Healthcare Myths

You might want to take a look at this post on myths about our healthcare system. It succeeds in goring just about anybody’s ox. Here are the “myths” he lists:

  • Healthcare prices have soared in the recent past

    Despite the hand-waving he engages in he’s right about this. Healthcare spending is soaring. Healthcare prices soared in the 1970s. Now they’re generally rising at the rate of inflation which is hardly an endorsement.

    This may sound contradictory but it’s not. In a fee for service system which is what we have spending isn’t determined just by prices but by the number of procedures performed as well. More procedures, more spending.

  • The pre-ObamaCare system was ‘insurance’

    He’s right about this one, too. The system we had and the system we have is a prepaid, subsidized maintenance program. No such plan is sustainable in the absence of a ceiling on spending whether it’s for a typewriter, a computer, a car, or anything else.

  • Stopping insurance companies from charging based on pre-existing conditions is the one good part of ObamaCare

    Essentially, it throws the fiction that what we have is an insurance plan overboard.

  • Healthcare costs are very high in the United States compared to socialized countries

    He does an enormous amount of hand-waving here and I think he’s wrong on this one. Healthcare here is more expensive than practically anywhere else in the world and by a significant margin. In Switzerland (the country with the next highest level of per capita spending) median PPP wages are higher than they are here and they still spend signficantly less. IMO the features of the ACA intended to control costs are mostly just wishful thinking.

Worth a glance.

13 comments… add one
  • steve Link

    Even if you dont know much about health care, if you are bright it is difficult to write a piece and be completely wrong. Health care spending has slowed, but IIRC the latest numbers, we are still ahead of inflation.

    His point about insurance is typical for someone who does not know how health care dollars are spent. He is thinking about the relatively small amounts spent routine doc visits. The big spending is in chronic disease and procedures. Large expenditures. Some of us can afford a CABG, spinal fusion or chemotherapy out of savings. Most cannot. That is why we have insurance. His point about pre-existing conditions is essentially correct. However, what that means is that anyone who gets sick will no longer be able to afford insurance, or care. Do we all want to agree that if you get sick in this country you are out of luck? Just go die?

    Medicare pays about what insurers in other OECD countries pay. I have a nice chart showing this archived somewhere, but am too tired to go looking. Our costs really are higher. Utilization is also, generally, high, but not always. There are a number of countries that are higher in utilization for given procedures/tests.

    Steve

  • TastyBits Link

    @steve

    … Just go die?

    I am not being flip, but has anyone done a cost comparison of early vs late death? Someone who dies earlier does not require any more healthcare (or SS). I realize that it would be a “cold” calculation, but it would let us know if pushing people towards a healthy life is costing more than we think.

    Again, I am serious, but if I am right, I will …

  • jan Link

    Do we all want to agree that if you get sick in this country you are out of luck? Just go die?

    For the most part people are not turned away from health care who are in dire need. Just look at the traffic in ER’s.

    Regarding pre-existing conditions, these should be tempered in their definition and scope, as interpreted by insurance companies. Such medical conditions, seem to be widening into the absurd, often including a person just asking questions about a procedure, which is then deduced as a ‘condition’ looming in that person, giving rise for a pre-existing condition excuse resulting in a denial of coverage, should that person be looking for a new carrier.

    However, much like auto insurance, which has high risk pools, I think there is a place for that in health insurance coverage, for those with high risk chronic ailments and/or lifestyles/habits.

  • Sam Link

    huh. The life expectancy part is shocking. 19th to first! I have a problem with his “death panel” argument. There’s no reason in my mind that in a country where private citizens are still allowed to pay for their own end of life care that the PUBLIC system should not have ACTUAL death panels.

  • steve Link

    @TastyBits- Yes they have for some diseases/conditions. For example, a number of studies show that smokers cost less in the long run because they die earlier. There is also literature showing that some preventive care can cost us more in the long run as we discover more to treat. These are usually done just looking at medical care costs.

    @jan- People do not get turned away because we have a law against it, but just so you know, it really does still happen, just not very frequently. One of the things private insurers are very good at is figuring out who will cost them money. They get rid of those people when they can. Most people work for big companies, so it is less of an issue than it could be, but it does, IMO, make it less likely people will change jobs or go out on their own to start new work.

    Steve

  • One of the things private insurers are very good at is figuring out who will cost them money. They get rid of those people when they can.

    Please document insurer spending on adverse selection. IMO this is very much exaggerated. Note that as you say more than half of all of those with employer-subsidized healthcare insurance are in plans that self-insure and, consequently, adverse selection is not a factor. My firsthand experience of insurance companies is greater tendency to bend over backwards to cover people than cancelling people as soon as they got the chance.

  • sam Link

    Is this what we’re talking about?

    Blue Cross praised employees who dropped sick policyholders, lawmaker says

    Executives of three of the nation’s largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive.

    The hearing on the controversial action known as rescission, which has left thousands of Americans burdened with costly medical bills despite paying insurance premiums, began a day after President Obama outlined his proposals for revamping the nation’s healthcare system.

    An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period.

    It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.

    “No one can defend, and I certainly cannot defend, the practice of canceling coverage after the fact,” said Rep. Michael C. Burgess (R-Tex.), a member of the committee. “There is no acceptable minimum to denying coverage after the fact.”

    The executives — Richard A. Collins, chief executive of UnitedHealth’s Golden Rule Insurance Co.; Don Hamm, chief executive of Assurant Health and Brian Sassi, president of consumer business for WellPoint Inc., parent of Blue Cross of California — were courteous and matter-of-fact in their testimony.
    But they would not commit to limiting rescissions to only policyholders who intentionally lie or commit fraud to obtain coverage, a refusal that met with dismay from legislators on both sides of the political aisle.

  • TastyBits Link

    @sam

    The linked article is deceptive. Fraud was the context of the executives remarks, and I suspect it was the context of the employee accolades. On the other hand, I doubt the executives were just bumbling but good intentioned.

    “Find the hustle, and follow the money.”
    – TastyBits

  • sam Link

    Really?

    See the linked articles to the left of the one cited (in the From the Archives section) titled, “Scrutiny of Sick Patients Is Detailed” and “Blue Cross Moves to Quell Furor”

  • jan Link

    ” One of the things private insurers are very good at is figuring out who will cost them money. They get rid of those people when they can. Most people work for big companies, so it is less of an issue than it could be, but it does, IMO, make it less likely people will change jobs or go out on their own to start new work.”

    @ steve

    I tend to agree with you about insurance companies trying to separate the sickly chaff from the healthier wheat, in insuring the public. It’s very subtle, though.

    Also, I think it would be more versatile if people could take their health insurance with them when they change jobs. I must admit to not being able to spit out a manner in which this could be done. However, I have heard republicans talk about such a policy, whereas people would not be stuck in their jobs solely for reasons of keeping their health insurance intact.

  • steve Link

    @jan- I think portability is a great idea. IIRC, Wyden-Bennett offered such a plan.

    @Dave- Will try to find those papers for you when I get home. IIRC, insurance companies enter people into groups when they sign up. As time goes by, healthier patients usually get jobs and go to group plans or may find a cheaper plan. The group will eventually consist of those who have been there the longest because they are too sick to change. The insurance company then massively increases premiums trying to get everyone in that group to leave. There are also rescissions.

    My firsthand experience as someone who bills insurance companies is mixed. They are sometimes exceedingly generous and cover people I never thought should be covered. Other times they have dropped people for pretty specious reasons, though I am usually getting just the patient side.

    Steve

  • TastyBits Link

    @sam
    The linked articles are three years older than your link, and yours is three years old. The article consists of direct quotes with no original context. The context provided is a mish-mash of counter quotes, random “facts”, summary, and supposition. For all I know, he could have been explaining what he would not do.

    CEO’s are not that stupid. Dave Schuler’s father considered CEO’s to be salesmen. I agree, but I consider many salesmen to be hustlers. As such, they are not going to say anything that direct. They are either silent or speak gibberish, but either way, they say nothing.

    Jacking up the rates to encourage people to leave sounds more like it.

  • sam Link

    So say you. The articles are. Others can read them and determine for themselves if your reading is accurate.

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