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Health Insurance: Too Expensive
Interesting article about health care costs in the US
The average cost of a family insurance plan that Americans get through their jobs has risen another 7.7 percent this year, to $11,500, according to the Kaiser Family Foundation. In only seven years, the cost has doubled, while incomes and company revenue, which pay for health insurance, haven’t risen nearly as much.
Thoughts on how to do something about this growing problem?
41 Responses to “Health Insurance: Too Expensive”
wait 17 years until the patents on a lot of perscription meds expire to let cheaper generics in?
on a slightly more serious note, there are a couple of studies out there supporting the idea that a lack of preventative care ends up putting a huge burden on the entier system when things go expensively wrong. Perhaps universal heath care might actually be able to catch more of these early problems and save us money in the long run.
Kevin, I agree that in some way making preventative care more accessible would go a long way.
My employer actually implemented a program last year where everyone who exercises 3 times a day throughout the year, gets a yearly physical, and meets certain health requirements (weight, blood pressure, cholesterol, etc.) gets a $250 bonus at the end of the year. The company estimated that it saved over $1000/participating employee last year and caught several cases of cancer, diabetes, and other health problems in early stages when they are much less expensive to treat and treatments are much more effective. The long term savings are expected to exceed this $1000/participating employee because of catching cases like that.
This is just one example of how preventative care can save money and this is with people who have a very good medical plan. With uninsured people waiting for problems to get severe (and more costly), then going to the ER, which is the most costly form of initial treatment one can get, the cost per person in these cases skyrockets.
I don’t know if universal health care is the plan, maybe it is and maybe it isn’t, but something to encourage preventative medicine is crucial. Also as crucial would be encouraging healthy habits. I can’t recall the numbers but I recently saw an article on how much lifestyle decisions – primarily smoking, lack of exercise, and unhealthy diets – are costing us in medical care each year and the numbers were staggering.
Haha Michael between the health care thread a week or so ago and the education one a few days ago you really know how to keep the debate riled up.
Mikkel, I am doing my best. I don’t know about you, but I really notice how good ideas come out of the threads now and then.
Just re-read my post. Exercise 3 times a day??? OK, I’ve done that on occasion but actually the requirement is to exercise 3 times a week.
Cutting back on illegal immigration would be a boon to many hospitals that must pass the cost of non-paying immigrants to American citizens.
I think we need to reduce the amount of time and schooling required to train doctors who do general practice, or, in lieu of that, create a seperate type of practice to go to (a two year nursing sort of thing would be a strart) for most of the common complaints. This would reduce the costs, and through the less rigorous schooling, increase the pool of people that can do some medicine.
The next thing is to look at defensive medicine. Try to figure out what tests are most cost effective, and standardize practice wereever possible. This would create a standard of care that people can look at and not complain about, since its applies equally. I don;t like constraining things, but if cost is an issue, that’s one more place to simultaneously cut costs on liability and actual performance.
The next things is to stick everyone into the insurance pot. Young people like me don’t technically need insurance, however, when we stay out of the big pot, we increase the costs for the people who do need it.
Is this a tax? Yeah, basically, but libertarian theory is based on the idea that we make rational choices. However, when it comes to medicine, there are no rational choices, we either over or underestimate what we need quite dramatically. Therefore, we have to take it out of the hands of consumers to some extent. Standard care for everyone, and if you want more, then pay for it on your own.
Michael — speaking of good ideas arising from threads — perhaps you should start one asking people to give suggestions about how to catalogue those good ideas so they don’t get destroyed by the ravages of time (or more accurately destroyed by merely being bumped off the front page so no one reads them anymore).
“I think we need to reduce the amount of time and schooling required to train doctors who do general practice…”
I don’t want to see the bar lowered on getting a medical degree. Besides, is the pool of doctors that low? Nursing is where the shortages are going to be seen first and you can get a LPN in two years.
Part of the cost issue is each state controls their own requirements for nursing, making it more expensive to track each states system and educate your students accordingly. So I do support a Federal standard.
Like Ryan’s company, mine also encourages its employees to get regular check-ups and to exercise. We don’t have the bonus part of the program, but it is still a good program and saves money long term.
The problem with the idea of having someone of lesser training being the only contact point for “common complaints” is that sometimes those common complaints are in fact symptoms of a more serious problem. There needs to be someone with enough training who can hopefully discern when this is the case.
I still think doc’s get way too much training. For example, an engineer with four years of training get’s to design an incredibly complex piece of machinary that can kill thousands of people if his knowledge is insufficient. People plan these things as worse case scenarios. Step one to cost cutting: Larger number of workers, who are less restricted in qualification.
But, I digress pointing out this one detail with training. The main thrust should be to ask why we expect a Cadillac program of health care, and then wonder why the prices are so high?
I’m actually a fan of national healthcare in order to distribute costs as I pointed above, but that also means I’m a fan of asking how much life-expectancy am I expecting to add by providing a service, divided by the expected cost. This means that great feets of medical care should be performed on the young, but less so on the old. Which, I should point out, is what the majority of health car expenditure is toward.
I don’t think there is a lot of free time to cut from most medical programs. Would you rather them not learn about most of the diseases? or just not let them have any hands-on experience? Seems like either way your gonna end up with some dead bodies.
And the refrence to being an engineer. they design machines with maybe a thousand moving parts. A human body has something like 10-100 TRILLION cells; there are tens of thousands of different pathogenicities which do not present consistent symptoms. The engineer gets to test out a prototype, and redesign if he makes any mistakes. Every mistake a doctor makes has the chance to kill someone.
Not to minimize the skills needed by an engineer but medicine is much more complex. Engineering needs physics, materials science and mathematics. Toss in chemistry for a chemical engineer. Probably one or more things that I’m missing should be in there. A doctor? Mathematics, chemistry, physics, biology, molecular biology and how they all interact in a body that has multiple interacting systems (muscular, skeletal, neurological, vascular) and the chemicals and other biological entities that can invade.
While we do need as much as possible to be done by nurses and medical assistants there are definite limits.
OK, I’ll let the doctor thing go for the moment. I can also see from this that people aren’t going to like nurse’s being able to write scripts (although some forms do, I’m not sure how that varies by state, however), or do much diagnosing. Still, there must be a way for a given doctor to process more patients more economically. Perhaps we need more training programs instead, so that we have a baseline minimum ability thereby putting more people through, instead of a harshly competitive program with high rejection rates (I was surprised to see two year nursing programs were competitive to get into. This seems counter intuitive when people complain about shortages).
I feel a bit silly for including this part, but since the title of the topic immediately jumped to the wording “Too Expensive”, I got caught up without asking the serious question, “Is it too expensive given how much value people place on their lives?” One piece in a health journal threw out a number of seven million. Given that’s people’s estimate of their worth, health care seems like a bargain (although people may differ on the value of other people’s lives).
I mean this all seriously. The system probably has corners to be cut, and efficiencies to be gained, but the costs should break down to this:
Salaries
Drug Costs
Normal Overhead (ie rent, basic supplies, etc)
Medically related overhead (equipment, basic tests)
Administrative
Admin and normal overhead are probably relatively small, so there may not be much more to do there than save a couple percent. Salaries won’t change, which is the part I thought was cuttable through removing scarcity. Drug Costs won’t change unless the gov’t changes policies (I’d also be for national research, btw, so this has some chances for money savings on the important stuff like disease treatments), which doesn’t mesh well with our ideas of patents and such. Our chem lab here uses some catalogs that also supply nedical places, and I’m already familiar with instrumentation type expense, so this is a big expense, and it’s not like there are twenty people, so again, Cadillac Item, price isn’t going to go down.
Basically, I don’t see anyway to cut costs substancially without a cut in quality. Given the premium people place on their lives, I don;t think this will happen. Therefore, I think eventually, the insurance companies and medicare will start to increase the amount of things they don’t cover, and we’ll still end up two tiered.
This topic came up in an earlier thread concerning health care. Taking the position favoring personal responsibility I abhor the thought of national health care. When you transfer the responsibility from the individual to the government you lose an enormous amount of freedom.
bellisauris said:
I’m actually a fan of national healthcare in order to distribute costs as I pointed above, but that also means I’m a fan of asking how much life-expectancy am I expecting to add by providing a service, divided by the expected cost. This means that great fetes of medical care should be performed on the young, but less so on the old. Which, I should point out, is what the majority of health car expenditure is toward
Bellisaurius is correct when it comes to the inordinate amount of money spent to prolong life. This is one of the reasons why health care has become so expensive. People are living far longer as a result of medical breakthroughs. But this is not limited to the elderly
. The fact is medical care today is far more advanced than even 10 years ago. Had my own father lived another decade he would likely not have died at age 61 ? Despite the negative picture often painted, care today is better for the poor than it was for the rich not too long ago.
The kind of health care rationing mentioned by bellisaurius is common in countries which
have national a national plan . You might argue that it need not be so . But at what price ? Now the path away from personal responsibility to government intervention will not be limited to issues of health care rationing. In order to maintain the viability of national health care the government would have every right to improve the health of its citizens through other measures.
Already fast food and processed snacks are under attack. Imagine if they were rationed or eliminated entirely? No more donuts PERIOD. Do you like red meat? Well, for your own good we will limit that to once per week…or maybe once per month! After all, we can’t have Americans undergoing expensive medical procedures. Think it can’t happen? Think again. Remember, it’s the governments responsibility to keep you healthy.
I would prefer to have the right to maintain my own health and the health of my loved ones as I see fit. Maintaining a strict exercise program and sacrificing gives me the right to the benefits of my lifestyle. But if I exercise and do al the right things I should not be forced to pay the cost of a double by pass for someone who eats chitos all day long while watching television. Most people kill themselves slowly by not exercising and refusing to PUSH THE PLATE AWAY.
So what would be the results if a government health care plan were enacted WITHOUT the massive intervention I outline. The answer is that the costs would skyrocket while the fitness level of the citizens would fall dramatically.
Remember, if you tax something you will get less of it. Subsidize something and you get more of it. The poor attending a free clinic or the emergency room with no intention of paying for it have no consideration of cost. Expect the same trend if you eliminate cost consideration across the board resulting in longer waits in emergency rooms and doctors offices. Doctor services will rise as a result increased demand. Cue the call for more government intervention into the market place to cure the problem .
Now the only advantage to working out and eating well is being more fit. While that is reward enough for some people, others will feel less pressure to take proper care of themselves. The end result will be a lowering in the quality of health in the general population
So I am opposed to national health care for a host of reasons. But most important is the issue of personal freedom. We have more control over this than most aspects of our lives. If you don’t brush your teeth they will fall out of your head a hell of a lot earlier than if you do. Obviously there are exceptions. But for the vast majority of people, it’s a choice .
Back to the cost of medicine and insurance in this country. I think part of it is simply because a public corporation in this country is expected to have a level of profit and rate of growth that is so high that when you put layer on top of layer of that demand for profit in a system that will be labor intensive at several levels you have constant high increases in prices. The hospital chains need high profits, the drug companies need high profits and the insurance companies need high profits. The nature of some things is that there just isn’t any real economy of scale or way to cut back on expenses that doesn’t actually have a negative impact on the customer, in this case the patient. Where do you cut? Cut the number of nurses? Cut their pay? The constant cuts in what Medicaid and Medicare are willing to pay doctors in order to fund tax cuts and pharmaceutical companies have only resulted in patients having a hard time finding doctors.
Addendum to my above post, apparently Hrugman points out that:
“It is well worth pointing out, as Paul Krugman recently did in his New York Times column, that private insurers like Aetna pay 80 cents of every dollar for health care while the rest goes for overhead including executive salaries and the lobbying efforts in Congress. Medicare on the other hand pays 98 percent of what it collects for health care — an overhead of only 2 percent.”
From http://www.msnbc.msn.com/id/12703029/
So, possibly a 20% saving off the top by not going through insurance, but gov’t instead. That’s substancial enough to note. Although I would point out I didn’t see the original article.
MichaelF, i think you horribly underestimate how much we spend, and overestimate the quality of care in this country. We spend more then any other nation on health care, but our infant mortality and life expectancy rates do not match that level of spending. We should have a first class health care system, but we dont.
As bellisaurius points out in his last post, we are talking about a 20% increase in medical spending efficiency simply by going from private to public insurance. Furthermore, less needs to be paid in benefits as health providers administrative costs decline as they do not need to navigate the maze of private insurance payment.
Quality of treatment incereases as managed care plans no longer get in the way of appropriate treatment. Preventative care, which is by far the most cost effective way to maintain health, becomes easier and more attractive to many americans, particularly the uninsured because it is 0 out of pocket cost (its already been paid).
As for rationing, there are 2 primary considerations. First, rationing does occur in the current system. The poor suffer. Second, expensive procedures would decrease because there would be no barrier for the poor to get proper preventative medicine.
And finally, your assessment that eating healthy and working out will somehow reduce americans health standard is insane. Your saying the sick are really better off because they know they are sick, while the healthy are worse off because they may actually be sick, and not know it. Do you actually believe that????
Your argument is thinly vieled 19th century social darwinism. The poor, those least able to afford health care, deserve to suffer because they were dumb enough to be poor. Well in this case its really the 40+ million americans who are uninsured. Then again, its also those americans who are underinsured. And then there are those Americans in managed plans who will have nescessary treatment denied or delayed for beuraucratic reasons.
People on MichaelF’s end of the political spectrum constantly speak of how the government might limit us if they are further involved in health care. What freedom do we have now? Most people don’t choose a darn thing about their health care, the insurance company does and their employer chooses the insurer, they don’t. When my company switched insurance companies earlier this year the pharmacy I’ve been using for years wasn’t on their plan. My doctor was on their plan but the hospital he practices at which is the closest to my home wasn’t. What a pain!
MichaelF says “Remember, if you tax something you will get less of it. Subsidize something and you get more of it. The poor attending a free clinic or the emergency room with no intention of paying for it have no consideration of cost.”. Once again a conservative applies simplistic economic theory to something that has other complicating factors. People don’t just say “Hey, I’ll miss work and go to the clinic.” or “You know, I’m tired after a full day at work but I’ll skip this time with my family and go down to the clinic.”. The real world intervenes. While there might be some who do what MichaelF says, they aren’t as common as he would have you believe. He also condemns rationing medical care while apparently refusing to recognize that we do it too, just in a different way.
Anon said :
And finally, your assessment that eating healthy and working out will somehow reduce americans health standard is insane.
That certainly would be insane HAD I SAID IT! However, I was clearly making the opposite point. How that was lost on you is beyond me . Let me refrsh your memory .
I said :
would prefer to have the right to maintain my own health and the health of my loved ones as I see fit. Maintaining a strict exercise program and sacrificing gives me the right to the benefits of my lifestyle. But if I exercise and do al the right things I should not be forced to pay the cost of a double by pass for someone who eats chitos all day long while watching television. Most people kill themselves slowly by not exercising and refusing to PUSH THE PLATE AWAY.
Then you made this equaly even more bizarre remarkremark .
Anon said :
Your saying the sick are really better off because they know they are sick, while the healthy are worse off because they may actually be sick, and not know it. Do you actually believe that????
Not only did I not say that but I never even referenced it. You need to read the comments more closely.
Did anyone make such a statement? I just read this whole thing again and saw nowhere that anyone said that hte sick are better off because they know they are sick and the healthy are worse off because they may actually be sick.
The only thing that I thought could be misinterpreted that way was my statement that preventative medicine, such as yearly physicals, can find problems before they become serious and very expensive issues. However, this is nowhere near what you stated. Does anyone disagree that finding cancer in its early stages through preventative medicine leads to less costly and much more effective treatment than finding it only once severe symptoms that prompt someone to go to the ER are present?
“Now the only advantage to working out and eating well is being more fit.”
Being “healthy”.
“While that is reward enough for some people, others will feel less pressure to take proper care of themselves.”
Being “sick” in my post.
” The end result will be a lowering in the quality of health in the general population”
And this is where in my opinion you went into bizzaro land.
Anon said :
Your argument is thinly vieled 19th century social darwinism. The poor, those least able to afford health care, deserve to suffer because they were dumb enough to be poor.
Once again you draw a completely erroneous conclusion. As I clearly state the poor don’t pay for their own health care. Also, Americans are facing a health crisis which is not limited to any one class. Obesity and the health associated risks such as diabetes, heart disease, strokes, and cancer are not issues limited to the poor. In fact, many poor folks around the globe eat quite well and exercise daily. Travel to China where bicycles are still a standard means of transpiration and you will see what I mean.
So the only one here with a veiled argument is you Anon. I say what I mean and mean what I say. Try to debate without claiming to read what others think or feel
Rereading your post again, I think its a matter of me reading the statement in a way contrary to what you intended it to mean.
“Cue the call for more government intervention into the market place to cure the problem.”
Seems to be what gets me off the wrong track. “Government intervention to cure the problem” for me is along the lines of a public health campaign to increase fitness and health as well as possibly various rules and ordinances to steer people to healthy eating (nutrition labels). This is a commonliberal approach.
When you say that the only reward is being more fit, well that seems to me like your saying its cosmetic. The reason is most people who change their diet and exercise benefit in terms of health, sense of well being, happiness and social standing. So there are a lot of rewards to being fit. The next sentence, you go on to say that most people will take less care of themselves because they are now “fit”. I dont think this is what you mean now, but if you look at your paragraph construction, your sentence . I applied the second sentence to the first, not to the argument advanced in other paragraphs.
I dont have any real interest in starting an argument about what constitutes proper paragraph construction, so Ill just assume you were applying that comment to “free” health care, and appollogize for misreading your statement.
Jim S . Your argument doesn’t hold water for one simple reason. We are discussing the sudden rise in affordability of health care. The factors you list regarding the nature of the market existed prior to the current spike in cost.
Jim S :
People on MichaelF’s end of the political spectrum constantly speak of how the government might limit us if they are further involved in health care. What freedom do we have now? Most people don’t choose a darn thing about their health care, the insurance company does and their employer chooses the insurer, they don’t. When my company switched insurance companies earlier this year the pharmacy I’ve been using for years wasn’t on their plan. My doctor was on their plan but the hospital he practices at which is the closest to my home wasn’t. What a pain!
The medical plan is part of your compensation. When you chose the job that should have been part of your consideration. I have had a myriad of different plans through the years. I chose the plan that worked best for my situation. After we had our first child my wife developed cancer. The insurance plan was fantastic. However, when she developed fertility issues and wanted another baby I switched plans . Simple .
“Once again you draw a completely erroneous conclusion. As I clearly state the poor don’t pay for their own health care.”
Then you are utterly out of touch with reality. Most people, if they go to see a doctor, actually have to pay. Insurance usually handles this for those who have it, but for most people who dont they have to make an economic decision to seek health care. Free clinics offer some care, but for those who work a lot, their long delays mean they are not options because these people often have to work, sometimes multiple jobs.
Anon:
Rereading your post again, I think its a matter of me reading the statement in a way contrary to what you intended it to mean.
Yes, and out of context! It means something VERY DIFFERENT when you take what was said BEFORE IT.
Try it!
My comment clearly favors a strong approach to health and fitness. By being fit you get all the associated benefits, including better health. For example, you are far less likely to need a triple by pass if you are fit as opposed to fat and sedentary.
Anon said :
I dont have any real interest in starting an argument about what constitutes proper paragraph construction, so Ill just assume you were applying that comment to “free” health care, and appollogize for misreading your statement.
Thank you for the apology. However, the error was in not reading what I said before the piece you posted. Context is everything .
Anon said :
“Once again you draw a completely erroneous conclusion. As I clearly state the poor don’t pay for their own health care.”
Then you are utterly out of touch with reality. Most people, if they go to see a doctor, actually have to pay.
Can you debate without insulting ? Or is that not possible for you ?
Most people are NOT POOR. So your statement in no way refutes mine.However , if you mean to say most poor people have to pay for their care it is you who are utterly out of touch .
Gosh, this is going to be an interesting argument should congress get a hold of it. It seems easy to fix, but it probably isn’t.
OK, anybody thinki price controls will work?
That begs two questions. Will it work and if so is that reason to institute such a measure. While you are at that, why not fix the price of my Patriots season tickets?
Price controls work to keep the price down but at a cost .Simply look at rent control and you will see what I mean .
MichaelF,
Your ignorance is astounding. The current plan is the fifth one my company has had since I started and it is the only one offered to the employees. Why? Because of the constant drastic premium increases. Not a sudden rapid rise. These increases have been occurring for years now. So the current plan has nothing to do with the plan that they had when I started working there nine years ago. Why? That lovely free market system you worship. I live in the real world, not the delusional la-la land of free market perfection that you inhabit. You spout all the platitudes of free market libertarianism without a clue as to how absolutist, unforgiving and inaccurate it is. I’ve said it before and reading your posts do nothing to change my mind about blind faith in the free market such as yours being no more reflective of human beings, their good points, bad points and the imperfections of all of the systems they create than communism.
Jim said :
MichaelF,
Your ignorance is astounding. The current plan is the fifth one my company has had since I started and it is the only one offered to the employees. Why…So the current plan has nothing to do with the plan that they had when I started working there nine years ago. Why? That lovely free market system you worship.
I’m very aware of exactly what you are talking about. As an employer I deal with the issue of employee benefits directly.
I told you earlier. Your benefit package is part of your compensation. If you feel it isn’t enough, ask for a raise to purchase additional service. Otherwise, stop your grousing. I certainly have no desire to pay for your health care as you don’t work for me.
The lovely free market is working just fine for me. I could not be happier with my health care plan. As I said before, it’s a bargain.
im’s pissing and moaning over the plight of his health insurance reminded me of another issue. As I stated to Jim, he gets a compensation package which includes a health insurance plan. That should be considered additional income. This notion that health insurance should be expected from an employee is rediculous.It took root when the government fixed wages during world war 2 . As a result companies looked for new ways to entice employees .Fringe benifits became a way around the wage freeze .
As an employer I want to attract people with the best package I can offer. But why should health insurance be expected? Why not car insurance since that is the mode of transportation many take to get to work? How about property insurance? Complaining about health insurance amounts to dissatisfaction with your pay. Find a better job. Purchase your own insurance plan. Start an insurance co-op. But don’t expect me to subsidize you .
At least MichaelF is honest about his sociopathy. The perfect modern American conservative. I’ve got mine, screw everybody else.
Actually Jim S, I have to beg to differ with you here. The free market is much more reflective of human behavior and the forces that drive it are the inherent tendencies of people to act in their own self interest, while communism relies on people having altruistic motives that are generally lacking (or at least, impulses toward the betterment of individuals as a corollary of the betterment of the group). That is why relying on market solutions often leads to greater success than relying on solutions that give power to the state.
That said, I agree that the free market has flaws as well and we should look for these in order to predict when the market won’t work, thus creating a justification for government regulation in those instances. There are two main reasons for problems with the free market in health care: one, that we see health care as a commodity that should be readily available to all, not a luxury that can be meted out according to wealth; and two, that the free market doesn’t function well in a system with third party payment (health insurance).
CS,
One of the reasons blind faith in an unregulated free market is delusional in my opinion is a failure to recognize that it will lead to monopolies that defeat the purpose of the market and not recognizing that even without monopolies it can be rigged by the people with the most wealth and the ability to control choke points that exist in many situations.
In addition the free market does not work in any system that cannot support the rational actor model. For the free market to work the overwhelming majority of the consumers involved in it must be able to knowledgably evaluate what they are getting for their money according to easily understood parameters that don’t change after acquisition. This doesn’t work in health care in large part because even if there wasn’t third party involvement human nature doesn’t have people evaluating beforehand the best places to go in case of the large variety of medical treatments and emergencies that people are possibly going to need.
Jim S :
At least MichaelF is honest about his sociopathy. The perfect modern American conservative. I’ve got mine, screw everybody else
Typical left response .But completely wrong . I had the same persepctive when I was poor .
I got mine by earning it . I expect others to do the same .
C stanley said :
There are two main reasons for problems with the free market in health care: one, that we see health care as a commodity that should be readily available to all, not a luxury that can be meted out according to wealth; and two, that the free market doesn’t function well in a system with third party payment (health insurance).
Private insurance works quite well for the majority of people when they use it properly. It should be part of a plan which includes eating properly, not smoking, and being active. In addition. it should not be the only finds you have to pay for medical emergencies. If that is your definition of a luxury we speak different languages
MichaelF,
Thank you for proving my point. And you’re so ideologically rigid that you will never even be capable of realizing that you did.