Insurance Monopolies/Oligopolies

I feel sometimes that I fell asleep and woke up in an alternate universe. The Republicans are trying to protect Medicare Advantage, which is wasteful of taxpayers' money. The Republicans are blocking efforts to establish a public health insurance marketplace that would foster free competition. It is the Democrats that are trying to facilitate free market competition by de-exempting insurance companies from anti-trust laws.

The Republicans violently oppose a public health insurance option on the grounds that it would unfairly compete with private companies. If they care so much about fair competition, will they follow the Democrats' lead and fight the unfair private insurance monopolies? I doubt it. The Republicans have abandoned their values and all reason, and act now only to cripple the current administration and regain power. They don't care about the citizens or economy of this country. They care about themselves.

Competition among insurance providers will reduce the prices of insurance. Let us see that competition. Start by stripping insurance companies of protection from anti-trust laws. A public marketplace would be another great step towards increasing competition and providing the American citizens more insurance options at lower prices.

Unsustainable Resource Allocation

Yesterday I wrote that our elderly are getting 2-4 times the money out of social services as they put in, as hard working taxpayers and their children are deprived of valuable services that would strengthen our country now and for the future. This recent MSNBC interview with crazy Betsy McCaughey gives the CBO citation and shows how the approximately 3:1 ratio was found.

There are two valid drivers for how we allocate money. The more deontological driver is to spend money to give people what they deserve. Benefits to soldiers, for example, or temporary unemployment benefits, or funds to support poor children. People who have a raw deal through no fault of their own, or who made sacrifices for the rest of us, deserve care. The more utilitarian driver is spend money on whatever will net the greatest good. What sets us up to have the best future? Military benefits are driven by this, also, as they are often calculated incentives to attract needed recruits so that we can even have a military. Public works projects that improve our infrastructure so we can continue trade and growth. Investing in research. Paying such vast amounts of money on social services to the elderly is more than they deserve and is not an investment in the future. At least McCaughey wants to raise the Medicare age to 70, even if she opposes making the system more efficient.

The major invalid driver of money allocation is greed. Special interests want their money. Politicians want votes and campaign contributions. Politicians make allocations (corn subsidies, no-bid contracts, F-22s, bridges to nowhere, etc...) that will get them votes and contributions, even though it hurts most people. Old people vote. Old people vote more often than young people. Politicians make policies that benefit old people at everyone else's (and the country's overall) expense. We are in a death spiral of increasing social security and Medicare expenses because politicians pacify the elderly now for votes instead of looking at the big picture and our country's needs for the future.

The interview also helpfully shows that a public option, or the public marketplace option that Obama talked about, would greatly reduce health care costs by eliminating the widespread occurance of localized insurance monopolies. I have two real choices for insurance provision in my area, and that is not competition that benefits consumers. When did Republicans start hating competition? Was it when insurance lobbyists handed them goodies, or are they just stubbornly trying to shoot down at any cost everything Obama tries to do?

Also, tort reform, which I've strongly advocated, seems to be a very low priority as far as cost controls go. It's still a good idea, and the special interest most opposed is the lawyers who take half the money, but it can go on the back burner.

Prevention - Is It Worth It?

I've already mentioned my skepticism of the cost-effectiveness of prostate cancer tests as a preventative measure, since they have notoriously high false positive rates and lead to much unnecessary cancer treatment that results in many side-effects and iatrogenic consequences. I have a vague memory of an issue in California a while back in which gonorrhea tests or treatments were mandatory at birth because gonorrhea can lead to blindness, but the processes were very expensive and only found such a tiny incidence that the requirement was not worth while. Remember, we have finite resources, and they have to be used where they do the most good. If we had infinite resources, we could test and treat everyone for everything.

Many preventative measures are easily worth their costs. Vaccines, obviously. How much has the US had to spend on polio over the last few decades? This CBO letter describes a few other good preventions, but points out that about 20% are not worth doing. Again, very obviously, don't smoke and don't be fat. Get even a modest amount of exercise.

There are some issues with how cost-effectiveness is evaluated. Different projective models come up with different results. (The Health Affairs article linked to by that blog costs money)

One of the most controversial issues in determining the cost-effectiveness of preventative measures is that they can result in increasing people's life spans so that they end up using more health care than they would have if they died earlier. There is also the argument that the elderly worked hard to pay into the system during their lives and deserve to be kept alive as long as technologically possible. Well, they're actually sucking out 2-4 times as much money from social security and Medicare as they ever put in, so that argument is junk. They should definitely get what they deserve, but not more than that at everyone else's expense. This is the reason those social services are unsustainable and threatening to bankrupt our country in less than ten years. We spend great amounts of money to keep people alive past the point of function. To state that we should reduce what we spend on that outcome incites revolt from hillbillies who throw around accusations of trying to kill their grandmothers. Remember, we have finite resources. Keeping someone alive in a bed at great cost takes away money that could help children and workers be more productive and contribute to our whole system. It is not heartless of me to deprive an aged person of expensive care. It is selfish to demand that expensive care at everyone else's expense. The utilitarian ethic is the most compassionate. England realizes this. If we stop spending great amounts of resources on end-of-life care, we change the models that calculate the cost-effectiveness of preventative measures, making more preventative measures worth using that will increase the overall health and productivity of the population of the United States. It is good for the whole country.

Health care is an investment. We pay up front so that we have better outcomes for the future. Make sure that we get the best outcomes we can for our investment. Pay to maximize function for us overall. This will help the system grow strong and be sustainable.

No Public Option

The Senate Finance Committee excludes a public option. This really is no surprise. We know that Baucus is in the pockets of insurance companies instead of his constituents, as are many other politicians. It is also blatently apparent that the entire Republican party is united to prevent the Obama administration from accomplishing anything good for America. The Republicans want the Obama administration to fail at improving our country and serving its citizens, just so the Republicans can cite the failure while campaigning for the next elections.

What can we do?
Well, we obviously need some campaign finance reform, for starters. There is an organization working to accomplish this goal. Change-Congress.org, organized by the illustrious Lawrence Lessig, fights against the sway that special interest groups (insurance companies) have over our government. When there is more of an incentive for politicians to work for their constituents, and less of an incentive for them to pander to money-grubbing companies, we will see policy decisions that are better for this country.

Did we need a public option?
Well, the CBO says that various plans proposed would cut the US deficit by tens of billions of dollars over the next ten years, while providing health care to tens of millions of American citizens who currently have no insurance. I've seen other organizations estimate that the deficit would drop by even more, since the CBO did not look at every related variable. There are different plans, though, and different ideas of what the public option would look like. So, there are proposals that include public options that would help many Americans and save our country money, which are both outcomes we need. There are other ways to get these outcomes, such as a single-payer system (HR676, Medicare for All, has hardly been mentioned) or extremely tight regulation on insurance companies, but a public option was the most likely to make it through congress. It just isn't likely enough.

I am confident saying that any politician currently opposing/stalling efforts to increase the government's involvement in health care, either through a public option, marketplace, expanding Medicare, or more strictly controlling private insurance companies, is motivated only by the drive for personal power. These politicians enjoy their campaign contributions and visits from lobbyists, and the Republicans know that sticking with the party line ensures they will keep getting support in future elections. The politicians who are fighting for the health of our citizens are the ones who care about their constituents.

Listen to the Experts

It is terrible that so many politicians make policy decisions to pacify ignorant and misled mobs instead of using the accurate information available to make the best decisions for our country. I cringe when I catch what passes for television news these days, a bunch of polls and tweets from random people presented as if they should be used to guide our government's policies. Those people don't know what they're talking about!

Here's a neat table comparing the opinions of the informed to those of the random. The average person is selfish and ignorant, and wants unlimited care for herself, not understanding the costs, consequences, or relative quality. They care about anecdotes instead of real data on the quality of a doctor or treatment. They don't understand what variance is, let alone its relevance in health care. They trust their heavily biased and marginally informed doctors.

It is hard to explain the details of health care economics to the average person. It is hard to explain why we should have fewer treatments and more tracking of patients and doctors. It is hard to explain why hospitals should have fewer high-tech machines. It is easier to explain why drug companies are evil and doctors shouldn't be so free to refer patients to clinics the doctors own stake in. Overall, the complexity and scope of health care is overwhelming and confusing to the average person who just wants some security.

The convergence of the expert opinions is good for the country. Trust the experts (in aggregate, not just the few who talk on Fox News). We want everyone to have security, just like you want for yourself. We want costs to be low, and quality to be high. We don't want people bankrupted by an illness. We don't want patients exploited. We don't want the nation's deficit to grow. Not only do we have these goals, we have the knowledge and skills to see how to achieve them. We just need everyone else to stop holding us back.

Obama's Marketplace Plan

Even the famous Ewe Reinhardt agrees with me. Obama's proposed marketplace, where private insurers would compete with a public plan to provide customer-friendly health insurance, is going to be costly. If you're going to give so much care to people, ban rescission, allow pre-existing conditions, and put a low cap on out-of-pocket expenses, then you're going to have an expensive insurance plan.

To keep costs practical, one thing you have to be aggressive about is the chronic diseases that make up the bulk of costs. Encourage and demand more personal responsibility, and be able to cut people off from expensive care caused by their irresponsibility. For example: diabetes is widespread and totally manageable. It is far cheaper to help diabetics follow their treatment regimen than to pay for all the ER visits resulting from improper self-management. Many hospitals offer services that help slower diabetics keep track of their medication, plan their diets, get regular check-ups, and so forth. Not everyone uses those services, though. Some people insist on doing whatever they feel like, and make six trips to the ER each year. That hurts the rest of us. When New York City began a program to call every diabetic regularly to remind them to get check-ups, there was a big outcry about violating their privacy. Well, they violate everyone else each time they avoidably use expensive health care resources. Should everyone pay for a smoker's expensive lung cancer treatment? For a head injury of a motorcyclist who refused to wear a helmet?

We are all part of a system. If a person is going to renounce their responsibility to the system, their responsibility to take care of themselves so costs to the rest of us are manageable, then they renounce their membership in the system. The system should help those who make good faith efforts to support the system in return, but should not be obligated to help those who selfishly and irresponsibly hurt the system. An arrangement like England's that refuses to pay more than a set amount to keep a person alive for a short time would also be appropriate. We have finite resources to be spread out among everyone in the system. If we focus on an individual at the expense of the group, we cause far more damage that we prevent. In health care matters, we need a teleological utilitarian ethic. Even some modern deontologists allow for a 'Principle of Permissible Harm'. Spend our finite resources first where they will cause the greatest increase in quality-adjusted life-years working. That will make the system much stronger and sustainable for the future. Our current system is not sustainable, and is killing more future life-years than it saves now.

Obama's Health Care Reform Speech

I'll just try to comment on his speech briefly.

It is a bit overreaching for Obama to be determined to be the last president to try to reform health care. We have no idea what the needs of America will be in fifty years. We will need constant monitoring, evaluation, and reform in order to adapt to future needs.

Over half of US personal bankruptcies are due to medical bills. Employer-provided health insurance (subsidized by the government) has been and is a bad idea. It is hard for US companies to compete internationally, and good American citizens get screwed if they are laid off or self-employed. Small businesses are over-burdened if forced to provide insurance, and the employees suffer either way. Trying to buy insurance individually strips away negotiating leverage and further hurts people.

America takes less care of its citizens than any other major nation. Not only has the government dropped the ball on taking care of everyone, but it lets insurance companies use techniques like rescission to exploit citizens. Obama is calling out our nation, an arrogant nation that likes to believe it is the best, on its cruelty and heartlessness towards its own members.

Obama correctly points out that we all pay more when the uninsured and underinsured end up in the emergency rooms for trivial problems, or major problems that could have been prevented by cheaper basic care. We pay more money as a country for pathetic health outcomes. What he doesn't go into are the details about that: our high payments for cancer treatments and whatnot to extend people's lives just a little instead of focusing on paying for basic and preventative care that would extend more people's lives by a lot. That would raise more "grandma-killing" nonsense, but it really is a great waste that hurts our whole nation. Is baby-killing better? Or worker-killing? Medicare and Medicaid costs are so bad because we provide expensive treatments to people who are going to die anyway, and we enable people with chronic illnesses like diabetes to not minimize their problems. When we can accept the fact of death for the elderly (the private insurance companies actually do have Death Panels, and they're effective at denying care to anyone), and get people to take the barest responsibility for themselves, costs will drastically drop. We also need to cut down on drugs as a whole culture. Pharmaceutical pill-pushing is costly, damaging, and out of control.

Single-payer systems are great, but not the only good solution. Making individuals buy private insurance is a terrible idea. The insurance companies would love that windfall.

The Republican party is united. That is their great strength. Unfortunately, they unite behind terrible ideas. The Democrats, instead of being blind sheep and puppets, like to think for themselves. This strength allows for creativity and progress. This unfortunately leads to many different ideas, such that even when these ideas are good, they split the votes and lead to conflicts that ultimately allow the Party of No to succeed.

THE PLAN
Finally, the meat and potatoes.
1) Enrollment in the public plan is optional if you have other insurance.
This is good. It will be healthy for private insurers to have to compete. Right now they have virtual monopolies in most of the country. People get to choose what they like (this is not always good because insurance plans can be hard to understand, and people are manipulated by advertisements). It is great to make health insurance mandatory. This will reduce waste due to ER visits, and reduce financial hardships for those who have sudden medical needs but didn't have insurance. Unfortunately, there is a hardship waiver for people who still can't afford the premiums. This is where the feds should just pay the premium, but later Obama says that he won't allow that. Hopefully Medicaid will take up anyone who can't afford the public plan premium.

2) Rescission is illegal for everyone.
This is good. People can have more security.

3) Federally mandated cap on out-of-pocket expenses.
This is interesting. I assume that the cap will depend on a person's income, and not be the same for everyone. This will raise premiums for everyone.

4) Federally mandated coverage for routine check-ups and preventative care.
This is probably very good. He mentions tests for cancer, and that worries me. Some cancer tests are very expensive and/or have high false-positive rates, leading to much dangerous, expensive, and unnecessary treatment. I'm especially thinking of prostate cancer. Overall, though, it will be good to regularly tell more people that they need to lose weight, eat better, stop smoking, etc... I hope this doesn't just give doctors more opportunities to prescribe unnecessary drugs.

5) Public plan for anyone.
This is great, if it is affordable. COBRA is absurdly expensive, especially since it's offered to people who just became unemployed! This will definitely help small businesses and self-employed persons, too. No one can be denied for existing conditions.

6) Here Obama talks about an insurance marketplace. It seems like items 2-4 above would only apply to insurance companies who want to participate in the marketplace. Earlier, it sounded like those rules would apply to everyone, but now it seems like they only apply to private insurers who compete for the customers in the public plan pool. That's good incentive for working people to quit their company plan and join the public plan, but maybe only if company plans lose their tax breaks so the true costs are apparent.

7) No coverage for illegal immigrants.
If you want American services, become an American.

8) No federal money for abortions.
Someone said to me that the public plan can still cover abortions because it will be fully funded by premiums, and not federal money. I am not sure about that. It still sounds like the government would pay 900 billion dollars over a decade for the plan, but expects to get that money back from premiums. Obama didn't say he wouldn't spend federal money on the plan. He only said it wouldn't increase the deficit. It is important for the plan to not spend federal money on abortions because the plan would get shot down.

9) Conscience laws still apply.
These are terrible laws that protect health professionals who refuse to do their jobs.

It is not clear to me what incentive insurance companies have to participate in the exchange. This plan says it will have low premiums, but also provide far more services to a group of people likely to have more health problems. Though there is a lot of waste and inefficiency and advertising in other insurance companies, I still do not see how this plan will work. What is offers is going to be expensive. New customers would only be profitable if they pay in more than they cost, and I am skeptical.

If it really would work, I'll sign up. I would love to have the health plan Obama describes. If I felt a need for additional coverage, I am sure a private insurer will have options available to supplement me.

Obama also proposes experimenting (hooray!) in several areas to see if malpractice reform would be helpful. This is something that I already think would be helpful, for the same reasons that Obama wants to try it, and the experimentation would help prove whether it is or not. I am very happy about that.

So, there are some good ideas there, and I am excited about some of them, but I am also skeptical that it will work out as described. We definitely do need reform. Our current system is terrible. Almost any implementation of this plan would be an improvement over what we have, but I think it is likely that it will not meet expectations, and that failure will be used in the future to oppose more needed reform, and against good politicians.