Category Archives: Health Care

Econ 101: A Lesson in the Tender Mercies of Medical Care

Posted on October 14, 2009 | Leave a comment

So, it turns out that while you may be able to legislate price, you can not legislate costs:

For years, Mayo Clinic officials have complained that Medicare and Medicaid pay less than what it costs to treat patients.

Now they’re doing something about it.

In the past week, the Rochester-based clinic said it will stop caring for 50 Medicaid patients in Montana and Nebraska starting Jan. 1, unless they have a rare disease that can’t be treated elsewhere. Also on that date, a handful of Mayo’s primary care doctors in Arizona will opt out of Medicare, forcing some 3,200 patients to pay out-of-pocket or find new providers.

Really!?!

You mean that when government imposes price ceilings you get shortages?  Who would have thought that?

The difference between prices and costs is not just a fine distinction made by economists. Prices are what pay for costs — and if they do not pay enough to cover the costs, then centuries of history in countries around the world show that the supply is going to decline in quantity or quality, or both. In the case of medical care, the supply is a matter of life and death.

…

When politicians talk about “bringing down the cost of medical care,” they are not talking about reducing any of these costs by one cent. They are talking about forcing prices down through one scheme or another.

-Thomas Sowell

It is a law as sure as gravity; when you artificially reduce the price of something below what the market would otherwise demand, you will get less of it or worse of it.

Count on it.

Postscript:  For added fun, here is a foretaste of the feast to come:

“Both of these moves are very difficult for us to make,” said spokeswoman Shelly Plutowski. “Both point to the fact that we as a country need to change the way we pay for health care. Mayo Clinic and other providers lose money on every Medicare patient we see, and the same goes for Medicaid.”

Last year, it cost Mayo $840 million more to treat Medicare patients than it received in payments, Plutowski said. The clinic also lost $100 million treating Medicaid patients, she said.

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Posted in Economy, Health Care

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The Mind of the Leftist

Posted on October 14, 2009 | Leave a comment

I am working on a project at the office with some colleagues that are not from the United States.  During lunch we had some time to chat and so I took the opportunity to ask them what “the world” thought of Obama’s Nobel.  They grinned, a bit more sheepishly than I thought they would, and admitted that it was, indeed, a little early for him to win.  So far so good.

With my toe firmly in the water, I decided to get their take on Universal Health Care.  I felt that their insights would be useful, one being from Italy and the other from Slovakia.  Before I go on, I should say that these guys are some of the most educated people I have worked with in a long time.  And while they have recently been at the Northeast Ivy; Harvard, they have degrees in the sciences as well.  In fact, the Italian has his PhD in physics.

So, imagine my surprise when these two highly educated scientists came down in favor of universal health care.  And more than that, they both felt it is a right as citizens to have this health care provided to them.

I am stunned.

Leftists are everywhere.

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Posted in Health Care, Politics: North Carolina

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Jindalcare

Posted on October 6, 2009 | 1 comment

Alan Colmes is talking about the new health care plan proposed by New Orleans governor Bobby Jindal.  Jindal outlined his plans in a Washington Post article. Now, I have been saying for a long time that the Republicans need to step up and stand out.  For sure the plans offered by the Democrats are in huge need of being said “No” too, but at some point, you simply have to bring a plan to the table.  A vibrant plan.  A plan that’s marketed and jazzed and finally sold to the public.

Jindal is doing that; or trying to.  He correctly points out that Washington’s plan is dead and going no where.  In fact the public is tired of see Obama and his administration rehashing the same old talking points over and over again.  Even The Chairman himself is no longer able to “Shine the sun of his personality” to make this problem of his go away.  So, Jindal is trying to seize the opportunity and stand out.  Announce his own plan and see if he can get the Conservatives to back him.

I’m guessing they won’t.  And hoping.

I get the fact that there has to be some compromising in this.  I understand that a world run exactly as I want is as bad a place as a world run exactly as you see fit.  It takes the best of both of us to build what we have.  Key word; Best.  Not worst.  And that’s what Jindal is suggesting.  He wants to take one of the two worst aspects of Obamacare, roll it in some Jindal speak and sell it as a better package.  It ain’t.

Require coverage of preexisting conditions: Insurance should not be least accessible when it is needed most. Companies should be incentivized to focus on delivering high-quality effective care, not to avoid covering the sick.

You can not guarantee coverage disregarding preexisting conditions.  Because if the government does that, the government  HAS to make it affordable.  And if you do THAT, you break the system and you have a plan no better than Medicare/Medicaid.  Broke and getting broker.  By the day.

According to their own auditors, Medicare knowingly overpays for almost everything it buys.

Jindal is right in a lot, but wrong where it counts.

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Posted in Health Care, Politics: National

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The Price of Free Health Care

Posted on October 2, 2009 | Leave a comment

See, that’s not fair.  Everyone knows there’s no such thing as free health care.  Heck, we know there isn’t free anything.  So, what has to happen for health care to be made available to every citizen in America?  Well, it has to be paid for.  And who would pay for it?  Well, we would simply raise taxes to cover the costs.  And could we do this?  Yes, almost for sure.  To be equally sure, we would have to raise the taxes so high that even Democrats would puke.  So instead we’ll raise them just some.  And what does this get us?  A system in debt.

We have all heard that America is ranked something like 37th in the world [based on the metrics used to determine this, I think that we are really ranked #1, but why quibble].  The club that we are beaten with is “If we spend all this money on health care, why do we only get a return that ranks us 37th?  The other club, my second favorite, is “We are the only industrial nation that doesn’t have some form of universal health care.”

Let’s look at the cost those other nations have to pay.  I like GDP PPP [that is purchasing power parity].  Basically, this is a measure of the “quality of economic life” in a given country or State.  Using this measure you can compare the purchasing power of people living in North Carolina and Minnesota for example.  Of of people living in Sweden and Germany.

So, these nations that are providing medical care to all of their citizens–how do they rank in GDP PPP?  Poorly.  Very poorly.  In fact, according to one study, if you took the nations of Spain, Portugal and Greece and granted them statehood in the United States, they would immediately become the 1st, 2nd and 3rd poorest states in the Union.

Italy, Finland, Denmark, France and the UK?  Make them states instead?  They would become the 5th, 6th, 7th, 8th and 9th poorest States in America.  In fact, you could take the whole of the European Union and make it a State.  It would be the 5th poorest State right behind Arkansas and Montana.

Why?

When we turn to consider the impact of economic policy on growth, it is hard not to
notice that one particular factor above all is essentially different in large parts of Europe
compared with the USA, namely the expansion of the political sphere in general and
taxes and the size of the public sector in particular.

Taxes.

So, if we simply worked at letting medical care exist like any other commodity, we would find that America would:

  1. Have more money than any other nation to spend on health care.
  2. See the real cost of that care go down.

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Posted in Economy, Health Care, Politics: North Carolina

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Where Brad and Britt Are Wrong

Posted on September 22, 2009 | 1 comment

I’ve been listening to the Brad and Britt show for some years now.  I know what I am getting when I turn ’em on.  I’m getting a couple of guys who think they’re center or neutral, think they’re not talking over folks and think they’re right.  What I get though, are some left leaning talk over guys who think they’re right.  Mostly you can only blame ’em for being leftists.  Everyone thinks they’re right and really, it’s a talk show on the radio; they are supposed to be a little bit “jabby”.  So, I know what I’m getting when I turn ’em on.

This morning though, I just went crazy.  They are talking about health care reform and the proposed system and how it’s being compared to auto insurance etc etc.  And so it starts.

Brad begins by trying to pull the analogy by saying that if you only consider folks who do drive cars, then the auto insurance parallel is accurate; we do mandate that all drivers carry car insurance.  In this he’s right.  But he fails to mention that there are three important distinctions:

  1. If the cost of owning a car becomes to great [payments, insurance and upkeep] you can opt out and the insurance stops.
  2. Really, we are only mandating that you carry insurance to cover THE OTHER GUY.  If you own the car, it is your choice to cover any damage to your actual car itself.  In short, you are allowed the choice to “self insure”.
  3. No one is saying that the car insurance folks would be forced to cover “pre-existing conditions.”

I mean really, enough with this car insurance parallel.  Serious, can you imagine how expensive car insurance would be if insurance companies were forced to cover pre-existing conditions on a car?  That they would, for example, be forced to fix a car AFTER it had been in an accident?  Silly.  SImply silly.

But there was more.  The Brad and Britt show had a guest on who claimed that as a 52-year-old man he could get very nice insurance individually that was not outrageously priced.  Let’s check.  When I do this, I like to go here: eHealthInsurance

I am looking for plans in Greensboro for a single 52-year-old man who does not smoke.

Ah, here’s one.  $5000 deductible, Office visits are free after the deductible.  0% coinsurance.  149 a month.  Oh yeah, and you can have an HSA.

Another:  $5000 deductible, $15 office visits and 0% coinsurance.  $229 a month.

One more:  $1250 deductible, office visits are not covered and the coinsurance is 20%.  $253 a month.

Net/net, I don’t know why people think that coverage isn’t affordable.  It is.  It may not be free.  It may not cover every single thing in the whole medical world.  But the whole argument for this reform bill is that “if you get sick or hurt you should not go bankrupt.”  Here ya go.  Buy this policy and you won’t.

Last, Brad and Britt spoke about the fact that people miss allocate their money.  In other words, they aren’t spending wisely.  This resonates with me; I don’t think people budget well.  We spoke about this in a post just a few days ago:  Health Care Lottery.

In short, of people who make less than 10k a year, 46% of them play the lottery.  And they play about $600 a year.  Which, by the way, is the cost of a health insurance plan for a 25-year-old man.

I know what I get when I tune in Brad and Britt.  Today was just too much of it.

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Posted in Health Care, Politics: North Carolina

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Robber Barons!

Posted on September 17, 2009 | Leave a comment

Those drug companies that we love to hate!  How dare they, how DARE they make money on our misfortunes!?!  Seems they ain’t so bad after all.

The Bridges to Access program will provide free drugs to single people with household income of less than $27,075; $36,425 for couples; and $55,125 for a family of four.

Last year, GSK gave away drugs worth about $438 million to nearly 415,000 patients through various assistance programs.

Just goes to show, when left to it’s own devices, the market works.

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Posted in Health Care, Politics: North Carolina

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The Health Care Lottery

Posted on September 10, 2009 | 1 comment

Much debate has been made about the uninsured in America.  I have tried and tried and tried to make the point in my personal conversations that you can not claim you can’t afford thing “A” when you voluntarily spend the money that could purchase thing “A” and instead buy thing “B”.  That is to say, if I have enough money to book, but instead purchase a DVD, I can not claim to be unable to buy the book.  I simply decided to prioritize the DVD higher than the book.

The same is true of health insurance.  If I have money to purchase health insurance but instead choose to buy thing “B”, I can not claim to be unable to afford health insurance.  I just decided not to buy it.  Now, I understand that there are things in life that seem to qualify as “must have”.  Shelter, food and clothing to name a few.  People even claim that an internet connection and phone service can qualify as required services.  So I tried to find an item that in no way could be classified as “required”.  I came up with lottery tickets.

Now, looking at uninsured data found at Carpe Diem, there seem to be three rough categories of people:

uninsured by income

  1. Those that make less than $25,000 a year
  2. Those that make from $25,000 to $50,000 a year
  3. Those that make more than $50,000 a year

Those three breakdowns seem to describe the uninsured equally.  About 30% of the uninsured population are in each category.   Let’s see if my theory holds true for the lower income population.

Using data reported by 4 Professors at Duke University, we are able to see lottery participation rates as well as annual per capita amounts.

Lottery Play by Demographic

What it shows is remarkable.  Combining the players making less than $25,000 per year we see that just about HALF of the population plays the lottery.  Further, those people who play are spending near $600 a year!  This means that these players have near $600 of annual disposable income that they are choosing to spend on the lottery.  By going here, I can find a policy that covers a single 25-year-old man for $52 a month.  Or, $612 a year – almost exactly what is being played on the lottery.

Given that a group of people have disposable income of near $600 and that an insurance policy costs nearly $600, can you realistically say that those folks are unable to afford health insurance?

Me either.

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Posted in Health Care

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Aha….Why Cost of Insurance is so High in Maine

Posted on August 25, 2009 | Leave a comment

Alright, so we have been discussing health care, health insurance and everything wrong with all of that.  As always, the Democrats cry out “We need this.  We just NEED this damn it!  And then they walk away to their voting place and vote for someone who wants to be in power, which is different than someone wanting to be a Senator, and presto, we have a voice in Washington that is going to legislate this health care for everyone thing.  On the other side, you have republicans, seriously going about the days business when they hear this nonsense and look up from their work and say “No”.  In much the same way a father says “no” to the 7th request for another cookie before bed.

And so, republicans are labeled as the party of “No”.  But this time around, the republicans have offered some solutions to bring the price of health care down.  Down for everyone.  Down to the point that every single person in the country can have insurance.  And one of the methods in doing that is to free insurance companies to sell policies to people outside of the state the reside in.  That is, as a citizen of North Carolina, I could purchase health insurance from a company in Washington state.  Or Arizona.  Or anywhere for that matter.  What THIS would do is free the consumer to choose and not be subject to the regulations placed upon the insurance providers in that state.  But even this causes Liberals to scream.

For example, a recent study found that Maine ranks 6th in the nation when it comes to expensive individual policies.  Sixth.  And folks around the lefty campfire are saying that the reason for the high prices is due to the monopoly that exists in Maine.  They claim that because Wellpoint has a 90%+ customer saturation base, they are able to charge whatever they want.  The problem is, those liberals are reporting only on the results, not the cause of the problem.

See, it turns out that in 1993 Maine passed laws requiring coverage to every citizen.

Blink.  Blink.

But that’s not bad enough.  Not only are they required to sell insurance to everyone that applies, they are also unable to distinguish based on gender, health status, claims experience or time with coverage.

Now, after that law passed, what do you supposed happened to the price?  Yeah, right through the roof.  And it drove out all but a few providers that specialized in mandatory care and THEY, in turn, bought up the remaining companies.  Net/net:  Noe one wants to do business in Maine and THAT’S why there is only one provider.

Damn.

Next thing these liberals are going to mandate is that all kids make the varsity.

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Posted in Economy, Health Care, Politics: North Carolina

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What Happens When Government Restricts Competition

Posted on August 25, 2009 | Leave a comment

Do you know what happens when the government restricts competition?  Yeah, um, you get less competition.  Weird that works out that way.  But some people actually think that when the government restricts competition and you get less competition, that the only answer is to have government compete.  Huh?  Confused?  Me too.

But this is real life and this is what we get:

“There is a serious problem with the lack of competition among insurers,” said Republican Sen. Olympia Snowe of Maine, one of the highest-cost states. “The impact on the consumer is significant.”

Wellpoint Inc. accounted for 71 percent of the Maine market, while runner-up Aetna had a 12 percent share, according to a 2008 report by the American Medical Association.

So, lemme get this straight.  Wellpoint has the market i Maine to the point that it can charge almost anything it wants and the REST of the insurance world stays out of Maine because?  Because…..?  They don’t wanna make money?  I have to believe there is another reason Wellpoint is the only player in Maine.

I’ll betcha a candy bar.

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Posted in Health Care

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You Know They Are Desperate When

Posted on August 12, 2009 | Leave a comment

Check this post out over at alan.com.  In it, a commenter is responding to Alan’s post that a woman on Medicare is opposing Obamacare, or Universal Health Care.

In the post, Alan is quoting an article in The Washington Monthly, which in turn is speaking about an article in the Wall Street Journal.  In that article is a story of a woman whose mother is on Medicare and whose sister is also on Medicare.  The family is attending Town Hall meetings to express their opinion on Medicare.  Alan and Co are just shocked, SHOCKED, I tell you that someone on the government dime would protest anything the government suggested.

The reporter from the Washington Monthly saeth thusly:

Government-run, taxpayer-financed health care has kept her mother alive. Government-run, taxpayer-financed health care provides treatment and care to her sister. Based on the descriptions, it’s safe to assume the costs associated with treatments for Campbell’s mother and sister are enormous, but taxpayers and a socialized health care system pick up the tab. What’s wrong with that? Not a thing.

Except, of course, that Diane Campbell is now trying to convince people that health care reform is both radical and dangerous.

So, once a person is on government assistance, they are no longer able to, or at least shouldn’t, offer objection to further plans made by the government.  “Shut up citizen, listen and obey” is the message here.  There may be a whole host of reasons that these women don’t want this program pushed through.  Lord knows there are enough of those reason to fill a book.  But we couldn’t be bothered with those details.

But it gets even better.  See, Alan and The Washington Monthly go even further and bring up images of Hitler and Nazi Germany.

No offense to Diane Campbell, who must be suffering greatly.  But she has bought the right-wing meme that Obama is akin to Hitler and that health care reform will liken America to Nazi Germany.

So, now, not only is the Left offended that a sick grandmother would object to Obamacare, they bring up Hitler and the Nazi’s.

But the best is saved for last.  In the comments, in fact, the first one, we have a reader who claims that this woman MUST be a racist.

The only conclusion I can reach here is she’s a racist.

Awesome.  The bad news is that we have to continue to manage our way through this kind of nonsense.  The good news, when the Left resorts to this, you know we have won the hearts and minds.

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Posted in Health Care

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