Is Health Insurance Socialism?

[freeztar]

Originally Posted by lawcat

Everyone has that concern. But I do not. It will get paid from the taxes. However, the system must be reformed.
First, insurance companies must be put out of business. They serve no purpose other than profit making. The intermediary who limits our benefits and tries to get out of coverage whenever possible, and tells the doctor what can be prescribed, must be put of his misery for our own sake. Insurance companies serve no purpose, other than their own.
Second, the approach and training to medicine must be changed, including pharmaceuticals. If we need 8 doctors, and the private hospital hires 4 to do the full job, they are doing us a diservice. Hire all 8 doctors for less. make those 8 doctors worry about health and not plans and coverages. if we need school reforms so be it. canada, Britain, France, Spain have great doctors aand are doing better and much more efficiently then we do. We spend considerably more than Japan, France, britain, Spain, Canada, and we are ranked much lower then them.
Third, we have to build hospitals and clinics.
If private hospitals and insurance companies can reap profits and spend the most money in the world on healthcare of any industrialized nations, and yet provide less, then there is money and it can be done. The government can do it. there are great models of systems that work and those can be modeled here.

Thanks lawcat. I'm left wondering though...where are the facts? Do you have sources for the USA being ranked lower than the countries you mention? On what basis?

An argument I've often heard is that people come from all over the world to seek professionals in the USA. Sure, it might be specialties, but I think that is what our current system does best. We create specialized surgeons that are not produced overseas, for whatever reason. I like to think it is our free market system that produces this, but I could be wrong.

So, if we agree there, then we surely agree with the same care being delivered to every citizen. Unfortunately, it's not worth the time of a grad med student who wishes to go to school (and into debt even further in most cases) to obtain specialization. Where is the incentive? If they get paid the same as their 8 year surgeons that have no depth to the level of specialization, why would anyone do that other than selfless dedication to their career goals?

Now, if the gov't is willing to float the bill to pay a higher grade salary to these people, then that might work. But again, we're back to the payment. It seems you are happy to be taxed for this (and I appreciate this because I'd be the same way if I was in that bracket ), nonetheless, a lot of people in that bracket disapprove. From talking to folks, it's not always about that, but it's certainly a negative mark in their views. Do you think it is only selfish greed that is holding us back? If not, what *is* holding this back?

[freeztar]

Originally Posted by InfiniteNow

That concern of "financial burden" also omits the fact that we will bankrupt ourselves within just a small handful of decades if we don't change anything. In sum, we'll pay less by making the change than we would if we left things alone.

Excellent graph, IN!

Rather than matching the slope of tax revenue with the spending, why not weed out the "entitlement" spendings? I'm all for healthcare reform, but I think it needs to be a long range plan. When we increase gov't spending in one regard, it is prudent to cut spending in another regard. Where should we make the cuts? How will "Universal Healthcare" change the outcome of this graph?

These are not challenges. I'm sincerely interested in learning how and why the current plan will, or will not, work.

[lawcat]

I can not agree. This has nothing to do with tax brackets. National healthcare has to do with increasing efficiency, cutting the fat from cost of healthcare, and making healthcare available to everyone everywhere for everything they need. AS of 2003:

United Kingdom: (1) population 62 million, (2) cost $2300 per capita = public.
United States: (1) population 300 million, (3) cost $5700 per capita = private.
http://www.kff.org/insurance/snapshot/chcm010307oth.cfm

Yet, "The U.S ranking was 24th, worse than similar industrial countries which have very high public funding of health such as Canada (ranked 5th), the UK (12th), Sweden (4th), France (3rd) and Japan (1st). But the U.S ranking was better than some other European countries such as Ireland, Denmark and Portugal which came 27th, 28th and 29th respectively. "
Socialized medicine - Wikipedia, the free encyclopedia

Morover, all those countries that ranked higher and around us have public healhtcare, spend less, and have excellent doctors; billions of people are treated. Our system simply can not stand. It is inefficent, wasteful, and fails to achieve its goals.
Aetna, Blue Cross, etc. must go out of business. We do not need them. It's wasted money. the system is cumbersome and inefficient.
We need different kinds of doctors; not the CEO looking type or a businessman, but a health professional.
I do not care how they get educated, but they must be paid in accordance with the nationalized system Sweden, UK, Australia, Canada all have doctors, and they are no worse then ours. But even if the whole world had worse doctors, the price aint worth it--they are wasteful, the system is based on plans and coverages and limitations, and it costs more. It is wholly unnecessary. It is a bigger bureaucracy than anything in our government.

You can tell me that increased debt is good for economy, and we depend on financial institutions such as insurance field. But this can not stand. Evidence against it is all over.
It is precisely these costs and inefficiencies that are driving us into the ground. We drowning in high costs and debt. We must change the healthcare system as a whole. There is no other way. It's the only way that makes any financial sense.

[Cedars]

Originally Posted by HydrogenBond

The American Healthcare system is based on capitalism. But if one looks at how insurance works, it uses a socialist approach. In other words, everyone is required to pool their money (roughly similar amounts for similar services) irregardless of one's use of the health care system. In a free capitialist system, one should only pay for what they consume. Those who who consume more resources should pay more. But in the insurance commune the healthy are required to suppliment the unhealthy.

It is purely capitalist. It is no different from the financial brokers on wall street. Insurance is the middleman but gouging both ends. Gouging the consumer and fighting the providers to pocket more and more of the pool money.

It was more socialist when major health insurers were non-profits. Various lobbies (HMOs) got laws changed which basically put non-profit insurance providers out of business by requiring capital to cover expenses, prior to these law changes, the non-profits paid claims via the income received in the weekly/monthly/bi-monthly etc premium payments and kept what they needed to cover admin costs. This is why way back in the good old days you didnt have the insurance companies fighting with doctors/pre-approval of services. The laws required the non-profits to use their income to provide the services, lower the premiums or lose their non-profit status. When they became required to be 'for profit' is when costs skyrocketed. Add into that various state laws mandating over-charging (higher service prices on the insured) to cover the costs of the un-insured. This is why you can negociate (for the most part) much lower offices visits if you pay in cash because you have no insurance. For regular visits anyways. I dont know if that would work on surgery, cancer, etc.

[InfiniteNow]

Originally Posted by freeztar

Thanks lawcat. I'm left wondering though...where are the facts? Do you have sources for the USA being ranked lower than the countries you mention? On what basis?

We spend a metric assload more money per capita than practically all other developed nations and get about 5 times less in terms of care and performance than other developed nations when it comes to healthcare.

The numbers showing our pathetic ranking come from the WHO.

Full Report: http://www.who.int/whr/2000/en/whr00_en.pdf


Summary:

WHO | World Health Organization Assesses the World's Health Systems

The U.S. health system spends a higher portion of its gross domestic product than any other country but ranks 37 out of 191 countries according to its performance, the report finds.

<...>

One key recommendation from the report is for countries to extend health insurance to as large a percentage of the population as possible. WHO says that it is better to make "pre-payments" on health care as much as possible, whether in the form of insurance, taxes or social security.

While private health expenses in industrial countries now average only some 25 percent because of universal health coverage (except in the United States, where it is 56%)

<...>

WHO's assessment system was based on five indicators: overall level of population health; health inequalities (or disparities) within the population; overall level of health system responsiveness (a combination of patient satisfaction and how well the system acts); distribution of responsiveness within the population (how well people of varying economic status find that they are served by the health system); and the distribution of the health system's financial burden within the population (who pays the costs).

Please note that, due to the complexity of performing such clear and articulate measures, the report above is only as recent as 2000. However, all major indicators suggest that costs have risen dramatically since that time, and performance has continually become worse in terms of US healthcare output.


As for the comments re: capitalism:

The simple fact is that capitalism can't quite work in healthcare insurance. The company is in place to make money. That's their "bottom line." They maximize profit for shareholders, and they do this by minimizing expenditures and maximizing income. Every single claim/payment is an expenditure, and hence bad for business.

This is basic economics. A purely for profit health insurer does not have the health or well being of it's customers as a primary concern. Their primary concern is making the most money possible.

Again... to summarize, the best business outcome for a capitalistic insurer is to maximise their premiums (which translates as income) while minimizing their payouts (which translates as expenditure... and ultimately less care for patients who need it). If you carry this to its logical conclusion, the perfect outcome for the insurer would be to collect premiums and never payout a cent... and that's the general direction they've been taking us these last several decades.

While never paying out a cent is rather impossible to achieve, they instead continue to minimize payouts and continue increasing premiums... said another way... bankrupting and killing american citizens.


Nobel prize winning econimist Paul Kurgman had a great article explaining these exact points just last week, and you can read that here:
Why markets can’t cure healthcare - Paul Krugman Blog - NYTimes.com

[lawcat]

Originally Posted by InfiniteNow

The simple fact is that capitalism can't quite work in healthcare insurance.

No truer words have been stated. The slogan "if you have money you will get great care, and if you don't too bad" does not work in healthcare. We are paying increasingly more and more to get less and less. And in the end, 50 million are not covered, and in general everything is not covered. There are risk assessments, there is audioting, there are administrative overheads, tehre is all the crap we do not need. It's simply time to destroy the healthcare system, and the health insurance companies.

[InfiniteNow]

A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses. Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

Himmelstein, D, E. Warren, D. Thorne, and S. Woolhander, “Illness and Injury as Contributors to Bankruptcy, “ Health Affairs Web Exclusive W5-63, 02 February , 2005.



NCHC | Facts About Healthcare - Health Insurance Costs

In 2008, total national health expenditures were expected to rise 6.9 percent -- two times the rate of inflation. (1) Total spending was $2.4 TRILLION in 2007, or $7900 per person (1). Total health care spending represented 17 percent of the gross domestic product (GDP).

U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.3 TRILLION in 2017, or 20 percent of GDP. (1)

In 2008, employer health insurance premiums increased by 5.0 percent – two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,700. The annual premium for single coverage averaged over $4,700. (2)

(1) - Keehan, S. et al. “Health Spending Projections Through 2017, Health Affairs Web Exclusive W146: 21 February 2008.
(2) - The Henry J. Kaiser Family Foundation. Employee Health Benefits: 2008 Annual Survey. September 2008.

[HydrogenBond]

I like the idea of the government serving two health care roles. The public sector should take over responsibility for catastrophic care. The idea is to take the highest price items and services out of the private sector insurance premium calculations. This should cause insurance premiums to fall.

The second thing is the government should take over the entire malpractice operation, socializing that aspect of the legal system. This will reduce cost to doctors, with the hope they will pass on the savings further lowering costs. Civil servant lawyers and judges would be cheaper, while doing the same thing.

The main reason the whole thing has gotten so expensive is due to the free market.

Let me give an analogy to the situation. Many auto manufacturers factory spec oil changes at 5000K miles. Although this is all that is needed based on objective standards, many quickie lube shops have opened, which pitch we need to change the oil every 3000 miles. How can one argue with that, since they are doing no harm. One may even argue if an auto is not maintained, it may burn oil, such that the 3000 or even 2000 mile oil change may save those cars. But it does not apply, objectively to well maintained cars.

It is possible that free enterprise has created the quickie lube version of medicine, convincing people they need their oil changed every 3000 miles instead of 5000 miles. It does no harm, so how can you argue.

Luckily, the inefficiency of the government will default back to the 5000 mile oil change for the same costs, beyond which the tax payers will get upset. Maybe once new objective data has been regenerated, the 5000 mile oil change will return. Once that mentality has been absorbed into habit, maybe the public sector can then pass the process back to the private sector for higher cost savings, due to efficiency.

[freeztar]

Originally Posted by lawcat

I can not agree. This has nothing to do with tax brackets.

Really?

Originally Posted by NYTimes

They do not raise revenue as quickly as health costs rise. The plan to impose a surtax on top earners, for instance, pays a decent chunk of the bill over the next few years. But the revenue from the tax rises only as fast (roughly) as the United States economy grows. The same is true of most taxes.

Health costs, on the other hand, are growing much more quickly than the economy. Over the last decade, the economy has expanded by about 20 percent, and health spending has ballooned 50 percent. The gap isn’t about to start closing, either.

I suppose this has nothing to do with an across the board tax. Someone (some group) has to float the bill. If it ends up being 5% (or whatever %) across every income level, then I agree it has nothing to do with brackets.

National healthcare has to do with increasing efficiency, cutting the fat from cost of healthcare, and making healthcare available to everyone everywhere for everything they need.

I agree.

AS of 2003:

United Kingdom: (1) population 62 million, (2) cost $2300 per capita = public.
United States: (1) population 300 million, (3) cost $5700 per capita = private.
Snapshots: Health Care Spending in the United States and OECD Countries - Kaiser Family Foundation

Yet, "The U.S ranking was 24th, worse than similar industrial countries which have very high public funding of health such as Canada (ranked 5th), the UK (12th), Sweden (4th), France (3rd) and Japan (1st). But the U.S ranking was better than some other European countries such as Ireland, Denmark and Portugal which came 27th, 28th and 29th respectively. "
Socialized medicine - Wikipedia, the free encyclopedia

Thanks!

Morover, all those countries that ranked higher and around us have public healhtcare, spend less, and have excellent doctors; billions of people are treated. Our system simply can not stand. It is inefficent, wasteful, and fails to achieve its goals.
Aetna, Blue Cross, etc. must go out of business. We do not need them. It's wasted money. the system is cumbersome and inefficient.
We need different kinds of doctors; not the CEO looking type or a businessman, but a health professional.

Having been burned myself, and my credit marred for several years due to an insurance companies lack of following through on their promise, I tend to agree.

I do not care how they get educated, but they must be paid in accordance with the nationalized system Sweden, UK, Australia, Canada all have doctors, and they are no worse then ours.

No worse how? I'm quite sure specialized docs in the US make more.
Of course, the insurance companies are partially to 'blame' for this.

But even if the whole world had worse doctors, the price aint worth it--they are wasteful, the system is based on plans and coverages and limitations, and it costs more. It is wholly unnecessary. It is a bigger bureaucracy than anything in our government.

For the general public, I agree. For the select elite, I disagree.

You can tell me that increased debt is good for economy, and we depend on financial institutions such as insurance field. But this can not stand. Evidence against it is all over.

I've never made that claim and I don't plan to.

It is precisely these costs and inefficiencies that are driving us into the ground. We drowning in high costs and debt. We must change the healthcare system as a whole. There is no other way. It's the only way that makes any financial sense.

Funny. I feel the same way about our energy sector. (nonsequiter...sorry)

I have no problem with reform. I just don't think we can expect to wake up tomorrow and everything be peachy. These things take time. Let it fester in Congress for a while and let's see what they can come up with, with our support.

I don't expect a revolution, but I do hope that we move in the right direction.

[CraigD]

Originally Posted by Cedars

It was more socialist when major health insurers were non-profits. Various lobbies (HMOs) got laws changed which basically put non-profit insurance providers out of business by requiring capital to cover expenses, prior to these law changes, the non-profits paid claims via the income received in the weekly/monthly/bi-monthly etc premium payments and kept what they needed to cover admin costs.

Having worked 25 years for a non-profit healthcare provider (not an insurance company – an actually member-funded system of clinics and hospitals, technically knows as a “staff model health maintenance organization (HMO)”), witnessing the appearance, rise, and collapse of similar systems in my service area, and experienced first hand – and, as an enterprise, survived – competition from for-profit insurance companies and their networks of doctor’s offices, clinics, and hospitals (technically known, respectively, as indemnity insurance companies and “preferred physician plans (PPOs)” or “network models”), I find this an interesting claim, Cedars.

Do you have source for it? Primary source references to the laws and regulations, or better, secondary source analysis and commentary on them, and their effects?

My observation about how large, for-profit indemnity insurance companies drove small staff and mixed model HMOs out of business is that they did it the old-fashioned, market-driven way: by under-pricing (and occasionally strategically over-pricing – more on that later) us.

In the 1980s and ‘90s, the market was effectively all employers offering health insurance benefits to their employees, and these employers’ decisions about which health insurers and/or providers to offer, and what if any additional cost to pass on to their employees, were usually based on a simple “go with the cheapest” rule. Because the large insurers had large cash reserves and the resources of their regionally and product diversified parent companies, they were able to reduce their premiums (monthly per-member/family price) far below the amount necessary to pay for the services they provided, and keep them there until their competition had lost too much money to survive, either by matching these unsustainably low premiums, or by not matching them, and losing the business of too many employers and their employees, who were understandably unwilling to pay more than they had to. The HMOs I know that survived this “price war” did because they had the financial backing necessary to operate at a loss while the others collapsed – in most cases, affiliation with large, well-funded medical schools and teaching hospitals, and in one case, a large, multi-state non-profit organization.

Originally Posted by Cedars

This is why way back in the good old days you didnt have the insurance companies fighting with doctors/pre-approval of services.

My second-hand personal experience with health care finance goes back to the 1960s, and I’ve a smattering of experience with history on the subject going back to the late 19th century, or arguably medieval times, and am pretty confident a “good old days” when insurers didn’t fight with providers over payment never existed, except possibly for a small population in the early days of CHAMPUS (1956 through about 1975) and Medicare (1965 through about the same).

Nonetheless, the popular belief in a “good old days”, somewhere around the middle of the 20th century in the US, I guess, is based in fact, though fact strongly subject to perception. It was due less to the policies of insurers, I think, than a combination of an absence of very expensive medical procedures and devices, and a difference in professional culture and ethics among US physicians and hospital administrators, manifest as a willingness to provide services for which they expected never to be paid. (there’s an long-administered entering medical student “why do you want to be an MD” survey often cited as evidence of this – I’ll try to find it and update this post with it).

Originally Posted by Cedars

The laws required the non-profits to use their income to provide the services, lower the premiums or lose their non-profit status.

While I think this is a pretty good summary of what not-for-profit (501c) legally is, it omits, I think, an important option available for non-profits to dispose of net income (AKA profits). They may use it to acquire capital goods – that is, new equipment, buildings, etc. In short, a non-profit may “burn” its profits by growing.