I thought that was, basically, how we did it today in the US. I thought that most prices were based upon Medicare rates. There is the problem that when large medical groups have bargaining (read: monopoly) power in an area that they can extract a heavy rent from the insurance companies that don’t have market power, but I thought that this market distortion wasn’t a big deal in the grand scheme of things (although it is irksome).
It’s not just the rates that are an issue. It’s the number and type of procedures done by doctors who make money if they prescribe more (or prescribe more expensive ones).
Medicare spending per patient sees wide variance from region to region. Healthcare outcomes are not better in regions with higher medicare spending nor does cost per patient correlate with cost of living (in fact some poor regions can be among the highest in cost per patient).
Yep, planet money & TAL had a great series on the varying number of procedures (and health care costs in general) and the results. Which is why setting the rates isn’t “the answer”.
Ah, but Medicare rates aren’t set by the government. They’re set by a panel of medical doctors, through the AMA:
Most insurers, however, tee their payment rates for physicians off Medicare reimbursement rates. Medicare’s physician fee rates are based on the relative cost of providing services determined something called the Resource-Based Relative Value Scale (RBRVS). A panel of medical doctors, through the American Medical Association, updates the relative work values every five years based on: the time it takes to perform the service, the technical skill and physical effort, the required mental effort and judgment, stress due to the potential risk to the patient, malpractice rates in the area, and other geographic adjustments to reflect cost variation before coming up with a number. The process is also open to public comment and private health insurers — along with anyone else — have an opportunity to weigh in on the process and the rates.
I resemble this remark. My previous posts may seem to say differently because I keep forgetting how poorly sarcasm translates to forum posts. I don’t think rate-setting is the answer. The answer is making healthy people more important than corporate profits (really, not just saying so in press releases) and the only way I can see to do that is just what JeffL said.
Yup. Gotta shift that Overton Window!
And JeffL, ineffiablebob…not really. There are some EU systems which manage very high rates of private healthcare delivery (higher than America, actually) like the Netherlands. The funding structures vary, but the problem is the insistence on not mitigating against adverse selection in any comprehensive way rather than insurance per-se.
The medicare panel doesnt set the rates, they decide how the pie gets split up between doctors, with specialists getting the lions share and primary care getting less over the last few decades. It’s kind of a zero sum game - if PCPs are going to get more, specialists must get less, and the board has more spots for specialists by far than it does PCP, so it’s not a surprise that the specialists set it up so that they got more for their services.
Maybe I’m just not awake enough yet this morning, but I can’t understand what “not mitigating against adverse selection in any comprehensive way rather than insurance per-se” means. I are dumb, I guess - can you clarify?
Basically, for example, in the Netherlands there are two ways the companies are paid.
One is the direct fees they charge people. The second is from a “risk pool”. Basically, a % of salary is taken from everyone working and put into that pool. That pool is then given out based on the health needs/risks of the insurance companies clients. The more needy/risky their clients, the more they get. That compensates for “adverse selection”, the tendency of insurance companies to try and avoid risky clients (and it also encourages preventative care, since they don’t get less if they keep people with complex needs from becoming ill!).
Different countries have other ways of doing it - one is, sure, the single-payer health service proving universal cover - but the thing is they DO have nation-wide systems for it…and the US has only a patchwork of them which are ineffective in many cases.
One is the direct fees they charge people. The second is from a “risk pool”. Basically, a % of salary is taken from everyone working and put into that pool. That pool is then given out based on the health needs/risks of the insurance companies clients. The more needy/risky their clients, the more they get. That compensates for “adverse selection”, the tendency of insurance companies to try and avoid risky clients (and it also encourages preventative care, since they don’t get less if they keep people with complex needs from becoming ill!).
On the surface at least, this seems reasonable.
Fair enough. It’s a single, effective system that I’m after…whether that means single-payer or a functioning incentive system is immaterial.
You just cannot have a system where the primary motivator is profits vs. the well being and care of the patient/insured. CEO’s and board members and insurance execs are rewarded (and punished and fired) based on how much profit they bring in and their stock price.
Strictly speaking you can, so long as profit is aligned with the proper care and well being of the patient.
Of course figuring out how to create that alignment is the hard part.
Sure, to be picky you could. But not in the country we live in.
I dunno, the alignment mentioned by starlight seems to make sense… Provide extra money for high risk patients through a pool, so that insurers can still charge extra for those patients… but the patients themselves are not hit with that cost.
Then, if insurance company ends up being more profitable if they keep the patient healthy, since it’ll involve them not having to shell out as much money for care.
Of course, you may run into the problem of the guy getting sick, and them trying to just ditch their responsibility, so you’d have to prevent that.
How are you going to identify high-risk patients? This is going to be gamed.
I suspect it’s already being gamed. I’ve been seeing some Medicare Advantage plans ask to review patient’s charts. They take the notes. A few weeks later they send back the charts and ask you to approve extra diagnosis codes on them. Those diagnosis codes do not seem to make sense. They seem to be trying to make the patients they have sicker, for what I can only assume will be higher reimbursement. Don’t ask me to provide specifics because that probably gets me fired or sued.
Profit is revenue minus expenses. If profit per patient is increasing in this new theoretical plan it means the government is shoveling an inmense amount of money (for which they happily take their ~25% administrative cut). In fact they really have no incentive to cut costs since money comes from the government.
They don’t have to ditch responsibility. It’s quite simple. If you have one plan that costs less to the patient but has fewer benefits, and one that costs more, risk pools change by themselves. For the individual healthy senior it makes more sense to be in the pool with all the health people than the one with the cancer and diabetics.
Let’s say there’s plan A. It says no copay for normal visits. No copay for your antibiotics, basic drugs, etc! yay! The catch is they have very little cardiology coverage because they pay 60% of what medicare normally pays for cardiology. So while they are in the book, you probably don’t want to wait 6 months for an appointment after you got a heart attack.
Patient gets heart attack and will need expensive rehab / care. They transfer plans themselves to something less restrictive.
…
Need death panels, need to get rid of all those insurance companies, need to stop paying for expensive procedures (what we now consider standard treatment.)
And it applies to any age, not just seniors. This is why I’m a single-payer system proponent. No matter what you do with pools, incentives, etc, the above statement is always going to be true at the core. The best you can do is create a complicated incentive system that tries to make all the pools equal. And if you do that, you’re putting a bunch of resources into maintaining that incentive system which could be going to more useful pursuits…not to mention what happens when the incentive system is wrong.
Confirmed: Superman is a pinko.
Red, white, and blue? More like just a Red if you know what I mean. But what do you expect from a freeloading illegal immigrant?
w00t!
This isn’t really about the healthcare system, except in the sense that it describes how far any system has to go in treating some forms of illness. But it’s an emotional read, worth the time.
I know it’s no surprise to anyone here, but a potential President Romney can’t actually shut down Obamacare on day 1, as so many of the Republican faithful would like. And no matter which way the race goes, it’s going to be crazy in health care:
…key parts of the health care sector have been doing a lot of waiting around for the election — and that given the short timelines, chaos is likely next year no matter who wins.