Fixing the health care system
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Started by metmike - Aug. 23, 2019, 10:44 p.m.

Tim and I are having a good discussion about fixing the health care system that started in a Bernie Sanders thread that I thought would best be carried over to a new thread.

I started it out by pointing out that, I agree with Sanders on one issue.........the government is going to have to intervene in the current health care system to stop the current collapse.

This may not necessarily mean abolishing private health insurance as Sanders proposes(though it may mean that if the government is unable to force rates that private health insurance companies pay down to much lower rates paid by Medicare for the exact same care at hospitals).

This would still not address the tens of millions of uninsured though, which Sanders Medicare for all does.

I will copy the rest below:

By metmike - Aug. 23, 2019, 10:46 p.m.
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                By TimNew - Aug. 23, 2019, 8:48 p.m.            


The government has completely screwed up our healthcare system.  How could you possibly think the fox will make the henhouse safer?   

You want them to fix healthcare like...

1.) They fixed the drug problem in this country?

2.) They fixed poverty?

3.) They've reduced the cost of education while improving the quality?

Edit: And oh yeah 4.)They're fixing the  climate <G>

I could go on but instead,  I'll ask you to direct me to a government success story.

Government has some essential and clearly defined functions and are a necessary evil.  They should be treated as such.

By metmike - Aug. 23, 2019, 10:50 p.m.
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My version of the government taking over involves something completely different........ FORCED, massive price controls.

*Health insurance can never be affordable if health insurance companies keep paying the price gouging and the huge overpaying that they do to medical entities..

*Massively mark down the price of all overpriced drugs, many by over 50%. Some by over 90%. All other countries in the world pay much less for the same drugs that we buy here. Some pay less than 25% of the price.

*Mark down the price of medical costs and procedures. It may cause some doctors to decide on other careers but the ones that stay will be doing it because they want to make people healthy not make tons of money.  They can still make plenty of money. 

*Hospitals make massive amounts of money by over charging private health insurance companies. This needs to be reigned in big time. (Some hospitals actually lose money on medicade/medicare patients).  

*Force private health insurance companies and medical entities to use the same, much lower rate agreements that Medicare and Medicaid coverage pays for. Then force them to pass on those rates to customers. 

The article below spells out some of the dynamics clearly:

          True Cost of Heathcare

Summary of Main Points

1. Hospitals in the U.S. billed an average of 3-1/2 times what they received in payments for all of the services they provided in 2015.

2. The amount hospitals bill over what they receive has increased dramatically over the last few decades. Four decades ago, most hospitals billed only a few percent, on average, more than what they received in payments.

3. Very little of the care hospitals provide is uncompensated; about 2-4% on average. Deductions by Medicare, Medicaid and the insurance companies account for almost all of the differences between billing charges and receipts.

4. Even though hospitals in the U.S. are paid an average of less than 30% of what they bill, their profits margins have averaged around 8% in recent years.

6. The proportion of a hospital bill a private insurance company pays is substantially higher, on average, than the proportion Medicare or Medicaid pays, and that difference has grown steadily since 2000.

7. Private health insurance companies deliberately overpay hospitals to ensure that their revenues continue to grow each year.

8. Hospital costs per enrollee have been nearly static for Medicare and Medicaid recipients since 2008, whereas they’ve grown by more than 60% for the privately insured.

By metmike - Aug. 23, 2019, 10:50 p.m.
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Figures 7 & 8 are from AHA data and show that hospital profit margins in the U.S. have ranged from four to six percent most years since 1981, though, in recent years, they’ve done much better. Figure 8 focuses on hospital profits since 2001 and shows that, with the exception of 2008, profits for U.S. hospitals have risen consistently during the twenty-first century. The average profit margin for hospitals in the U.S. has been around 8% since 2012 even though more than 80% of hospitals admissions in the U.S. are to non-profit hospitals.

By metmike - Aug. 23, 2019, 10:51 p.m.
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The following three figures show just how much private health insurance companies have been overpaying California hospitals in recent years. Keep in mind, Medicare covers the elderly and disabled and Medi-Cal covers the impoverished and the disabled whereas private health insurance usually covers the young and employed. It makes very little sense to think that privately insured people would be more expensive to treat than Medicare or Medi-Cal recipients.

By metmike - Aug. 23, 2019, 10:52 p.m.
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Private insurance patients are charged much more...........but they cost less:

By metmike - Aug. 23, 2019, 10:53 p.m.
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Hospitals over-bill persistently and excessively to the point where hospital billing charges have ceased to have much meaning beyond their ability to shock and frighten people. The question is: why do hospitals over-bill by so much and why is this problem getting worse each year?

They don’t over-bill to make up for uncompensated care. Neither charity nor bad debt are significant financial issues for most hospitals in the U.S. Nor has the amount of uncompensated care provided by hospitals increased significantly at any time in the last four decades. In fact, since 2014, uncompensated care provided by California hospitals decreased by around 50%.

The most obvious reason hospital over-billing has increased so persistently is that hospitals can make more money by doing it. While Medicare and Medicaid control their costs by tying their payments to the actual cost of medical services, private insurance companies appear to be just paying a fixed percentage of what they’re billed. That alone gives hospitals a strong motivation to inflate their billing charges by more each year independent of their costs.

Why are private insurance companies overpaying hospitals by so much each year? It’s not because they have to. The largest private insurance companies cover nearly as many people as Medicare. In fact, the largest private health insurance companies dwarf the largest hospital conglomerates in sheer size, so the insurance companies have easily enough negotiating power if they really wanted to drive hard bargains with hospitals.

There are two major reasons private insurance companies have been overpaying hospitals. First, it’s not their money most of the time. Most employer sponsored private health insurance policies are covered entirely by employers who self-insure. In such cases, the insurance company only negotiates the payments, but never pays anything toward the medical bills. Since the insurance company isn’t bargaining with their own money in such cases, they have little motivation to drive hard bargains.

But even when they are bargaining with their own money, insurance companies are financially motivated to over-pay on hospital bills. Why? Insurance companies can make more money that way.

The revenue for any health insurance company is tied directly to its expenses. In other words, the more a health insurance company spends each year, the more revenue they can earn (through premium increases the next year). Therefore, the last thing any health insurance company would want is for their overall expenses to drop. If their expenses were to drop, they couldn’t justify raising (or even maintaining) the amount they charge policy holders in premiums. That would be a disaster for them.

Since hospital utilization has been declining overall, it would be hard for private health insurance companies to continue to show an increase in their costs each year unless they deliberately overpaid hospitals, so that’s exactly what they do. Hospitals don’t mind being overpaid, so they’re not complaining. Since hospital bills always show enormous discounts from the insurance companies (due to persistent over-billing) most people wouldn’t suspect what the insurance companies are really doing. This way, both sides can work together to profit from our ignorance.

By metmike - Aug. 23, 2019, 10:53 p.m.
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                By TimNew - Aug. 23, 2019, 10:11 p.m.            


Yeah. Government price controls have a looonnngggg  history of success.

Remember the fantastic success of price controls  on fuel back in the 70's?

Artificial price controls lead to rationing.  Just what we need in healthcare. 

That would actually solve a lot of problems..   But probably  not in the way you or I would like.

BTW, have you heard about how many doctors  refuse to take Medicare/Medicaid patients?  More every year. Between compliance costs and "fixed" reimbursement, they just can't afford to provide care..  But do we really need the best doctors? Seriously?

We'll save so much money and get better quality when lobbyists and congressmen decide what and how much we'll pay. We dumb consumers  can't be entrusted with these sorts of decisions.

By metmike - Aug. 23, 2019, 11:51 p.m.
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I understand your points Tim but if ALL doctors were compensated for ALL patients at the same Medicare rates, they wouldn't be refusing ANY patients for the reason they refuse Medicare patients now(less compensation for the doctor because of government imposed rates), so this would actually solve another problem there too.

If this causes some doctors that feel undercompensated for their doctoring to leave the profession for greener pastures, then let em go.  Of course we want a system that maximizes the reward to motivate the best to become doctors but there has to be an affordability element to consider.

The system is broken. The main broken part involves expenses. The population is aging and is incurring more medical expenses. It would be wonderful if money/costs did not have to be cut in a way that might lower the value of medical care in some cases.

That is impossible. We can't have our cake and eat it too. The system can't be fixed without making cutting costs THE TOP priority.

By metmike - Aug. 24, 2019, 12:02 a.m.
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How the U.S. Pays 3 Times More for Drugs

In Britain the world's 20 top-selling medicines are three times cheaper than in the U.S.

"The latest furore over U.S. drug costs was prompted by the decision by unlisted Turing to hike the cost of an old drug against a parasitic infection to $750 a pill from $13.50. It has since promised to roll back the increase.

The same medicine is sold in Britain by GlaxoSmithKline for 43 pence (66 cents)."

That last example is obviously and extreme outlier but it couldn't exist unless the system is very broken. There are hundreds of similar but less extreme examples.

Chart of the Day: Big Pharma's Big Profits

Ten companies, including nine pharmaceutical giants, accounted for half of the health care industry's $50 billion in worldwide profits in the third quarter of 2018, according to an analysis by Axios’s Bob Herman. Drug companies generated 23 percent of the industry’s $636 billion in revenue — and 63 percent of the total profits. “Americans spend a lot more money on hospital and physician care than prescription drugs, but pharmaceutical companies pocket a lot more than other parts of the industry,” Herman writes.

By TimNew - Aug. 24, 2019, 7:09 a.m.
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I'm surprised an intelligent guy like you is wiling to allow the same people who brought us the "climate crisis" the chance to fix our health care crisis. Particularly when we are surrounded by the constant successes of free market solutions. Imagine the cel phone if it were provided/controlled by government. It would weigh 10 pounds, have a rotary dial and cost 600/month.  Of course they'd subsidize that with tax dollars to make it "affordable" for our less fortunate citizens making the actual cost closer to 1000/month when you add in the costs of running the "Affordable Cel Phone" department.

The whole problem is that government working with insurance and pharmaceutical companies has removed free market concepts from the equation. 

As far as costs in other countries...Are you surprised that Mick Jagger came to the US for his heart surgery?  I'm not. People with money often come to the US.  We don't have a quality issue,  we have a cost issue. And I don't know about you,  but I don't have a lot of confidence in the government controlling costs.

By metmike - Aug. 24, 2019, 2:45 p.m.
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You are looking at this wrong.

1. The climate crisis has nothing to do with this.

2. I am not looking at this as the solution offered by the party that has corrupted climate science. My solution isn't the one offered by the Democrats, other than it's got to be accomplished by the government taking over and IMPOSING new pricing. This could work with private health insurance too but its unlikely that can continue to exist with the corruptions and entrenched problems, as well as price gouging that is so prevalent with private health insurance.

3. Note that my solution offered earlier did not include universal health care..................though, my belief, in addition to this solution is that we SHOULD have universal health care. You and me disagree about universal health care too but I am not saying universal health care is the fix. I am saying that whatever health care system we use, it's imperative that it feature massive, massive price reductions in all the costs that will never happen without the government stepping in and forcing prices down.

4. The reason for continued, major price gouging is our corrupt political system and politicians. They know dang well how badly this is hurting Americans and they know everything that I've laid out clearly in this thread. So why don't they fix it. They know these reasons but none of them are going after the real reasons?

5. Because they are obedient to the puppet masters who tell them what to do, not to the American people. The ones that control lobby money and support their campaigns. Politicians have allegiance to the powerful special interests that control pricing of drugs and other costs in this industry. That is their top priority.

6. Here's a perfect example relating to a discussion with cliff the past week. Corn ethanol. Its putting 10%(now upped to 15%)  of ethanol into our gasoline. Is this a  policy that the American people voted for or even expressed majority support for?  Does the ethanol industry, like others similar to them compete with their product in a free market, captitalistic, democratic dynamic? Just the opposite.  The extremely powerful corn lobby and ag interests,  got control of our politicians(who obey these puppet masters because the farmer vote is huge) and caused them to IMPOSE/FORCE all gasoline refiners(with exceptions to some small ones) to blend over 17,000,000,000 billion gallons of ethanol into the gasoline.  The RFS mandate is not optional and the amounts go higher each law.

So we already have a government that can and  does FORCE actions on an entire industry with impressive efficiency when it wants to.

The reason the government is doing it with ethanol is not to benefit the American people, its for self serving reasons. 

And the reason it's NOT doing it with the health care the same. For self serving interests, despite it harming the American people. 


I assume that you must be vehemently against the governments corn ethanol, non free market mandate policy?

The intent here is to not to be critical of that policy but to say that politicians are big fat hypocrites when it comes to how they use total government control in one industry(ethanol) but on another(health care) they make unjustified excuses for the government to not take control.

Again, my government control relates to price fixing. Obama care did ZERO to address that and in fact, made it much worse. 

By TimNew - Aug. 24, 2019, 3:39 p.m.
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massive price reductions in all the costs that will never happen without the government stepping in and forcing prices down.

At the risk of oversimplifying, I believe this is the crux of your argument.  And with all due respect, it's flawed..

Prices for services come down when people compete. That's an economic law  that's about as solid as the law of gravity. People are rewarded for innovation. Small improvements are made all the time with occasional HUGE breakthroughs. Throw in government regulations and mandates, and that economic law is no longer in effect because when services are regulated, the first thing that's bought is the regulators. That's the long and the short of crony capitalism.

Take lasik surgery.  It has less government intrusion than most and insurance doesn't cover it. Every year it gets cheaper and better.  This is freekin eye surgery.  

Healthcare is a service.  And like all services, when people who  know what they are doing are left to their own devices, they do what they have done since we started hunting for food. They find better and easier ways.

Granted, with emergency care, the equation shifts. However,  95+% of our healthcare decisions are non-emergency.  But I have to wonder..   With my emergency in March,  how would that have turned out in one of these countries that  pay so much less?

Bottom line. More government, when government is a major factor in the problem, is not the solution.  Quite the contrary.

I've gone into this in depth, but the short version, we need to start treating health insurance as insurance.  Use it for unexpected expenses. Pay for everything else out of pocket,  with an HSA. I'd even support government subsidy of the HSA,at least for lower incomes.  Start the HSA early in life, when expenses are low and accumulate throughout your early life. When we personally see costs of services, we become informed and make informed decisions. The health industry will respond like any other industry.

By metmike - Aug. 24, 2019, 8:16 p.m.
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I like your idea for an HSA and paying out of pocket Tim.


That all sounds great in principle but when you come down to the application in the real world it falls apart.

Your law of gravity certainty regarding prices on drugs coming down if we just had competition, for instance isn't working so good. In the real world, most people need these medicines right away and they don't shop around to a bunch of different pharmacies every time they get a prescription for an antibiotic when they are sick to get the best price or if they need thyroid meds or a prescription eye ointment. 

I actually have done that before several times on new stuff that's very expensive and there can be a difference. .....but here's one of the things. Some older people like me take several meds and the cheapest rate for each one can vary.  Will they go to Walmart to get their heart med filled every month because its cheapest there, then make an additional trip to CVS to get their thyroid med, then to Walgreens to get there cholesterol drug. Then, when a new med is prescribed, call all the phamacies in town to see what price each one charges and have it filled at the cheapest place?

Almost nobody would do that...........and even if most people did, it wouldn't make much difference in the price the pharmacies charge because they are not the ones marking the price up.

The drug companies set the prices and its not based  purely on the laws of supply and demand or market forces

There are a host of factors at play that would require several pages but suffice it to say that drug companies are making massive profits at the expense of Americans by price gouging that is allowed by politicians and organizations, like the FDA that look the other way because they are legally bribed(much of it thru lobbying money that get them favorable treatment in allowing them to inflate prices). 

The research and development justification is just crapola, when you consider that we pay 3 times as much for the exact same drugs as other countries do in Europe.........see the previous article. So, again it boils down to government. Our current government/politicians is/are more concerned with using the dynamics for self serving benefits at the expense of the American people when it comes to the price of drugs. 

Only the US government can put a stop to this.........but they won't because those with the power to stop it are being bribed not to. 

Big Pharma spends record millions on lobbying amid pressure to lower drug prices

PhRMA's previous record lobbying bill topped out at just over $25 million when the industry fought the Affordable Care Act in 2009.  

According to OpenSecrets, a nonpartisan, independent research group tracking money in US politics, individual companies within the pharmaceuticals and health products sector spent $194.3 millionon lobbying as of October 24, 2018 over and above the amount disclosed by PhRMA. 

Congress and the Trump administration continue to push for a drug pricing plan and were given more ammunition Tuesday in the form of a report documenting that insulin cost nearly doubled in the United States between 2012 and 2016. 

The report from the Health Care Cost Institute, an independent research group funded by four health insurance companies, found that individuals with Type 1 diabetes spent, on average, $5,705 per person on insulin in 2016, an increase of $2,841 per person since 2012. "The price of all types of insulin and insulin products increased, with point-of-sale prices roughly doubling on average between 2012 and 2016," said the institute, which holds data on over 50 million commercially insured individuals per year.

President 'Donald Trump, who campaigned on a promise to lower drug prices, posted his blueprintfor doing so in May. Steps include negotiating better Medicare Part B drug pricing and addressing "intellectual property theft and foreign freeloading."

Medicare drug prices soar at 10 times rate of inflation, report says

US Health and Human Services Secretary Alex Azar remarked last week that despite some "positive developments" in pharmaceutical pricing behavior, "drug companies have a lot further to go."

Between May and the end of 2018, "drug companies took 57% fewer price increases on brand drugs compared with the same period in 2017," Azar said. He also applauded Amgen, Merck and Gilead for cutting the list prices on some of their drugs and noted that "early data suggests that the 2019 price increases have been smaller and fewer in number than we saw in 2018." 

Trump has the right idea on this but if the government was real serious, they would clean house at the corrupt FDA or at least hold them to ethical standards....again, the FDA is part of the government and instead of always working for the American people, over half of those associated with FDA decisions are taking bribes from the drug companies.

Hidden conflicts? Pharma payments to FDA advisers after drug approvals spark ethical concerns

FDA’s revolving door: Companies often hire agency staffers who managed their successful drug reviews

Varying sums


An analysis of pharma payments to 107 physicians who advised FDA on 28 drugs approved from 2008 to 2014 found that a majority later got money for travel or consulting, or received research subsidies from the makers of the drugs on which they voted or from competing firms. And this was just money that could be tracked!!!


  No payment    =41 advisors

$1–$10K =26 advisors

$10K–$100K  =14 advisors

$100K- $1M =20 advisors

   >$1M   =26 advisors


Corporate payments and other support given to advisers before a drug review are widely acknowledged as troubling. When "a voting member of a committee demonstrably had financial associations with the company or the competitor prior to the meeting, and the FDA doesn't flag it, then somebody's dropping the ball on due diligence," says Yale University physician Robert Steinbrook, editor at large for JAMA Internal Medicine.

Yet benefits that come later, even years after a drug approval vote—jobs, money, professional prestige, and influence—are also fraught, ethicists say. They are a way of "postponing your reward," says Carl Elliott, a medical ethicist at the University of Minnesota in Minneapolis who has persistently criticized the financial inducements pharma gives to researchers. "You do something positive for a company that you feel confident is going to pay you back for it later on. And they do."

By metmike - Aug. 24, 2019, 8:33 p.m.
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Why Do Other Rich Nations Spend So Much Less on Healthcare?

One reason for the more expensive mix in the U.S. is it produces more income for drug manufacturers, specialist physicians, and others who have considerable influence on policy.

A second important reason for higher healthcare spending in the U.S. is higher prices for inputs such as drugs and the services of specialist physicians. The prices of branded prescription drugs in the U.S. are, on average, about double those in other countries. The fees of specialist physicians are typically two to three times as high as in other countries. The lower prices and fees abroad are achieved by negotiation and controls by governments who typically pay for about 75 percent of all medical care. Government in the U.S. pays about 50 percent, which would still confer considerable bargaining power, but the government is kept from exerting it by legislation and a Congress sensitive to interest-group lobbying.

The third and last important reason for higher spending in the U.S. is high administrative costs of insurance. This includes private insurance which covers more than half the insured population."


None of the significant reasons for other rich nations to have much more affordable health care include more competition in the marketplace by their health insurance companies.

Even if health care insurance companies are operating with very low profit margins, they still have to make a profit. They can't do that without charging something more than what  they pay out...........for drugs and medical costs.

Drugs and medical costs in this country are massively inflated. 

Obamacare did nothing to address this and in many cases, made it maybe its easier for you to be more open minded about this in appreciating the fact that we agree about this. 

Universal heath care is a differnt aspect to this subject and not what I'm discussing.

Private health care could work too and be much more affordable.............if the government

1. Did its job enforcing policies meant to help US consumers.

2. Stopped taking bribes

3. Forced prices lower in a way that only the government can do and the market can never do in this realm

By TimNew - Aug. 25, 2019, 9:14 a.m.
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You are actually verifying some of my points here.  We the people have to start making more informed decisions,  but you yourself confirm that most don't want to be bothered with shopping around. Leave it to the government.  They can fix it and save us the trouble.  They have some sort of magic wand that works better than any free market principles.

Yes,  other countries pay less.  There are many reasons for this. Part is government price control. Part is lifestyle choices. Compare the obesity rates in the US with other countries. And in these counties that pay less,  they have less equipment,lower quality staff, and the monied populace will often choose the US for their serious health care issues. Where will they go if the government starts restricting services, which is, whether you know it or not,  ultimately what you are suggesting. Price controls lead to rationing.

I still maintain that one of our worst problems is our expectations on what insurance should cover.   John Stossell and I are often on similar,if not the exact same page on many issues, including this one.   A nice video by Mr Stossell.

Another one on Government involvement,tho neither of us are considering Single Payer.  At least I don't think so.

By metmike - Aug. 25, 2019, 9:47 a.m.
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Thanks Tim!