10k/bottle. What is Joe doing wrong in this situation?

Well, for one, you're limiting yourself to two rather improbable versions of events. Why is it more likely that Joe can only produce 2 bottles of water a day than that he can produce dozens or possibly even hundreds of bottles of water a day?

Hypothetical scenarios don't need to be probable in order to be usefully analogous to real-world situations. Do note that the original premise is founded on the notion of one person controlling all water in an area without simply owning the entire area outright, which isn't possible in the vast majority of real-world environments. The point is that water, like healthcare, can be expensive for reasons other than "the guys selling it are all dicks."

For another, I don't think the problem (or the main problem -- I'd still think it'd need some addressing) is the people who willingly and knowingly move into that situation: it's the people who are born there or brought there by others, the people who don't have any choice in the matter. It's the people who are tricked or deceived into moving there, left unable to determine the water situation that they would deal with in advance. It's the risk of that situation being possible everywhere (including other, non-water, vital resources), and not just this one desert town.

This is obviously a worrying situation, but it still doesn't mean Joe is doing anything wrong. Tricking somebody into moving into a place where they won't be able to buy or find water, on the other hand, is obviously wrong; even tehsuperhardcorezlibertarians want the government to punish fraud. Your concern about people gaining total monopolies over precious resources is also a valid one, but water is abundant enough that no such monopoly can exist in the real world, and healthcare isn't even a scarce resource that can be controlled like rare earths or the Crystal Skull. If the price of healthcare rises much higher than its real value, somebody else will start making and selling it.

Any system that can create an event where the best response you can give someone is "Well, you should have thought of that before you were born there" is fundamentally flawed.

Sucks, because that is going to be true of all systems, at least until post-scarcity or the Rapture. Some people are going to be born on islands just before they are obliterated by typhoons. Some people are going to be born with incurable genetic diseases. Others will be born during wars or famines where there simply isn't enough food to feed everyone adequately.

Listen up children, this is a perfect example of a situation where somebody did not heed the advice I gave immediately above this post. On topic plz. -hawk

[Steroid]

We need a general Libertarianism thread in SB so I can explain things. Suffice it to say that because I'm firmly on the "Joe" side of what's been discussed, I'm hoping that they overturn ACA, go on to overturn Wickard, and leave the health care industry unregulated.

[Garm]

We need a general Libertarianism thread in SB so I can explain things. Suffice it to say that because I'm firmly on the "Joe" side of what's been discussed, I'm hoping that they overturn ACA, go on to overturn Wickard, and leave the health care industry unregulated.

So glad you're rooting for further economic instability. The idea that Health Care isn't national commerce is a joke. Currently 1 out of every 8 people in the U.S. is employed by the healthcare sector. It currently accounts for ~17% of our GDP and that's only going to get worse. As health care costs continue to rise things are only going to get worse. We need health care reform in some form or another or we're going to be paying a very literal price. The Roberts' court striking this down as a political calculation isn't going to do great things for the Conservative Movement.

[Arrian]

The poll found that 44 percent of respondents favor the law, and that an additional 21 percent oppose it because it doesn't go far enough - for a total of 65 percent.

The rest, 35 percent, said they oppose the law and major changes to healthcare generally.

Pew Research (3/7-11, n=1,503): What, if anything, do you think Congress should do with the health care law? Expand it. Leave it as is. Repeal it.
38% repeal
20% leave as is
33% expand
9% unsure

It's likely of course that a good portion of the disapprove because it doesn't go far enough crowd wants a public option or single-payer, which to some extent isn't going farther so much as it's a completely different approach. But it's also likely a good portion of that crowd prefer the law to the pre-ACA status quo. Either way, the implication that only a tiny fraction of Americans who oppose the law do so because it doesn't go far enough is inaccurate.

An interesting interaction between popular opinions of the ACA and the Supreme Court immediately following oral arguments:

Forty-one percent (41%) of Likely U.S. Voters now rate the Supreme Court’s performance as good or excellent, according to a new Rasmussen Reports national telephone survey. That’s up 13 points from 28% in mid-March and is the court’s highest ratings in two-and-a-half years.
...
The partisan turnaround in views of the court is noticeable. Three weeks ago, 29% of Republicans gave the Supreme Court positive marks for its job performance; now that number has climbed to 54%. Similarly, among voters not affiliated with either of the major political parties, good or excellent ratings for the court have increased from 26% in mid-March to 42% now. Democrats’ views of the court are largely unchanged.

[emphasis mine]

So, after aggressive questioning of the government's reading of the constitutionality of the ACA, and after the President and several major liberal commentators have opined that if the court strikes down the ACA they're so far beyond the pale that they should be impeached, Democrats' opinions of the court are unchanged while independents' have improved by over 50%? That seems interesting, I'd expect to see some drop in Democrats'/liberals' opinions of the Court after all the brouhaha, especially if they think the ACA is at least a step in the right direction and feel the court is likely to consider striking it down on ideological rather than constitutional grounds.

[Silknor]

So glad you're rooting for further economic instability. The idea that Health Care isn't national commerce is a joke. Currently 1 out of every 8 people in the U.S. is employed by the healthcare sector. It currently accounts for ~17% of our GDP and that's only going to get worse. As health care costs continue to rise things are only going to get worse. We need health care reform in some form or another or we're going to be paying a very literal price. The Roberts' court striking this down as a political calculation isn't going to do great things for the Conservative Movement.

Obviously health care is interstate commerce. But while I believe that the individual mandate is constitutional, I would not say it's obvious that that it's a necessary and proper exercise of the Commerce power. And while it seems clear that Congress could enact such a mandate under the taxing power, it's not obvious that they choose to use this power, rather it seems that they intentionally avoided it while drafting the statute, so question of if we should read the actual language as a tax or not isn't entirely obvious either.

Nor does it seem accurate to say that the Justices who end up voting against it are making a "political calculation" as opposed to interpreting the Constitution in good faith.

Yes, the whole argument about how this is a major infringement on liberty is overblown since it could clearly be done under the taxing power and since the states can do it without question. But as it is actually written, even though I believe there are strong arguments for its constitutionality, you don't have to be a political hack to say that this probably isn't what the Framers had in mind when they drafted the Commerce Clause. Pretending that anyone who believes it's not constitutional as written is a political hack does no favors either to the truth or the civility of political discourse.

[eran_rathan]

Hypothetical scenarios don't need to be probable in order to be usefully analogous to real-world situations. Do note that the original premise is founded on the notion of one person controlling all water in an area without simply owning the entire area outright, which isn't possible in the vast majority of real-world environments. The point is that water, like healthcare, can be expensive for reasons other than "the guys selling it are all dicks."

...

Your concern about people gaining total monopolies over precious resources is also a valid one, but water is abundant enough that no such monopoly can exist in the real world, and healthcare isn't even a scarce resource that can be controlled like rare earths or the Crystal Skull. If the price of healthcare rises much higher than its real value, somebody else will start making and selling it.

Actually, there are quite a few areas that are like that - most of the Western US, for instance. See also: Hydraulic Empire. And as far as it goes, the oligarchy of the insurance companies are what drives the prices up in health care, not the actual cost of services.

[Bubbles McCoy]

Actually, there are quite a few areas that are like that - most of the Western US, for instance. See also: Hydraulic Empire. And as far as it goes, the oligarchy of the insurance companies are what drives the prices up in health care, not the actual cost of services.

How do you figure? I can see how oligarchic elements to medical service providers can drive up costs, but relatively low margin insurance companies have little incentive to drive up care prices, even if they were directly colluding.

[CorruptUser]

Actually, there are quite a few areas that are like that - most of the Western US, for instance. See also: Hydraulic Empire. And as far as it goes, the oligarchy of the insurance companies are what drives the prices up in health care, not the actual cost of services.

In order to actually drive up the cost of health care they would have to prevent competition from coming in and providing cheaper health care. Like, through massively complex legislation from their corporate shills.

[/strawman]

Remove tinfoil hat
You place your tinfoil hat in your inventory
Go north
You can not go north


Seriously though, the US 'imports' plenty of foreign doctors each year, the opposite of driving up the cost of medicine.

The costs are rising because people are living longer and sicker; people who would've died without modern medicine are alive but not necessarily healthy. A century ago, cancer or diabetes was a death sentence, one whose most significant (financial) cost was the funeral. Now, cancer can often be treated, but it is far from cheap to do so. The insurance companies now have to cover the costs of said treatment, so the price has to rise accordingly. Sickly children are much more likely to live through childhood, and their expected health care costs are far from nothing. Admittedly, I wouldn't have lived through childhood without modern medicine, but that's personal.

You want someone to blame for the rising cost of medicine? Blame your grandma for her hip replacement. Blame your neighbor for his bypass surgery. Blame your cousin for needing surgery on his collarbone. Blame the guy down the street who had a kidney transplant. Blame your middle-school teacher for her cancer operations. Blame that German couple in "Gifted Hands" that had those conjoined twins. But don't blame the insurance companies that allowed all of them to afford their treatments.

[Whammy]

Actually, there are quite a few areas that are like that - most of the Western US, for instance. See also: Hydraulic Empire. And as far as it goes, the oligarchy of the insurance companies are what drives the prices up in health care, not the actual cost of services.

In order to actually drive up the cost of health care they would have to prevent competition from coming in and providing cheaper health care. Like, through massively complex legislation from their corporate shills.

[/strawman]

Seriously though, the US 'imports' plenty of foreign doctors each year, the opposite of driving up the cost of medicine.

The costs are rising because people are living longer and sicker; people who would've died without modern medicine are alive but not necessarily healthy. A century ago, cancer or diabetes was a death sentence, one whose most significant (financial) cost was the funeral. Now, cancer can often be treated, but it is far from cheap to do so. The insurance companies now have to cover the costs of said treatment, so the price has to rise accordingly. Sickly children are much more likely to live through childhood, and their expected health care costs are far from nothing. Admittedly, I wouldn't have lived through childhood without modern medicine, but that's personal.

You want someone to blame for the rising cost of medicine? Blame your grandma for her hip replacement. Blame your neighbor for his bypass surgery. Blame your cousin for needing surgery on his collarbone. Blame the guy down the street who had a kidney transplant. Blame your middle-school teacher for her cancer operations. Blame that German couple in "Gifted Hands" that had those conjoined twins. But don't blame the insurance companies that allowed all of them to afford their treatments.

Actually....no. Much of the concentration in the market for healthcare, which was pretty much an oligarchy long before the Affordable Care Act was even on the table, can be attributed to a lot of different things:

-The rise of the Blue Cross plans (which are pretty much the dominant force in insurance today), which from their very beginning took steps to minimize competition, spurred on in part by conditions in the Great Depression/WWII era which did help in limiting competition in general across the economy.

-Being tied to your employer. In my own opinion, this is probably the biggest issue since attaching your healthcare to your job limits your flexibility in being able to purchase health insurance and leaving them if needed, and businesses, once they have an insurance plan, would also be hesitant to change for various reasons.

-Experience rating creating an incentive for insurance to simply shift risks around and bring in more healthy people instead of trying to be more competitive and manage costs within a given set of people.

-Rise of managed care programs like HMOs encouraging mergers upon mergers to meet up with rising costs, which led to hospitals and physicans to group together to get more bargaining power, which encouraged insurance companies to group together and circle continues.

-Asymmetircal information in the industry and all the issues that go with that, such as adverse selection concerns forcing insurers to have to charge high for everyone due to not knowing for sure who is going to be healthy and who isn't, moral hazards encouraging people to spend more money than they might have without insurance (my econ teacher tends to harp on this a lot, maybe a bit too much =P), etc.

-Economies of scale, which is a given in insurance since the point is to have a large group of healthy individuals pooling money together as a buffer against the risk of bad health, and using that money to occasionally pay out for the sicker individuals. Although surprisingly, that report does suggest it's not that big of a deal in the health insurance market *shrug*

Point is, the state of our healthcare/health insurance market is due to a large variety of issues; simply blaming insurance or simply blaming sick people misses a lot of the nuances of the issue. I think it is very clear, however, that the structure of the market itself is a serious issue, especially if you're of the free-market persuasion (oligarchic market structure that has barriers of entry built right into the system? That's the devil!).

Some other readings:
-Government Accountability Office Report on the state of the market in 2008
-AMA Study on the Market (well, an announcement about the results of the study cause you need to pay for the real thing =P)
-Consolidation And The Transformation Of Competition In Health Insurance just an older study on the issue.

[Silknor]

@Corruptuser:

Seriously though, the US 'imports' plenty of foreign doctors each year, the opposite of driving up the cost of medicine.

Do you have any evidence to support this? A Washington Post article says that we'll be short 30000 primary care doctors by 2015.

The greatest threat to the health-care overhaul might not be the Supreme Court, which is scheduled to hear challenges to the law next month. Or the shifting alliances of an election year. In the end, it’s more likely to be a lack of medical providers. If the law succeeds in extending health insurance to 32 million more Americans, there won’t be enough doctors to see them. In fact, the anticipated shortfall of primary-care providers, by 2015, is staggering: 29,800.

The Obama administration’s options to address that threat are limited. It does have Medicare, which covers the lion’s share of the cost of training medical residents: In 2009, it spent $9.5 billion on residents’ stipends, teaching physicians’ salaries and related expenses. But when Congress passed the balanced budget amendment in 1996, it capped the number of residencies that Medicare can fund. Since then, hospitals’ slots have been tethered to 1996 levels.

The health overhaul, some hoped, would address that issue. But with the health insurance expansion’s $971 billion price tag — and the Obama administration goal to keep the law’s cost under $1 trillion — funds for more slots didn’t turn up.

As for health care costs, it's true that people living longer tends to push up the aggregate cost of health care they'll use. But I'm skeptical that explains why treatments and procedures are more expensive here than in other countries.

Selected excerpts from "Why an MRI costs $1,080 in America and $280 in France "

Spoiler:

There is a simple reason health care in the United States costs more than it does anywhere else: The prices are higher.

That may sound obvious. But it is, in fact, key to understanding one of the most pressing problems facing our economy. In 2009, Americans spent $7,960 per person on health care. Our neighbors in Canada spent $4,808. The Germans spent $4,218. The French, $3,978. If we had the per-person costs of any of those countries, America’s deficits would vanish. Workers would have much more money in their pockets. Our economy would grow more quickly, as our exports would be more competitive.

There are many possible explanations for why Americans pay so much more. It could be that we’re sicker. Or that we go to the doctor more frequently. But health researchers have largely discarded these theories. As Gerard Anderson, Uwe Reinhardt, Peter Hussey and Varduhi Petrosyan put it in the title of their influential 2003 study on international health-care costs, “it’s the prices, stupid.”

As it’s difficult to get good data on prices, that paper blamed prices largely by eliminating the other possible culprits. They authors considered, for instance, the idea that Americans were simply using more health-care services, but on close inspection, found that Americans don’t see the doctor more often or stay longer in the hospital than residents of other countries. Quite the opposite, actually. We spend less time in the hospital than Germans and see the doctor less often than the Canadians.

“The United States spends more on health care than any of the other OECD countries spend, without providing more services than the other countries do,” they concluded. “This suggests that the difference in spending is mostly attributable to higher prices of goods and services.”

“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.

In America, Medicare and Medicaid negotiate prices on behalf of their tens of millions of members and, not coincidentally, purchase care at a substantial markdown from the commercial average. But outside that, it’s a free-for-all. Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured.

The result is that, unlike in other countries, sellers of health-care services in America have considerable power to set prices, and so they set them quite high. Two of the five most profitable industries in the United States — the pharmaceuticals industry and the medical device industry — sell health care. With margins of almost 20 percent, they beat out even the financial sector for sheer profitability.

The players sitting across the table from them — the health insurers — are not so profitable. In 2009, their profit margins were a mere 2.2 percent. That’s a signal that the sellers have the upper hand over the buyers.

But as simple an explanation as “the prices are higher” is, it is a devilishly difficult problem to fix. Those prices, for one thing, mean profits for a large number of powerful — and popular — industries. For another, centralized bargaining cuts across the grain of America’s skepticism of government solutions. In the Medicare Prescription Drug Benefit, for instance, Congress expressly barred Medicare from negotiating the prices of drugs that it was paying for.

TL;DR version: The US pays a lot more for health care than other developed countries. And it's not because we use more health services, we don't, we just pay more for those we do get. One reason for part of this is that other developed countries aggressively set prices for health care, or at least work to push them down. By contrast, we have many smaller buyers of health care instead of one large entity, and so not surprisingly we end up pay more. Much more.

Corruptuser was half right though. We shouldn't blame the insurance companies for the high price of health care. Health insurers had a profit margin of 2.2 percent in 2009. The pharmaceutical industry and medical device industry had margins approaching 20 percent. That doesn't paint a picture of insurance companies ripping off consumers and laughing all the way to the bank (on aggregate at least). Rather it looks like policy choices (don't let Medicare/Medicaid bargain for lower prescription drug prices, don't do single payer, restrict the number of doctors*, provide long lasting patents on pharmaceuticals**, and many others***) have created a health care market that strongly favors the sellers over the buyers, and the predictable result is that the buyers (indirectly that's individuals, but in most cases directly that's insurance companies and the government) pay more than in other countries.

*For example, leaving the number of residencies Medicare funds at 1996 levels as cited above, making it harder for foreign doctors to practice here, making it harder for people to become doctors (on this last one there is no doubt, at the margin, a trade off between quantity and quality, though if, for example, we make future primary care doctors get a lot of training in things they'll never use, then that's probably not a meaningful loss of quality).

**Stronger patent protection can increase the incentives to do research for new drugs yes (though stronger/longer in the wrong ways can hurt it too, for example, very long copyright terms make it harder to create socially valuable derivative works). But it also means prices are higher.

***No doubt conservatives would say some of the bad policy choices we've made include things like fragmenting insurance markets by not allowing policies to be sold across state lines, subsidizing the purchase of insurance through the tax code by employers, thus promoting over-consumption of healthcare, taking consumer's skin out of the game, thus giving them less incentives to shop around for the best value, and medical malpractice laws that promote defensive medicine. I think they're right on all of these, even if they tend to overstate the degree to which these drive up prices, and even if none of these solutions would be as effective in reducing prices as single payer or a public option.

[Dark567]

*For example, leaving the number of residencies Medicare funds at 1996 levels as cited above, making it harder for foreign doctors to practice here, making it harder for people to become doctors (on this last one there is no doubt, at the margin, a trade off between quantity and quality, though if, for example, we make future primary care doctors get a lot of training in things they'll never use, then that's probably not a meaningful loss of quality).

The AMA constantly lobbies in favor of not accrediting new medical schools, causing a shortage of spaces for potential doctors(there are plenty of people who want to be doctors, that aren't accepted into medical school). Of course the AMA says its trying to maintain quality, but I have a sneaking suspicion that there is some self interest at play here.

And really if we just make it easier for foreign doctors to practice here, they probably would come in droves.

http://www.worldsalaries.org/generalphysician.shtml

[Lucrece]

Instead, they raise the required scores for foreign doctors so that people continue to go to medical schools in the state at their exorbitant prices. The AMA also conspicuously lobbied against Obama's healthcare bill.

[Garm]

Man, $1100 is reasonably cheap for an MRI. I got mine done in an outpatient center because it was about $1200 cheaper than going to the main hospital. And I still paid about $3500 (or would have if I didn't have insurance).

[CorruptUser]

I had bloodwork done a few weeks ago. I got a 40% discount because I wasn't insured (sort of; my insurance is basically disaster-only). Well, 25% discount for no insurance and another 20% for paying within 30 days.

I'm not sure if that 25% no-insurance discount is given because insurance companies will haggle a discount anyway or they expect people not paying through insurance to be unable to pay anyway. But I doubt anyone pays 'sticker price'. At 40% discount, your $3500 MRI would be more like $2100.

[Lucrece]

I recall reading some article stating that the reason why countries like Japan could fix prices was also because the companies themselves would just adjust the product/machinery. A machine would be reduced in capability but still be covering the vast majority of medical needs barring extreme circumstances, and so it was also much cheaper for doctors and hospitals to procure. Perhaps a lot of the exaggerated expenses also come from charging people for procedures they don't really need X for.

I do recall that my brother was in a car accident and had his jaw fractured and lower teeth knocked out via perforation by the ipad the air bag propelled into his chin. They had to put in a metal plating for the healing (of the hole between the lip and chin sewn shut) later to be removed, and the doctor in his private practice charged him $1500 whereas in the hospital the doctor works for the same procedure would've cost upwards of $6,000. In my teens when I went to Jackson Hospital to get some hand warts checked out, we were charged $525 to be manhandled by a male nurse carelessly pressing that frozen liquid on a q-tip all over my fingers, when the same q-tip and liquid was noticed by us week later for $40 at the local CVS.

[Garm]

I had bloodwork done a few weeks ago. I got a 40% discount because I wasn't insured (sort of; my insurance is basically disaster-only). Well, 25% discount for no insurance and another 20% for paying within 30 days.

I'm not sure if that 25% no-insurance discount is given because insurance companies will haggle a discount anyway or they expect people not paying through insurance to be unable to pay anyway. But I doubt anyone pays 'sticker price'. At 40% discount, your $3500 MRI would be more like $2100.

Sure, if you've got the money and you're single and don't do anything all that interesting (or are just rich) then going without insurance is pretty viable. If you're married and have a small child who is in daycare, you want/need insurance (little kids get sick almost all the time). If you want to actually take advantage of living in Colorado, you want/need insurance. And while we probably could have paid the $2000ish for my MRI, the arthroscopic surgery to repair my meniscus and my patella wouldn't have been feasible to pay out of pocket. Considering a lot of insurance plans that I've seen have a max out of pocket around $2500 (including HSAs), I gain a lot by having insurance.

[Dark567]

Sure, if you've got the money and you're single and don't do anything all that interesting (or are just rich) then going without insurance is pretty viable. If you're married and have a small child who is in daycare, you want/need insurance (little kids get sick almost all the time). If you want to actually take advantage of living in Colorado, you want/need insurance. And while we probably could have paid the $2000ish for my MRI, the arthroscopic surgery to repair my meniscus and my patella wouldn't have been feasible to pay out of pocket. Considering a lot of insurance plans that I've seen have a max out of pocket around $2500 (including HSAs), I gain a lot by having insurance.

What doesn't make sense to me, is why people think insurance companies are screwing people, when everyone seems to be saying that insurance companies are saving them a lot of money?

[kiklion]

Sure, if you've got the money and you're single and don't do anything all that interesting (or are just rich) then going without insurance is pretty viable. If you're married and have a small child who is in daycare, you want/need insurance (little kids get sick almost all the time). If you want to actually take advantage of living in Colorado, you want/need insurance. And while we probably could have paid the $2000ish for my MRI, the arthroscopic surgery to repair my meniscus and my patella wouldn't have been feasible to pay out of pocket. Considering a lot of insurance plans that I've seen have a max out of pocket around $2500 (including HSAs), I gain a lot by having insurance.

What doesn't make sense to me, is why people think insurance companies are screwing people, when everyone seems to be saying that insurance companies are saving them a lot of money?

There are a couple of reasons.

One reason is the claim that hospitals increase their fees in an effort to increase how much insurance will pay out. IE, If I charge $100 for something, insurance may only pay $60, but if I charge $180 I will get the actual $100 I want. Now the uninsured are also charge $180 but they don't have the agreement to pay less.

Furthermore, the savings can stem from the tax advantage of insurance. Example using easy numbers, my company pays $100 a month before tax for my insurance, and I pay $10 a month before tax for my insurance, and I cost the insurance $100 a month in reimbursements for procedures. Because it is before tax, it is really only costing my company $80 and me $6, so we are up $14, insurance is up $10 a month, and the government (everyone else, IE uninsured) is out the tax revenue.

I recently looked at my EoB, and my insurance has paid out ~25% of what was billed to them.

[CorruptUser]

I had bloodwork done a few weeks ago. I got a 40% discount because I wasn't insured (sort of; my insurance is basically disaster-only). Well, 25% discount for no insurance and another 20% for paying within 30 days.

I'm not sure if that 25% no-insurance discount is given because insurance companies will haggle a discount anyway or they expect people not paying through insurance to be unable to pay anyway. But I doubt anyone pays 'sticker price'. At 40% discount, your $3500 MRI would be more like $2100.

Sure, if you've got the money and you're single and don't do anything all that interesting (or are just rich) then going without insurance is pretty viable. If you're married and have a small child who is in daycare, you want/need insurance (little kids get sick almost all the time). If you want to actually take advantage of living in Colorado, you want/need insurance. And while we probably could have paid the $2000ish for my MRI, the arthroscopic surgery to repair my meniscus and my patella wouldn't have been feasible to pay out of pocket. Considering a lot of insurance plans that I've seen have a max out of pocket around $2500 (including HSAs), I gain a lot by having insurance.

I do have insurance; it's for things that you buy insurance for like "oh crap I have cancer and where am I going to get $150,000 for the treatments", not preventative care like "time for my annual tooth cleaning". With the annual tooth cleaning as the example, let's say it costs $100. I can either buy insurance for it or just pay the $100. If I buy the insurance, I have to pay $125/yr as opposed to $100, because the insurance pays out on average 80% of what it collects; the other 20% is for administrative costs, legal costs (which are HUGE), and yes profit. That is assuming no fraud; if 1/10 of all claims paid out are fraudulent, then I'm only getting 72% of my money back on average, so I need to pay $139/yr just for that $100 tooth cleaning. So for little, routine things, I'm better off not buying the insurance.

[lutzj]

I do have insurance; it's for things that you buy insurance for like "oh crap I have cancer and where am I going to get $150,000 for the treatments", not preventative care like "time for my annual tooth cleaning". With the annual tooth cleaning as the example, let's say it costs $100. I can either buy insurance for it or just pay the $100. If I buy the insurance, I have to pay $125/yr as opposed to $100, because the insurance pays out on average 80% of what it collects; the other 20% is for administrative costs, legal costs (which are HUGE), and yes profit. That is assuming no fraud; if 1/10 of all claims paid out are fraudulent, then I'm only getting 72% of my money back on average, so I need to pay $139/yr just for that $100 tooth cleaning. So for little, routine things, I'm better off not buying the insurance.

Part of the problem is that that $100 cost to the insurer comes as the result of heavy negotiation that brought the sticker price down from $150. Maybe what we really need is a law requiring providers to charge private and commercial buyers the same amount. (Of course, that would be irrelevant if we start forcing everyone to buy insurance anyway.

[CorruptUser]

I agree with the "same price for everyone". If you negotiate it for $50 for Insurer X, EVERYONE should be charged at most $50. Same goes for medicine; if Merck-Medco sells drug D to France for $5/bottle, I shouldn't have to pay $50/bottle.

Not just in the health industry, but in the regular market place too; if Walmart buys product J for jack, my little warehouse should also be able to buy the product for jack.

[Griffin]

CorruptUser, having family involved in the medical industry, I think your underestimating the value saved from not using insurance.

For your teeth cleaning, it's pay 125$ a year for insurance, or 150$ for the procedure (with the listed price being $300). Due to a combination of collusion, price fixing, and the fact that people paying for their procedures is seen as a huge risk, and really - what are you gonna do? You're not going to be a repeat customer often enough for them to get much out of you (unlike the insurance company, who has a lot of pull), so why NOT try to squeeze you for a little extra?

Insurance industries are not stupid, and they want that $25 on top, and only encourage that sort of thinking as best they can.

Insurance is quite literally much cheaper for many of the basic procedures.

It's why, instead of insurance, I've always wanted a Healthcare Plan, with a hospital or network, and then a critical care insurance on top of that.

Unfortunately there's not many places in the US that offer that sort of thing.

[Dark567]

Part of the problem is that that $100 cost to the insurer comes as the result of heavy negotiation that brought the sticker price down from $150. Maybe what we really need is a law requiring providers to charge private and commercial buyers the same amount. (Of course, that would be irrelevant if we start forcing everyone to buy insurance anyway.

But that's generally not what we see at all, providers routinely charge lower amounts to private persons than insurance companies.

[Griffin]

But that's generally not what we see at all, providers routinely charge lower amounts to private persons than insurance companies.

Do you have evidence for this? Experience and the numbers I've seen say otherwise, but hard data is always appreciated, and it may vary.

[Garm]

More or less what Griffin said. I pay less over the year for dental insurance than the cost of bi-yearly cleanings for my wife, me and my son. Add in the cost of the crown for my broken tooth (soccer ball to the face) and all the fillings I got during 6 years of dental neglect and it's saving me a butt-ton of money. This savings isn't a problem for me. What I want, ultimately, is a system that does what you're talking about, namely aggressive price controls, in addition to getting everyone on some sort of insurance plan that can save them money. I have no problems "wasting" money during the years when I'm not tearing my meniscus, having a kid, or breaking teeth. I'm happy to subsidize care for other people if they do the same for me in return. Life presents us with a series of ups and downs and the insurance helps smooth those over.

We also need to get serious about end of life care. We need to start talking to people about what they want (keep meaning to have this conversation with my parents, that's gonna be awkward) and we need to figure out a decent way to pay for it all. If, in fact, the rise in health care costs is largely attributable to people living long and sicker (better treatments for end of life illness that extend how long an individual lives with those illnesses) then we ought to address that fact. Again, I'd gladly pay a couple more bucks a month to medicare/medicaid taxes if I knew I could count on there being a system present for when I start down the long, slippery slope toward death.

[CorruptUser]

Again, I'd gladly pay a couple more bucks a month to medicare/medicaid taxes if I knew I could count on there being a system present for when I start down the long, slippery slope toward death.

Assuming you are a millenial, Social Security is going to collapse looong before we see one red cent of it. If Gen Xer, you probably won't see much if anything at all. Same goes for medicare. Not sure about medicaid; that might last.

It's part of the reason I hate Soc-Sec; whether it collapse in 40 years or tomorrow, I get nothing, so what incentive do I have to support it at all?

[Garm]

Again, I'd gladly pay a couple more bucks a month to medicare/medicaid taxes if I knew I could count on there being a system present for when I start down the long, slippery slope toward death.

Assuming you are a millenial, Social Security is going to collapse looong before we see one red cent of it. If Gen Xer, you probably won't see much if anything at all. Same goes for medicare. Not sure about medicaid; that might last.

It's part of the reason I hate Soc-Sec; whether it collapse in 40 years or tomorrow, I get nothing, so what incentive do I have to support it at all?

I hear that. I'm Gen-X. I'ma work 'til I die.

[kiklion]

Again, I'd gladly pay a couple more bucks a month to medicare/medicaid taxes if I knew I could count on there being a system present for when I start down the long, slippery slope toward death.

Assuming you are a millenial, Social Security is going to collapse looong before we see one red cent of it. If Gen Xer, you probably won't see much if anything at all. Same goes for medicare. Not sure about medicaid; that might last.

It's part of the reason I hate Soc-Sec; whether it collapse in 40 years or tomorrow, I get nothing, so what incentive do I have to support it at all?

We could always take out enough elderly to reset the cycle...

[Garm]

Again, I'd gladly pay a couple more bucks a month to medicare/medicaid taxes if I knew I could count on there being a system present for when I start down the long, slippery slope toward death.

Assuming you are a millenial, Social Security is going to collapse looong before we see one red cent of it. If Gen Xer, you probably won't see much if anything at all. Same goes for medicare. Not sure about medicaid; that might last.

It's part of the reason I hate Soc-Sec; whether it collapse in 40 years or tomorrow, I get nothing, so what incentive do I have to support it at all?

We could always take out enough elderly to reset the cycle...

And end up here? http://en.wikipedia.org/wiki/Logan's_Run