Physician: Is Single-Payer Un-American like Roads and Schools?

[FayeforCure]

I"m still not sure what the percentages mean, after all medicare actually doesn't provide any medical care it just pays for it.  Was the CBO actually comparing say medicare against HMO's (though who uses HMO's any more almost everyone has gone to ppo's)  that sort of goes with the dates  of 2003.    Or does it include the brick and mortar hospitals which have huge built in overhead?

We are talking anything that doesn't go directly into patient healthcare.

What are the administrative expenses of a government run health INSURANCE system vs a private for-profit run INSURANCE system.

In both cases we have for profit hospitals and physicians, so there is no difference there and btw those costs would be considered patient care costs.

Administrative costs are less than 2-3% for Medicare. Far more efficient than the patchwork of private insurance companies that pay lots of employees to shuffle paper work to delay, deny and rescind coverage in order to maximize profits. Remember one-third of all claims are initially denied.

Any pay-outs are considered losses to their business.

[FayeforCure]

The problem with Medicare these days is that they outsource their insurance to private insurers in the form of Medicare Advantage Plans. These plans as we've seen are over 15% more expensive, and have exhibited the same business practice of "delay, deny and Deceit" that we see with many other for -profit insurers.

As an economist, I know healthcare is NOT a commodity that can be traded on the free market. Here are some of the consequences from Medicare outsourcing their insurance administration to private insurers:

January 14, 2009 10:04 AM
WellPoint Gets in Trouble with Medicare
Journalists should jump on this story ASAP

By Trudy Lieberman

Single Page Print Email Comments Digg Facebook Reddit StumbleUpon Delicious It’s not everyday that the Centers for Medicare and Medicaid Services (CMS) cracks down hard on one of its clients; that is, one of the private insurance companies Congress allowed and encouraged to provide benefits to Medicare recipients. Bloomberg News published a story Monday that told a sorry tale of the country’s second largest insurance carrier (revenue-wise) and how it treated seniors who depend on coverage from the company to pay for their drugs. CMS gave Bloomberg a copy of the letter it sent to WellPoint which said the carrier has “demonstrated a longstanding and persistent failure to comply with CMS’ requirements for proper administration of its Medicare Advantage Prescription Drug Plans (MA-PD) and Prescription Drug Plans (PDP).”

The letter went on to say that the noncompliance has resulted in thousands of Medicare beneficiaries being denied access to “critical medications” that included cardiac drugs, anti-seizure drugs, anti-clogging drugs as well as medicine for asthma and chronic obstructive pulmonary disease. “WellPoint failed to follow through on its assurances to CMS that the problem was immediately and fully corrected,” the letter explained. CMS spokesman Peter Ashkenaz told me that the Medicare regulator had gotten a spike in complaints from WellPoint customers last week when new drug plans took effect. In December, he said, the agency received “under 100 complaints” and in the first week in January “we had more than 500. People were not getting their drugs.”

So the agency slapped a penalty on the carrier: effective immediately, it cannot market Medicare Part D plans, which provide pharmaceutical benefits to seniors, nor can it enroll new plan members. Even though the general Part D open enrollment season just ended, carriers can still sign up seniors with low incomes and people turning 65 who need to find a drug plan. Seniors enrolled in the controversial Medicare Advantage plans whose sellers are being overpaid by the federal government, can still switch plans until the end of March. So it’s fair to say the sanctions are likely to pinch WellPoint’s profits. WellPoint said in a statement that it had made significant progress in addressing problems cited by CMS and that since it had been working with the agency, it was “surprised by this recent action.”

Not many reporters cover insurance these days. But this is a good story, as Bloomberg knows, and a good company to keep an eye on. There are several ways to go. There are the usual business stories that quote stock analysts lamenting a fall in the company’s share price. The Bloomberg story went there. Carl McDonald, an analyst at Oppenheimer & Co., told Bloomberg that the CMS sanctions are “definitely not a good thing.” Then there’s the consumer story which tells people what to do. Bloomberg pointed out that people can stay with the carrier, or if they choose to drop out, they can call 1-800-Medicare and ask about a special enrollment period to select a new plan by the end of the month.

Much less transparent to journalists is the health reform story and where WellPoint fits in. The insurer is a lobbying force. It helped to defeat Gov. Arnold Schwarzeneggar’s health reform drive in California in 2007 with a series of TV ads raising doubts about the plan, and it was prepared to spend millions to keep reform from happening. WellPoint has staked out a lucrative market selling bare bones policies, the kind that many politicians see as the solution for covering everyone. ( this is referred to as "junk" insurance that will still lead to bankruptcies for millions of Americans if they have the misfortune of a serious medical event)

It could benefit handsomely from many of the reform proposals now on the table if they require people to buy health coverage from private insurers.

In case you think WellPoint is alone in designing questionable insurance practices, take note. Yesterday the nation’s biggest carrier UnitedHealth Group agreed to pay a $50 million settlement after New York attorney general Andrew Cuomo accused the insurers of overcharging millions of customers when a research firm owned by United manipulated the numbers so that the carrier underpaid policyholders when they filed claims.

Said Cuomo: “This is a huge scam that affected hundreds of millions of Americans who were ripped off by their health insurance companies.”

All this should prompt reporters to investigate whether these kinds of insurance shenanigans are what Americans prefer when they say they want universal coverage. For example, what will prevent WellPoint from continuing the same practices for policyholders under 65 that CMS has said it engaged in for seniors on Medicare?

What will stop insurers from paying as little as possible and shoving more costs of medical care onto unsuspecting policyholders?

And while they’re at it, a hard look at whether regulation can really discourage such practices is in order.

Remember, the president-elect said during the campaign that he would tightly regulate health insurance. The case of WellPoint and UnitedHealth Group invites scrutiny of this campaign promise.

http://www.cjr.org/campaign_desk/wellpoint_gets_in_trouble_with.php

[civil42806]

I"m still not sure what the percentages mean, after all medicare actually doesn't provide any medical care it just pays for it.  Was the CBO actually comparing say medicare against HMO's (though who uses HMO's any more almost everyone has gone to ppo's)  that sort of goes with the dates  of 2003.    Or does it include the brick and mortar hospitals which have huge built in overhead?

We are talking anything that doesn't go directly into patient healthcare.

What are the administrative expenses of a government run health INSURANCE system vs a private for-profit run INSURANCE system.

In both cases we have for profit hospitals and physicians, so there is no difference there and btw those costs would be considered patient care costs.

Administrative costs are less than 2-3% for Medicare. Far more efficient than the patchwork of private insurance companies that pay lots of employees to shuffle paper work to delay, deny and rescind coverage in order to maximize profits. Remember one-third of all claims are initially denied.

Any pay-outs are considered losses to their business.

"We are talking anything that doesn't go directly into patient healthcare."

What does that mean?  Sorry but overhead in the real world has a specific meaning as i have explained before.  Over head means anything that does not directly affect the patient. What I mean is that imagine a hospital, the brick and mortar is all overhead.  That amount is spread over the years , means the day to day operation, the secretaries, the welcoming group at the hospitals, the accounting groups.  The folks that process the insurance claims.  Means the brick an mortar costs of electricity and water.  The true costs only count against the doctors, nurses and the people that actually lay hands on the patient.  Sorry but that greatly exceeds 2 to 3 percent.   And upon reflection I'm not going to be nice and let you off, if you quote lyndon lourche you deserve derision.

[civil42806]

OK let's stick to what the CBO, the Congressional Budget Office says:

CBO’s comments on the overhead (administrative) cost issue are completely consistent with what we know about this issue. At the beginning of its comments on overhead costs, CBO noted that Medicare’s overhead costs are lower than those of private plans. I quote these remarks below. Note that in these remarks CBO says Medicare’s overhead is 1.5% of expenditures, not 3% or “less than 5%” nor any other number. You’ll see that CBO says “large employers’ plans” allocate about 7% of total expenditures to administration. That means that large employers who self-insure are paying out about 7%. The overhead of insurance companies is far higher, around 20%. Here is the quote:
“The share of costs in the fee-for-service Medicare program that are devoted to administration (about 1.5 percent) is lower than the share observed for large employers’ plans, whose administrative costs average about 7 percent of premiums…. To some extent, those differences reflect both the characteristics of the Medicare population and the unique features of the program. Differences in current administrative costs between Medicare and private insurers partly reflect differences in the tasks that each performs. Medicare has little need to advertise or seek out enrollees because eligible individuals are usually enrolled by default on the basis of Social Security records, which determine their eligibility. By contrast, private health plans need to establish and solidify their market presence and must compete with each other for enrollees and for employers as clients, generating costs for advertising, marketing, and sales. Further, Medicare does not employ many of the cost-management techniques used in the private sector, such as conducting utilization reviews or requiring prior administrative authorization for tests or procedures…. Another source of the difference in administrative costs between private insurers and Medicare is that private insurers retain profits.

http://www.mnhealthplan.org/img/medicarecompete.doc

You can find the entire Dec., 2008 CBO report here:

http://www.cbo.gov/doc.cfm?index=9925

Naahhhhh if your foolish enought to quote him, have the guts to stand by him

[BridgeTroll]

Wow... Faye...  Just when you are beginning to gain credibility... Lyndon freeking LaRouche???

This guy is a first class, certifiable nut job.  He is proof even a broken clock is correct twice a day...

From the website you cited...

http://www.larouchepac.com/health

Dragging Their Feet for Hitler

by Lyndon H. LaRouche, Jr.


May 18, 2009 (LPAC)--During the past days, President Barack Obama has announced his intention to enact a health-care policy which is, in effect, his carbon copy of the infamous Adolf Hitler proclamation of September 1939 on the subject of "lives not worthy to be lived." That utterance by President Obama is the most extreme step in the direction of Hitler-like fascist dictatorship we have heard from him so far, but, for those who have following Obama's politics since his meeting with Queen Elizabeth II and her pro-genocidal consort Prince Philip, Obama's public echo of the infamous words of Adolf Hitler is completely consistent with the direction against which I warned in my international webcasts of both April 11th and April 28th....

[FayeforCure]

Lyndon freeking LaRouche???

This guy is a first class, certifiable nut job.  He is proof even a broken clock is correct twice a day...

I completely agree with you,......he is a complete and utter nutcase.

I usually quote from Physicians for a National Healthcare Program:

http://www.pnhp.org/facts/singlepayer_faq.php

Even so, I only quoted the parts that made sense in my previous quote.


In particular I quoted the New England Journal of medicine study which he referred to.

Here is the latest from the New England Journal of Medicine about the proposed voluntary costs reductions that would curtail the growth in nationwide healthcare costs by 1.5%:

So how might physicians help us all "get to yes"? The first step is to acknowledge that delivery-system reform offers a potential winâ€"win situation for providers. Physicians should support and help to develop integrated systems of care. Integration pioneers that have arranged new, population-based payment models â€" such as the Geisinger Health System in Pennsylvania â€" have achieved substantial savings while preserving generous net incomes for physicians and hospitals.3,4 Such integrated systems also have strong incentives to invest in primary care.

The second step is for physicians to recognize that achieving savings sufficient to cover the cost of expanded coverage need not impose a hardship on patients or providers. A 1.5-percentage-point reduction would still allow spending â€" and thus the total incomes of providers â€" to rise from $2.6 trillion in 2010 (17.7% of the gross domestic product [GDP]) to $4.3 trillion in 2020 (18.5% of the GDP). But because of the miracle of compounding, a "1-percent solution" that reduced the growth in annual spending from 6.7% to 5.2% could save the health care system $3.1 trillion of the $40 trillion we are currently projected to spend between 2010 and 2020, according to the Lewin Group.

If health care providers and suppliers could actually achieve this reduction in growth rates, the federal government would harvest about $1.1 trillion in savings over the 11-year period â€" enough, perhaps, to close the deal on affordable health insurance for all. Others would also see savings: $497 billion for employers, $529 billion for state and local governments, and $671 billion for households. One simple way for physicians to start contributing to this goal is by reassessing and scaling back, where appropriate, their use of clinical practices now listed as "overused" by the National Quality Forum's National Priorities Partnership.5 Ideally, providers would also agree to slow fee increases for private payers further, allowing Medicare to catch up.

That is far more substantial than I thought!

But I agree with NEJM on this:

The Congressional Budget Office, however, is unlikely to score as savings purely voluntary restraints on price increases. It may therefore be necessary to set a legislative target for the growth of spending at 1.5 percentage points below currently projected increases and to grant the federal government the authority to reduce updates in Medicare fees if the target is exceeded. These moves would guarantee near-term budget savings while building a foundation for fundamental payment reform.

Ultimately, we believe that the United States can reduce its per capita health care costs â€" without harming patients â€" by much more than the proposed 1.5-percentage-point reductions in growth would shrink them. But let's make that deal stick. Physicians can become our most credible and effective leaders of progress toward a new world of coordinated, sensible, outcome-oriented care in which they and their communities will be far better off. Defending the status quo is a bankrupt plan, and physicians have an opportunity to help us all see beyond it.