Wednesday, December 9, 2009

Open enrollment

Yesterday we had our annual open enrollment meeting at work wherein our benefit options for 2010 were described to us. The health insurance portion of this meeting was presented by Sarah Palin. OK, it wasn't really her, but it may as well have been. Consider this woman's qualifications for her job:
  • Nice hair
  • Nice shoes
  • Attractive figure
  • Expensive wardrobe
  • Room temperature IQ
  • Fancy manicure featuring an accent nail on the fourth finger of each hand
Here are a few of the gems from her presentation: regarding the high-deductible option for which she is the subject matter expert, she said "after my husband explained it to me...." She also indicated she was no longer "so apt to just run to the ER." When indicating the number of physicians in the network, she responded with "almost all of them." This wasn't enough for the engineers, so they pressed her for a number, and she finally came up with 80%. Wow. 80% = almost all. Wonder if I could get away with paying almost all of my mortgage each month. I know I wouldn't be happy if all I got was almost all of my paycheck.

Of course there are those who like and even claim to admire Sarah Palin. I'm sure almost all of them either want to sleep with her or are simply mesmerized by the train wreck that happens almost all the times she opens her mouth.

When you consider that Sarah Palin was the best the Republicans could come up with as a Vice Presidential nominee, it should come as no surprise that we can't seem to make any meaningful progress on healthcare reform.

If I were emperor of the universe and didn't have to worry about breaking a filibuster, this is what I'd do.
  1. Single payer system. Critics say it's socialized and that it would require higher taxes. My response to that: so what? Healthcare is already almost socialized because between medicare, medicaid, and government employees, the government is the defacto provider for so many. Why not finish the deal? The fear mongers who claim that we in the United States have the highest quality of care are full of it. And we pay twice as much for the average quality care we receive. Taxes would need to be raised, but between my contribution and my employer's, several times what I pay in Federal Taxes is going to health insurance premiums. I would gladly pay more in taxes if those premiums went away.
  2. Turn patients into consumers. Most of us have no idea how much treatment costs or why we're getting it. Physicians charge us for it, and we have no idea what it is or why it costs that much. We need to educate ourselves about treatment options and pursue those that are most cost-effective. To do this, we need to have some skin in the game. Which is why my single payer system would have a high deductible. Everyone would be required to have health savings accounts to cover up to that deductible amount. The HSA's would be just like what's available today--contributions accrue on a tax-deferred basis and can be withdrawn tax free when used for qualified expenses. If you're healthy and take care of yourself, that HSA money could be saved for retirement, education, or similar. If you're not healthy, you're going to have to pay more and those dollars won't accrue.
  3. Reduce the cost of care. First step for this is real incentives for healthy living. The high-deductible plan described above is a good first step. Along with that, a system of credits for people who make healthy lifestyle choices and/or penalties for those who don't. We as a country are eating ourselves to death. Obesity, tobacco use, and drug abuse increase the overall cost of care and should be born proportionally. Next step is tort reform. I recognize that if a doctor screws up, common sense dictates he or she should be accountable to make the person whole. But punitive damages do nothing but cost all of us more money as doctors are forced to pay more for malpractice insurance. Ain't no such thing as a free lunch, so let's stop giving one to the litigious. Finally, a single payer system where all providers are paid the same for a given procedure and the overhead associated with insurance companies is reduced, if run properly, will lower the overall cost of care.
I realize my approach is too straightforward and logical for anyone in Washington to ever take it seriously, and that the insurance lobby would have me fit up with some concrete galoshes if I were a Congressman who put it forward and got any real momentum. But like I said, this is if I were emperor of the universe, not yet another self-indulgent blogger who makes way less money and has far less power than the idiots he self-righteously derides.


  1. i expect you will be receiving a visit from some of our mutual libertarian friends. I hope so.....

  2. If I were a bigger cynic, I would say health care proposals are just a way for congress to extort more bribes (oh sorry, campaign contributions)from the medical industry every few years, while they do exactly NOTHING! Your health care premiums pay for these bribes! Meanwhile the % of GDP we spend on health care is by far the highest...and many still have no coverage!??! SOMEBODY is making lots of $$ off this mess!

  3. Right on. Great, clear post. And don't be fooled by labels. Anyone who supports the current, feudalistic cartel system of health insurance, which stifles and suffocates small business and entrepreneurship, is no "libertarian."

    This stuff isn't rocket science- all these other crappy little countries have figured it out- we can too.

    Instead of just saying "no" all the time, I wish the guys we keep sending back to office decade after decade could take a break from writing Christmas/Hanukkah carols long enough to actually try to do something about healthcare...

  4. You pretty much nailed it. The system we have keeps the lower class down by having more people less able to access medical care and those who do but can't afford it end up filing for bankruptcy (the #1 cause of bankruptcy is medical bills). If health care were treated more like education, it would improve workplace performance.

    However, I disagree with the med mal punitive damages part. It is extremely rare to get punitive damages in these cases. The bulk of damages awarded are for pain and suffering and future lost income. Many states have passed "tort reform" which substantially restricts awards for damages. However, health costs in those states went up at the same rate as other states that had no "tort reform". In other words, "tort reform" has had no impact on rising costs. But health insurance companies sure love it!

  5. In the "Why not Standard Pricing?" section of his column,( ) Gregg Easterbrook wrote some really good stuff that you echo in your post. I really like the idea of insurance for catastrophes and out of pocket for "maintenance." I think that would go along way into curbing the escalation of health care costs. I mean, something has got to give sooner or later.

  6. i should mention that my only relation to libertarian is the lib.

  7. This is a great post. What makes it great is the fact that I couldn't determine your political classification. (Are you a John Stewart or a Steve Colbert? Don't answer that. It's more exciting not to know. But then you threw in the reference to your Libertarian "friends" so now you could even be a John Stossel.) This must mean you have principles that are based on principles instead of principles based on group affiliation. Or something like that.

    I don't know if I agree with you on the primary payer option because I like choice and when making a choice I like many options. One payer might mean the medical industry has one customer for they only need to make the people paying happy. Maybe... not sure about that. The other two issues, however I agree with.

    There's always the argument (which I don't necessarily buy) that if maintenance type stuff is not covered, people won't pay for maintenance type stuff. Then health care costs will go up because people aren't initiating prevention or early detection on their own.

    Good food fer thought. If you decide to run for office I'll put a sign in my yard. But then again that might not be a good idea because every sign I've put in my yard has lost.

    Incidentally, I think those open enrollment meetings are a joke. Did you get the freshly printed and designed graphs and charts and booklets that cost more than a heart transplant? They honestly could save a life with what they save by not printing that stuff.

    Anyway. Sorry about the book.

  8. when you get it, acquire it, or conquer it (not sure how one actually becomes emperor of the universe) - i would like to come live there.

  9. I'm with you an every point.

    Walter - I have a hard time believing that nation-wide tort reform won't reduce costs. Why else have malpractice premiums risen so dramatically?

  10. I almost commented on the “tort reform” issue in my earlier comment, but held off. But since Kris and Walter brought it up, here’s where I come down:

    First, “tort reform” is kind of a misnomer. Medical malpractice reform is just one part of “tort reform” which would apply to all kinds of accidental injuries or damages unrelated to medical malpractice. So I think it’s important not to make decisions about the broader issue of tort reform with just medical malpractice in mind, because it’s a much bigger issue.

    Second, while medical malpractice reform is certainly worth debate and consideration, it’s a drop in the bucket. Last year in the US, out of $2.3 trillion spent on healthcare, $3.6 billion was awarded by juries in malpractice cases. Malpractice insurance spending varies by specialty, but is in all cases below 10% of total revenues, and generally more like 1-3%. Meaning that if you eliminated medical malpractice insurance and cases altogether- not reform, but elimination- you’d cut total medical costs by maybe something like 5%.

    In the absence of comprehensive insurance reform, there’s no mechanism to pass any of those savings on to consumers. I don’t have any problem with companies making greater profits, but there’s no necessary connection between malpractice-related cost-savings and more affordable premiums.

    But my biggest concern about “tort reform” is that it’s so often touted by the right as a meaningful reform alternative in its own right, which it isn’t. It may- in some form- be a cost-saving component of a broader reform, but it does nothing to make coverage accessible to the unemployed/ underemployed and/or those with pre-existing conditions, nor does it stem the tide of medical-related bankruptcies.

    OK, I’ve rattled on long enough- sorry.

  11. Watcher, you've made many good points. From 1986 to 2005 (couldn't find study after 2005), medical tort reform has been enacted in many states. 38 states restrict punitive damages and 23 states limit non-economic damages (i.e. pain & suffering). However, despite these restrictions on damages, health care costs (and insurance premiums) were not affected in these states. Studies have shown that medical malpractice claims make up only 1% of health care costs. If all these states actually reduced health care costs (and insurance premiums) by these tort reforms, everyone would jump on it. But, it hasn't. I've lived in 2 states over the last 10 years that have enacted limitations on damages - my health insurance went up at the same rate as the rest of the nation.

    BTW, doctor med mal premiums also does not seem to be affected in states with existing med mal tort reform. Of course, there are a myriad of reasons, including that insurance companies have taken a beating on their investments.

    Sorry Watcher, but I would focus just on med mal for discussion of health care reform. I don't think tort reform as it applies to other types of torts (such as car accidents) have much impact on health care costs. It does impact individuals, businesses and insurance companies, though, through car and business liability insurance, just not health care insurance.

    OK, now I've rattled too long.

  12. Great comments. Walter & Watcher, thanks for the info on tort reform. I admit I didn't study that aspect at all, I'd just heard it so much in the news, I assumed the costs had to be real. Now I'm even more embittered that costs are so high given that what we've been led to believe is such a major component isn't.

    Rabid Runner, to your point about not wanting single payer because you like choice--do you have a choice now? My company offers one insurance company option. I wouldn't say I have choice at the moment. Providers are already all billing medicare and glad to have that business. I don't see how single payer for all would change quality of care.

  13. Okay, now that I see Alex and Walter's comments in context, I totally agree with both of them. Tort reform would not significantly impact health care costs IMO.

    It would probably impact my personal bottom line, however, so I am not unbiased towards it.

    Another interesting tidbit about med mal is that (IIRC) something line 85-90% of trials find for the defendant. So unless the doc is grievously negligent, or keeps poor records, the likelihood of losing the case is low. In which case, only the lawyers have gained anything. For the injured person, it is hit or miss, big payoff or nothing.

    Better than insurance would be a fund that all providers contributed towards. If an injury/problem occurred, the person could apply to that fund for no fault compensation. Professional evaluators of some sort would decide if/what amount of compensation was appropriate. The folks running this fund must have zero profit motive. Just a thought.