Did you ever respond to “that was the baseline before any part of the health care bill was ever discussed?”
jeffd
3442
Another Federal judge struck down a challenge to the ACA. Take it away Jonathan Cohn!
Naturally this is getting no play in the media. Partially that’s because it’s a less interesting story (status quo: unchanged.) Partially that’s also because of the media’s somewhat rightward tilt these days.
Cohn’s analysis is interesting but ultimately pointless. This doesn’t change the fact that the fate of the ACA is mostly dependent on what Justice Kennedy has for breakfast on the day he decides the inevitable Supreme Court case.
jeffd
3444
A pair of graphics from Medical Billing & Coding. I’m about to break vscroll, sorry! :)
jeffd
3445
In other news: Vermont is about to pass a single-payer healthcare system. The Incidental Economist is spending a week covering the law, it’s worth following along: link.
Also: here is an interview that Ezra Klein did with Keith Outterson on the Vt. law. Outterson makes a very good point: if you’re an advocate for single-payer in the US (as I am) but you also believe that the national political structure makes it impossible to pass single-payer (as I do) then Vt. is going to be a very big deal. If they can manage to contain costs (and of course that’s a very big if) there’s every reason to expect the Vt. program will spread to other states on a decades-long time horizon.
Very good pair of graphics there.
Particularly telling: the graph comparing health care cost to per-capita income, giving some context to price differences elsewhere, and the income-gap between doctors and patients. Most surprising for me was that our screwy health insurance system isn’t more expensive than stated, I thought it was more to blame than it is.
jeffd
3447
You can kind of understand health insurance as just a middleman. It takes a static percentage off the top - iirc it’s like 3% of the total systemic cost. If you eliminate health insurance tomorrow you get that 3% back but you do nothing to reduce cost growth; insurance is not a driver of cost growth.
That’s not necessarily true, jeff, for reasons which I will yet again bring up and expect nobody to pay any attention to.
The way the current health insurance system works drives cost growth in several ways. Most of them have to do with doctors resorting to jacking up their rates because the insurance companies don’t pay the agreed sums (it’s quite standard for them to simply say "We agreed to pay 300 for this procedure, here’s 150), which is a delicious and fun feedback loop.
There are also other factors, but it’s not nearly as simplistic as most people claim.
It may be that insurance increases other costs in ways that don’t show up directly - eg, doctors are overpaid, but maybe doctors have to work much longer hours because they spend so much time fighting the insurance companies and then require more money to compensate them for the time and stress involved.
jeffd
3450
Actually it really is. :)
Granted that doctors have to jack up their rates to make up for insurance nonpayment. Even if they increase their rates across the board by 100% - the key is that it’s a one time increase. You’re positing some sort of vicious cycle wherein insurers further increase nonpayments in response to the higher costs and that sounds reasonable - but I’m not aware of any evidence showing it’s a significant contributor to the GDP+3-6% cost growth we see in the healthcare sector of the economy.
jeffd
3451
Maybe. I don’t know. I do know that US doctors tend to work longer hours than their European counterparts. On the other hand, so does everyone else in the US. Insane residencies aside, I’m not sure if doctors work disproportionately more than other US professionals.
You know your graphics contradict that, right? They state that administrative costs are 21% of the problem, and 85% of that is insurance.
It’s pretty easy to see why. Insurance companies do not care whether money is spent on actual health care or administration, just that the money is spent. If it costs $90 to deny a $100 claim, that’s the cheaper option, and it’s their financial duty to pursue that course.
Case in point (yes, I know this is an anecdote, but it’s illustrative). My wife was hit by a car while on foot. While she sustained nothing worse than some really nasty bruises that lasted months, that got her a trip to the hospital in an ambulance, because she could have had internal injuries, hairline fractures, or what have you.
The bill for the ambulance and the ER bounced between the driver’s auto insurance, our car insurance, and the respective health insurance plans for well over 6 months. Despite the facts of the case being simple and responsibility clear, it was worth the money for all the insurance companies involved to pay staff to play tennis with the bill.
Eventually part of it got paid, and the hospital just gave up on collecting the rest. Huge waste of time for a lot of people from an objective point of view, but stalling saved the insurance companies money. So they do it.
The possibility just occurred to me because of a stat I remember reading somewhere - too tired to try to chase it down right now - that said American doctors on average spend 50% of their time dealing with insurance companies, in one way or another. I thought it was unbelievable when I read it and writing it now I find myself thinking I must be misremembering - can it really be that high? Anyway, if it is, that’s an incredible source of inefficiency that would have knock-on consequences all over the place.
That shit right there has to be outlawed stat. Unless an insurance co. has a good-faith suspicion of fraud, it and its officers/employees should be required by the criminal code to pay promptly or be prosecuted.
jeffd
3455
Don’t get me wrong - insurance companies are awful! I just don’t see any real evidence that they’re driving cost growth, as opposed to being a static chunk of the system’s overall costs.
re administrative costs: undoubtedly part of that is insurance. But have you gone to a doctor’s office? Patient records are all paper files stored in closets. It’s a nightmare - it’s why the PPACA included a goodly chunk of change for modernizing medical record keeping. It’s the same thing as malpractice & the associated costs (defensive medicine, insurance, etc): it’s a cost factor, it’s too high, but it’s not driving cost growth.
Not in isolation, but they’re a multiplier. The incentive to engage in shenanigans increases as the relative cost of paying benefits increases. The key driver is the percentage of cases where it’s cost effective. When it was only outliers, the most expensive ones, it was a small percentage. Now that it’s any hospital stay, it’s a much bigger chunk. At some point this will level out as a flat percentage, but we aren’t there yet.
In regard to doctor’s paperwork, why is it that our doctors are so much worse at keeping paperwork than every other country mentioned? How are we different in that regard? I find it difficult to believe that all the other countries, including places like Poland and South Korea, have just shifted to modern electronic records faster.
The places to look for cost drivers aren’t issues that affect all doctors worldwide, but the ways in which our system is unique. Like how we pay for services.
jeffd
3457
regarding insurance and cost increases: like I said, I’m not aware of any research showing it’s a contributing factor. The majority of cost increases in our country go to the delivery system, not to the payment system. I could be wrong - I’d love to see a data series otherwise - but I’m skeptical right now.
As far as why other countries have gone to more modern record system: from what I gather it was good ol’ Big Government. Switching over to electronic records is a pretty big investment and it’s not one that individual providers seem willing to make on their own.
Pogo
3458
That’s… not true at all. Some doctors do their own billing, though, which can take a decent chunk of time, maybe 20%.
The second chart clearly proves that Americans should drink more alcohol and smoke more tobacco if they want cheaper healthcare with better results.
Jeff, you seem to be confusing cost growth with cost. What I mean is that you and Aaron are talking past each other a bit. Yes, insurance may not be driving the growth part right now. But they are still a huge part of our total cost when compared to other nations, since they aren’t regulated really. The charts you give show that. Plus, as mentioned, insurance companies don’t pay the full amount charged, so doctors charge more to get what they are trying to earn. That drives up costs, but can’t be quantified very easily, as I’m not sure it’s being tracked very well.
As for dealing with the companies, many places have employees whose sole job is to run the insurance (or they hire a firm to do this). That’s a cost not directly captured in the graphs either, I don’t think, unless it’s included in those administrative costs (which aren’t broken down, so it’s hard to say).
In any case, it’s clearly a systemic problem. Competition (privatized medicine) is NOT keeping costs down. Whether it is driving their growth is debated, but it’s not halting it, and we clearly aren’t doing well when compared to other nations. So why are people so opposed to letting the govt. do it?
