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A Plea to the New Republican Majority
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Federal Rate Review?
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Redistricting
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Sir Richard Peers Out the Window
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The Spectacle Blog
I don’t know Rep. Tim Murphy (R-PA). Don’t know a thing about him. But if an article about his recent town hall meeting on health care is accurate, and if he is representative of other Congressional Republicans, it looks like they haven’t learned a damned thing over the past year of frenzied debate.
The article in The Almanac reports that “over 50 persons” showed up at a meeting on January 7, “to hear Congressman Tim Murphy speak on pending health care legislation.” But what he told these “persons” showed how out of touch he is.
He starts right out with a bang. The article by Terry Kish says, “Murphy explained that of the over $2.3 trillion spent on healthcare in America each year, about $800 billion is wasted or misused.” This is a line right from Peter Orszag, President Obama’s head of OMB. It is the underlying premise of what the Administration is trying to do on health care – eliminate all that “waste” and thereby balance the federal budget, improve care, and pay for universal health care all at the same time.
Sounds swell. Only problem is there is virtually no support for it. The estimate is based on a single study of spending on Medicare patients at the end of their lives. The researchers looked at the cheapest 10% of geographic areas, and concluded if 100% of all areas were as cheap as the lowest 10%, and if the same differences of cost were applied to the entire population, then we could save 30% of what we currently spend on health care.
There are just a few problems with the analysis:
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There are legitimate reasons that 90% of the country is more expensive than the cheapest 10%. Differences in income, ethnic make-up, and health status account for a lot of it.
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Not all payment systems are as inefficient as Medicare, especially on preventing fraud and waste. One of the reasons Medicare’s administrative costs are low is because it does little to prevent fraudulent billing. There is far more waste in Medicare than in other insurance programs.
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Elderly people at the end of their lives are not similar to the rest of the population is their use of services. End-of-life care is often heroic, expensive, and futile. There is no comparison to the routine care given to most of the population.
Now, other studies have shown that people often do not get the optimal amount of care. But they are every bit as likely to get too little care as too much. If each person got precisely the right care for their condition we could end up spending more, not less, for health care services.
This is not to say that American health care cannot be delivered far more efficiently, but the grasping for pain-free remedies amounts to wishful thinking.
Mr. Murphy is also quoted in the article as saying, “Disease management is the thing we need to be doing.” This, in spite of the evidence from thirty-five Medicare demonstration programs that disease management does not save money, and may not improve health. It is another panacea that is unsupported by any evidence. He also says, “preventative care programs would be a major cost saver.” Here again, the evidence shows just the opposite. A recent study in the journal Health Affairs was explicit – “hundreds of studies have shown that prevention usually adds to medical costs instead of reducing them.”
The article goes on to report, “Murphy said the House bill also calls for a 40 percent tax on health insurance plans above $8500 per individual or $23,000 for a family.” Actually, that “Cadillac Tax” is in the Senate bill, it is not in the House bill. One might think that a member of the House would know what is in the most controversial piece of legislation of the past 40 years.
The article also says, “The House bill does contain the choice to buy a basic health insurance plan, something Murphy compared to purchasing car insurance; people can chose the level of coverage they need. Currently, states mandate what insurance companies have to cover.” This, too, is wrong. The House bill does propose several levels of coverage but all are “comprehensive,” not “basic.” And all “mandate what insurance companies have to cover.”
Mr. Murphy forgets to mention malpractice reform as an issue he could support until he is pressed on it by a questioner. And he completely ignores the essential problem in American health care – the excessive reliance on third-party payment. In fact, he says not a word about Health Savings Accounts or consumer empowerment in the health care system.
If this is the Republican alternative to the Big Government Democrats, we are in for some pretty rough sledding this year.
View all comments (37) | Leave a comment
More Blog Posts by Greg Scandlen
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Lazy Jack | 1.17.10 @ 2:57PM
If there is such a thing as duty to a U.S. federal legislator, it should be defined as the following:
"Know what the heck you are talking about."
It is obvious that virtually none of our elected representatives have taken even a fraction of their time to understand the healthcare market or the legislation. If they were really thoughtful, legislators would be asking what massive negative affects might be caused by the $1.2 trillion (of the 2.3 trillion) already spent by the combined federal, state, and local governments every year.
Instead, we are asked to suspend disbelief and pretend that all that government largesse is neutral, at worst. Nice to know our elected representatives are comfortable phoning it in as if they are voting for a national day celebrating sausage, or some other nonsense.
Lazy Jack
For more:
http://thanksforthelaughs.word.....dchildren/
http://thanksforthelaughs.word.....onscience/
Sheila| 1.17.10 @ 3:14PM
The issue can be boiled down to one of either entitlement or personal responsibility. The seniors are screaming because they consider their subsidized cadillac care an entitlement. The college kids are screaming because they don't want to have to cut down on their bar tabs. The illegals don't really care, because they get free care anyhow and pay under the table cash for their boots and trucks and cellphones. For those few of us who pay our own way, the bills will only go up, up, up . . . no matter what plan is passed or whose ox is gored. Our elected representatives continue phoning it in because the voters have been doing so for years. Whatever happened to limiting the franchise to white male property owners?
Mark Anderson| 1.18.10 @ 12:20AM
The college students you talk about, will come out owing over $100,000 for college. We all pay our own way.
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Ran / Si Vis Pacem | 1.17.10 @ 7:44PM
Hmph. Looks like Rep. Murphy has hired 'Bob' as his numbers guy.
SoCon| 1.18.10 @ 6:23PM
Probably has Bob's 'charm', too.
Tim L. | 1.17.10 @ 9:31PM
I haven't done the research, yet venture a guess that using the bottom 10% as a benchmark would miss a significant number of points:
1. The bottom 10% likely are in places that do not have the most advanced and current medical techniques. They probably wouldn't have robotic surgery and certainly wouldn't have proton accelerators. My guess is that if one is focused on the last few days, months, years of life that the lowest cost areas result in days not years of additional life. Yet more importantly by focusing only on the last period of time, causes one to miss the significant benefits these alternative treatments provide to the bulk of the population who are not in the life's last chapter.
2. Health care costs are highly people intensive and one of the chief drivers of differences in health care costs between areas is a difference in the wage cost. To think that one can use a wage cost associated with Jackson, Mississippi to replace the cost of providing services in New York City is somewhat niave.
3. Sad that a R would miss the biggest and most important driver of reducing health care costs - that is by putting the individual in control of their own health care with the power over the dollar and not recognize the value of HSAs and HRAs.
Mary Louise| 1.17.10 @ 10:06PM
With all due respect, I'm begging you to drop the 'consumer empowerment' lingo. Please. It gives me flashbacks to TQM and LTQ training. Both of which amounted to not much more than good business and work ethic and common sense. The good thing I got from the training was an introduction to Deming.
How can health care costs be reduced? If they can't be reduced (and maybe they can't) three years down the road (maybe even sooner) we're going to be back where we are right now, providing Brown wins and the disaster of Obamacare can be averted. And not only will we be back where we are right now, the situation is likely to be more dire. With more people being unable to afford health insurance. Maybe we don't need to worry about that. Those who can't afford it will have to accept that, and do the best they can. But no one on either side seems to think that's an acceptable return cry.
In '87 I carried my own BC/BS policy. $500 deductibe, 80/20 split. Had I contracted a disease in which that 20 precent was out of my price range I would have had to live or die with the consequences. I worked in shipping and receiving at the time, $4/hr. My policy cost me $45/month. All doable. I did own a car but I left it with my parents. I walked everywhere and bused it back and forth to my folks. I was single. I had no children to feed. Anomalous.
In '58 when my parents emigrated to the States my Mom worked the late summer and winter months, and my Dad worked early spring through summer. My Dad mined sandstone in the local quarries. He made $100/wk. A bunch of hours, to be sure, but a ton of money in '58. My Mom made .90/hr. working at a canning factory. Rent was $40/month in a decent, lower-middle class neighborhood. One week's wage covered the rent. Don't know if they carried health insurance or not. But this ability to bootstrap (based solely on economic conditions) does that still exist? It's not a rhetorical question. In my area, I don't think it does, but my area isn't the whole Country.
President Obama should be defeated for having failed to grasp and understand the role that history handed him.
Greg Scandlen| 1.18.10 @ 9:27AM
Thanks, Mary Louise, but the fact is that "consumer driven health care" has been proven to lower costs and improve patient care and involvement. This is not a theory. There is evidence aplenty that it actually works, even better than many of us had predicted.
Mary Louise| 1.18.10 @ 11:00AM
Mr. Scandlen, I don't doubt that it can lower costs, but appreciably so? I've tried in vain to find how the savings from Tort Reform trickle down to the consumer. If there's data out there that I'm missing, please let me know.
In other words, can a family with an $800/mo mortage hope to see costs reduced to 20-25% of that $800? Right now in my State it costs a family about $3,000/mo to get insured. That is to purchase, in the market, as I purchased my own back in '87.
All I'm saying is that I don't think the economic conditions exist right now for a family to be able to absorb the cost of insuring itself, and I don't see interstate buying power and malpractice reform being forceful agents of market vitality.
I appreciate what you've written on this subject.
I'm perfectly willing to live in a society in which my ability to afford a certain level of insurance is what I must live with.
At some point, though, Senior Citizens are going to have to be told that the extension of their lives is not the responsibility of the taxpayer. Their children should help pay for their insurance, if they can't, not some stranger who may have to do the same for his or her parents.
A final note, you're absolutely right on the bogus claims attached to 'prevention.'
Anyway, thanks and keep posting on this subject.
Mary Louise| 1.18.10 @ 8:40PM
Mr. Scandlen, I was wrong. Family coverage begins at about $1,600 and works its way up to mid 20s depending on type of coverage.
Mary Louise| 1.17.10 @ 10:11PM
In '87 my rent (large studio) was $235/mo. in a very good neighborhood.
Mary Louise| 1.17.10 @ 10:21PM
One last thing on President Obama. Even though I think he missed an enormous opportunity to do the right things, if cuts to Medicare begin in earnest and that paves the way for reduction in entitlements, it will be to his credit. A kind of Nixon to China moment.
Too young to be president. Too ideological. Too narrow. Too bad.
Patriot| 1.18.10 @ 6:25PM
Too bad, yes--and I don't mean regret. The putz is nasty to the bone.
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Yosemeti Sam| 1.18.10 @ 12:11AM
" ... If this is the Republican alternative to the Big Government Democrats, we are in for some pretty rough sledding this year."
Either to the primaries - or to the caves.
Simple choice.
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bluecollarbytes| 1.18.10 @ 8:44AM
As politicians continue to ignore the bloated exploding appetite of govt, they somehow claim the expertise to uncover 'waste' in our private/public health care system.
As long as demand for health care is strong and growing, costs will go up. Lowering the costs seems as fantastical as "energy independence".
JP| 1.18.10 @ 9:13AM
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Bob | 1.18.10 @ 7:17PM
It's not so much that the Congressman doesn't get it, he is just lazy like 95% of the rest who want to report on the news instead of making it. I strongly disagree with your assertion that preventive care has no solid data to substantiate it's use. It depends on your definition of wellness and disease management. If you are talking about the sales promotion gimmick of large insurance companies, yes, that is a joke and has produced knowing; and never will. However, there is a small segment of us out here using employer on-site clinics and it IS working. We are doing a lot more than asking for a :paper" health risk assessment. We are drawing blood, giving understandable results back to the patient and then giving the incentive to do something about it. These procedures are inexpensive and tell much more than a retail visit to a doctor. To say that preventive care does not lower cost is VERY misleading to an uneducated public. Just as misleading as telling them that HSA's are the answer. None of these by themselves will fix this, but a correct combination of several will. There is a reason this problem has yet to be fixed. That reason? We are trying to fix the wrong problem. It cannot be fixed by selling more insurance, making bigger pools, selling across state lines...finance...finance...finance! Please explain to your readers why providers get a free pass on the current suggested cures. Explain how we know that what they charge is accurate or even based on a sound economic calculation. Present data that demonstrates the inefficiencies. Explain how a self funded account that pays 15% of their total net cost on fixed expenses can lower their 85% cost for medical care by doing any of the financing things that are being suggested. The only way to lower cost is to have proper utilization, change behavior, and get the federal and state government out of the small health delivery system.
One last thought on tort reform. Has it occurred to you that doctors don't really want tort reform? If there is no reason to run unnecessary tests it removes another profit center. Doctors and hospitals may say that they run these test to protect themselves. In reality they run them because they have an excuse and they make money...lot's of money. Now all you need is a lawyer who practices medicine.
Mary Louise| 1.18.10 @ 9:10PM
We are drawing blood, giving understandable results back to the patient and then giving the incentive to do something about it. These procedures are inexpensive and tell much more than a retail visit to a doctor.
Whatever the procedures tell us, what can you tell us about incentives producing a real, permanent change in behavior? Is there reliable information on that? It's more likely we'd get an improvement in health if a food shortage came upon us, and we had to walk again.
IIRC, Italians have higher cholesterol numbers but their good cholesterol is high. They're not huge meat eaters. Biggest meal is consumed at midday. A day without wine is unheard of. They're not milk drinkers, and sweets are not part of every large meal. They walk everyday. They buy fresh food every day. All of this is culturally anchored, no incentive is necessary.
If this is what is being touted as prevention, fine. But I don't see incentives producing long term behavior changes, at least to such a degree that they would reduce costs enough to have a decent impact.
In Italy you don't find many obese 16 year old girls. I've not seen even one.
I worked as an exercise instructor in my 20s and one thing I observed without fail was how difficult it was for my pupils to stick to their goals long term.
Mary Louise| 1.18.10 @ 9:13PM
The only way to lower cost is to have proper utilization, change behavior, and get the federal and state government out of the small health delivery system.
I agree with this. But, again, the second item, which is a big part of the plan, is unlikely to bear fruit, minus an external and inescapable impetus.