The Cost of Free Health Care

Just compare their balance sheets, which private insurance companies are deep in debt?

Who is claiming that fraud in the U.S. is lower than Canada, England, France or any other country with single payer health insurance? Or are you insinuating that single payer eliminates or reduces fraud?

 

So it is clear that you have absolutly no evidence to support your statement that private insurance is superior in preventing fraud. Or are you really claiming that the high profit of private insurance demonstrates higher efficiency in reducing fraud? Could it, just possibly demonstrate that private insurance just simply costs more?

 

I gave you one example where I had first hand knowledge. Would you think a private insurance company who was not being reimburse by the government would say "Don't worry about the false charges, we'll pay them."?

Does private insurance cost more than government provided insurance? There is no "free lunch", and those who actually pay for health care are paying more to cover those who are paying little or nothing.

 

Now that is a genuinely profound thought! And next we will discuss the sun rising in the morning.

 

Insurers generally aren't paying claims with their own money so it's not a wildly different situation.

 

saved lives means people go back to work and remain productive

 

Only true if they were working and productive to begin with. No one is indispensable. While few, if any, actually look forward to death it is an integral part of life.

 

It is indeed. Feel free to discuss "the sun rising in the morning" if you wish with someone who has the time to waste on such.

Oh, and if you're still wanting evidence in support of my previous post, google 'eric holder+medicare fraud'.

 

There's some truth in that, but private sector insurance companies are in business to make a profit and it stands to reason that reducing/eliminating waste and fraud would be of great importance to their bottom line in attracting/retaining investors. Government/politicians, on the other hand, have greater interest in attracting/retaining voters regardless of the cost to the taxpayers.

 

The vast majority look forward to working and being productive. After all, they have families to support.

 

Why not compare costs of single payer healthcare in other western nations instead?

Yes, they do have higher taxes and they have non-profit healthcare for everyone and a for profit healthcare system that anyone can buy into if they don't like the single payer system.

The cost of providing healthcare comes from salaries, drugs, facilities and equipment. None of them are cheap but single payer healthcare systems keep costs down by using the power of bulk purchasing and the stability of having staff employed by the government rather than the private sector.

As far as profit goes what you are missing is the profit on profit on profit factor. Let me explain. A drug company makes drug that it charges $100/dose. The physician who prescribes the drug has his overheads and profit margin so that adds another $50 to each dose. The pharmacy has to cover their costs of dispensing the drug and their overheads and profits so now the cost is $200/dose. If there are specialists or hospitals or facilities for chemo or dialysis then there are overheads that run into the thousands per dose. And yes, the insurance company has it's overheads and profit margins on top of all of those already baked into that prescription.

At each and every level there is a profit margin and it sometimes exacerbated by the negative feedback loop instituted by the insurers who try to "cut costs" by "underpaying" for the drug, service, etc. When that happens each of the various levels factors in how much the insurers are underpaying them and add that percentage back into their pricing as means of maintaining their profit margins. What is worse is that negative feedback loop results in price escalation as each side tries to pre-empt the other.

So, in summary, healthcare is expensive because of hidden profit margins and inane attempts to control them in the private sector where there are competing interests constantly driving up the costs and profits.

In single payer systems that negative feedback loop doesn't exist so the costs remain lower while the actual services provided are as good, if not better.

 

That debunked inane strawman is so old it has hieroglyphs for a date stamp.

- - - Updated - - -

Agreed, but Medicare is already single payer so that is where it can start. Make it available to all veterans and children to begin with and take it from there.

 

Hence the need for a graduated income tax with higher brackets than we currently have to actually cover the cost of running this nation.

 

Markets with an effective monopoly work reverse to supply and demand.

Electricity is a good example in nsw. With usage shrinking, the put their costs up to achieve their ROI.

Same would happen with healthcare, make it free, more people would use it, with more people using it, you can have more efficient cost structure , economies of scale and achieve a strong ROI with less individual cost to each punter.

 

"Private sector insurance companies are in business to make a profit and it stands to reason that" they would deny coverage for expensive procedures, which is exactly what they were doing, before the ACA stopped that malpractice.

 

Oh wow! Once we have free healthcare we can just sign up for anything we want. Who wants a heart transplant? How about a course of chemo? They are doing a special on bowel resections next week.

 

Maybe you can learn to understand the economics behind it:

"As personal income increases, people demand more and better goods and services, including health care. This means that holding other factors constant, as higher personal income increases the quantity and quality of care demanded, overall health care spending increases as well. GDP is a good indicator of the effect of increasing income on health care spending."

Source: United States Government General Accounting Office GAO-13-281 PPACA and the Long-Term Fiscal Outlook, page 33.


Here's an example of how that plays out in real life.


The Christ Hospital
2139 Auburn Ave.
513-585-2000
thechristhospital.com

* Additional Features: All-private birthing suites and post-partum rooms; feng sui and hydrotherapy birthing suites; nursing staff with an average 20 years experience; new interactive TV system; dine-on-demand room service; updated infant security system; no restrictions on visitation hours (some limitations may be in place during flu season); neonatologists on call 24 hours; Special Care Nursery with individualized bed space that can be personalized

Atrium Medical Center’s Family Birth Center
1 Medical Center Dr., Middletown
513-424-2111
atriummedcenter.org

* Children permitted in delivery room with mother’s approval. Additional Features: Board-certified doctors and nurses experienced in obstetrics, neonatal care, including nursery and fetal monitoring. Contemporary birthing suites include flat-screen TVs, On-Demand movies and bathrooms with showers and jet tubs. Babies may stay in nursery or “room” with mom; fold-out sofas for overnight guests. Prenatal services and childbirth education classes available.


Do you think the rest of the world pays for Feng Sui consultants to design and maintain hospital rooms?

How about Flat Screen TV's? On-Demand Movies?

Better guess again.

 

Nce try at avoiding supporting your claim that insurance companies do a superior job at preventing fraud. And while you are avoiding documenting your positions you mght try ducking how you could possibly believe that private insurance company profits are any evidence they are superior at preventing fraud. One assumes you at least understand that profit is basically income minus cost and that the easiest way for private insurance to increase profit is to raise income ( or to make it simple for you they raise prices which is why we have one of the most expensive healthcare systems in the world)

 

Hey, thanks for the feedback.

Yeah, see I make no claim to fame to being a brilliant economist and an expert on health care costs. I realized when I did the math that there were probably other factors, such as the profit on top of profit you talked about. What I think is that with a single-payer national health plan some of that may be eliminated, but we can't get rid of all of it. The myriad companies that supply and equip health providers are profit making businesses. We must also remember that the federal government would become the insurer with thousands of new federal employees to process all the work. And let's remember that federal employees are paid pretty well and have fringe benefits like retirement programs. I would be willing to bet that the average federal employee processing claims makes at least, if not more, than the average private insurance employee doing the same thing.

But let's just say for the sake of discussion that my estimates were 20% too high. It's still a lot of money that we would have to be willing to pay. The other thing to remember is that yes, our health care system is expensive, but the quality and timeliness of treatment really is very good. I personally do not believe that U.S. citizens will be willing to sacrifice any level of service - whether it be the timeliness of treatment or the quality of care and treatment. So that also is a challenge that would have to be met.

And, of course, that is the roadblock.

Americans are addicted to deficit spending. We like programs, but we don't like paying for them. If, all of a sudden, the government raised taxes just to pay for what we're spending now, they would have to raise about 1/3 more money. (This is for the entire federal budget.)

How well do you think that would go over?

And, 41% of current Medicare spending is paid for by direct government funding. The premiums seniors pay, plus a few other smaller sources of income, only pay 59% of the cost. The problem I see is that we are talking about trying to provide health care to everyone while we are not even truly paying for the 12% of the population covered by Medicare. That 41% the government is spending is mostly deficit spending. Remember, using round figures, our federal budget is $3 trillion, but the government only takes in $2 trillion from taxpayers. The point is, we, as a nation, are not even willing to actually pay for medical care for 12% of the population with real money out of our pockets. So what makes us think we will be willing to pay for 100% of the population?

Furthermore, the upper middle class and above has health care insurance. And, they pay the lion's share of all income taxes. (About 47% of income earners owe no tax.) They are not going to be willing to carry the other half of the nation on their backs, and it is hard to blame them. After all, most people in the upper middle class and above have worked hard to get where they are, and they provide medical care insurance to themselves and their families. I am a compassionate person, but even I would resent having a huge chunk of my income taken away to pay for medical care to half the population who I don't really feel responsible for. I feel responsible for my family and the truly vulnerable in our society, but not for everyone. Is that really selfish and evil?

So anyways, I see some gigantic problems with Bernie's "health care for all" proposals. (As an aside, I like Bernie as a person. I think he is by far a better human being than his despicable opponent.)

Look, here's my suggestion. It is a very gradual increase in government income. What if we set as an initial goal to just pay for Medicare for seniors? What if we added a few pennies to employees' and employers' contributions and closed the cost-income gap in just that program. What if we just gradually added pennies to that contribution (per dollar) until that gap was completely closed? And then when we had accomplished that, what if we tried to cover the 5-year demographic of 60-64 year olds? We would add another penny per dollar to accomplish that. If we could accomplish that, what if we added the 55-59 year old demographic? It would cost us some more pennies per dollar. But this gradual increase would not be a gigantic shock to our economy like a sudden imposition of humongous new taxes would be to cover everyone. Meanwhile, as these older folks got covered, the cost of medical insurance for younger people would gradually decline because the older you are, the more you draw on the insurance. And we could continue very gradually adding people to the system, while very gradually imposing the cost of that on the economy.

What do you think about that?

 

In the private sector pricing is based on the coverage that is agreed to be provided. The choice of receiving the most expensive procedures is left to be a choice by the purchaser. If you want the most expensive treatments/procedures to be provided you simply pay the cost of the plan that provides them. If you do not, and later find need for them that is not malpractice and you are entitled to what you have paid for and nothing more. Of course you could simply pay out of pocket for what you didn't want to pay for when you purchased what is available under the plan you have.

Each person is 'entitled' to live within the means they produce. From where does the belief arise that because someone else has the means you are 'entitled' to having them pay for your need and/or wants?

- - - Updated - - -

I take it you didn't google "eric holder+medicare fraud".

Inflation results in prices of everything rising.

 

Which part of my 2nd sentence in that post would you like me to explain to you?

 

I like your idea of a phased approach. As far as raising taxes are concerned it is primarily only the very upper incomes who are not paying the appropriate income tax rates. Everyone else is more or less where they should be. Yes, raising the payroll taxes, AKA flat taxes, is where the issue comes into play. They need to be graduated too IMO and then it is less of a burned on the taxpayers/consumers that keep the economy running.

So yes, let's make it a phased process of raising taxes and increasing coverage and giving government the bargaining power it needs.

One more comment that you raised was the overhead of additional government employees. Private sector healthcare insurance overhead is about 20% whereas for Medicare it 3%. The reason for the massive discrepancy is two-fold. Obviously the private sector has the 4-5% profit overhead but that is offset by providing it's own employees health insurance at cost. Secondly, and this is the big one, they have all their networks and rules and what is allowed and what isn't. They have created a massive overhead for themselves and they are constantly having to deal with screw-ups and exceptions and new enrollments, etc, etc. Medicare is single payer and it sets a rate for a service and it pays that rate, period. You enroll once and that is it. Keeping it simple is what works and keeps down costs.

http://www.pnhp.org/facts/single-payer-faq

 

Except for the fact that the income of the average American family as measured in constant dollars hasn't increased for thirty plus years your 2nd sentence might have some relevance .

 

If you actually believe that you don't belong in any discussion involving economics.

 

Except that I was only talking about other western nations as I stated in my first sentence.

Context is everything.