One reason why we’re concerned about the expansion of government health care is that occasionally decisions are made that compromise our commitment to life.  Here’s one such story from England:

Premature baby ‘left to die’ by doctors after mother gives birth just two days before 22-week care limit | Mail Online
Doctors left a premature baby to die because he was born two days too early, his devastated mother claimed yesterday.

Insurers ranked on payment records – The Boston Globe
Physicians in Massachusetts got paid in an average of 22.8 days by Blue Cross-Blue Shield, 32.8 days by Tufts, 39.7 days by Harvard Pilgrim Health Care, 42 days by Fallon Community Health Plan, and 56 days by MassHealth, according to the Athenahealth ranking of days claims spent in accounts receivable.

On its ranking of “denial rates,” the percentage of claims rejected or sent back for rework, Tufts denied 4.9 percent, Harvard Pilgrim 5.4 percent, Fallon 5.7 percent, Blue Cross-Blue Shield 6.2 percent, and MassHealth 23.8 percent.

Representatives of the Massachusetts Executive Office of Health and Human Services, which oversees MassHealth, didn’t return phone calls yesterday.

A good example from the Boston Globe why the public option isn’t better for patients and medical providers.  The Massachusetts Medicaid program, MassHealth, paid considerably slower than any private payers to the providers, and denied a significantlh higher % of claims, as the graph below shows.  A public option will slow the payment structure down and make providers have a harder time keeping running, leading to indirect rationing.

HT:  Patient Power

The most controversial piece of the Kennedy/Dodd bill, now being marked up by the Senate HELP committee is the “public option” that many congress members are insisting be a part of health care reform.   SEIU recently linked to a [warning pdf link follows] survey done by the Wall St. Journal and NBC on a myriad of issues, with SEIU claiming that “76% of Americans support public health insurance option.”

I went to the survey this morning and had to get to page 21 of the results to get to this alleged 76% support of public insurance.  Here’s the question that was asked:

In any health care proposal, how  important do you  feel  it  is  to give people a choice of both a public plan administered by the federal government and a private plan for their health insurance––extremely important, quite important, not that important, or not at all important?

76% of respondants did answer “extremely important” or “quite important.”  Note the key word in the question though:  the touchy/feely word “choice.”   Giving people a choice is what 76% of those surveyed are in favor of–not the public plan in general.  I believe that if you asked “How important do you feel it is to give people a choice of both an employer provided plan and a private plan that employees own that isn’t tied to their jobs” you’d get at least as high of an answer.

American people want choices.  And nothing in that question even implies that the public option will limit choices, even over time.

Why do I say that the numbers on this question are skewed because of the word choice?  Here’s a question asked just a bit later:

Please tell me which ONE statement you agree with more on the issue of creating a new public health plan administered by the federal government.

(Some/Other) people say it would help lower health care costs because it would compete with private health  plans.   This new public plan would provide coverage  for  the uninsured and all Americans would have an option for quality affordable health care.

(Some/Other)  people  say  that  patients might  not  always  have  access  to  their  choice  of  doctors  and  the government would  lower  costs by limiting medical treatment options  and decisions that should be made instead by patients and doctors.

Note first that this is not necessarily a true dichotomy.  Someone could believe both of these statements are true, and to some degree I’d argue that they both are true.  But when asked to choose, 42% chose the second option, that the public option would limit choices that “should be made instead by patients and doctors.”  So 42% (much more than the 24% who aren’t allegedly clamoring for this plan in the first place) believe that the government is going to supersede doctors in the public option.

The Obama administration says it wants to “keep insurance companies honest.”  And to do that, they’re going to set up a plan which will force, by law, doctors to accept Medicare+10% as a non-negotiable fee structure, while the insurance companies  have to negotiate prices with the doctors that allow providers to make money.  On the other end of the transaction, insurance companies have to charge enough to balance their books, while the government can set premiums that are subsidized by the taxpayers.  So in this schema, “keeping the insurance companies honest” = charging less than they can afford and paying less to doctors, further driving up the cost of private insurance and then allowing it to cascade upon itself.

Under this schema the public option will quckly become the only option.

Health care sharing ministries are a non-insurance option for health care, which means that we’re not the biggest fans of the insurance companies.  But the insurance companies are not being dishonest. They are serving their customers the best they know how in order to keep their customers.

The problem isn’t that they’re dishonest.  The problem is that we’ve set up a system where they’re working for the wrong customer.  If insurance were privately held, rather than an employer benefit, the customers would do all the work necessary to “keep the insurers honest.”  But because the patient is an afterthought in the employer provided model and has ownership over almost no decisions, the system is broken.

But it won’t be fixed by driving the private market out of business.  It needs to be fixed by putting the patient back at the center of the transaction.  And patient centered health options like HSAs and health care sharing ministries are much better ways to do that than a “public option” that quickly becomes the “only option.”  We need more choices, not fewer, and as the survey indicates, a public option will give us fewer choices.

Better for Congress to swallow the hard pill and figure out a way to level the tax policy playing field for all health care expenses, whether provided by employers or not.  Whether insurance or not.  Either eliminate the tax deduction for employer provided insurance, or provide the same tax deduction for all health care expenses, even those paid for with cash out of pocket.

At that point, when the patient is at the center of the health care world, both providers and third party payers will be kept honest by the one who they’re actually working for:  the patient.  And the patient will get the best quality care for the lowest cost.

So Congress–keep the insurers honest!  Don’t pass the public option.  Don’t mandate purchase of products.  Change the tax policy so all health care is treated equally, and let the patients reform the system from the bottom up.

Here’s hoping for patient centered health reform!

A.M.A. Opposes Government-Sponsored Health Plan – NYTimes.com
The opposition, which comes as Mr. Obama prepares to address the powerful doctors’ group on Monday in Chicago, could be a major hurdle for advocates of a public insurance plan. The A.M.A., with about 250,000 members, is America’s largest physician organization.

While committed to the goal of affordable health insurance for all, the association had said in a general statement of principles that health services should be “provided through private markets, as they are currently.” It is now reacting, for the first time, to specific legislative proposals being drafted by Congress.

This should be good news for those joining in opposition against an expansion of government and a further limiting of freedom in the health care industry.  The AMA opposing a government competing “option” will help the opposition to the plan, and be better for patients.

I wrote the other day about a new study released by Families USA regarding the cost of the uninsured to the insured.  The study has an ulterior motive, as I mentioned.

Another mention of the study by Anne Zieger mentions the cost to the insured, estimated at over $1000 per year per family because,

According to the group, the uninsured received $116 billion in care from doctors, hospitals and other providers in 2008, $42.7 billion of which was never paid for. Providers then raised prices to insurers to cover these costs, and insurers, in turn, charged higher premiums, the group says.

What is not so funny here is that Ms. Zieger, less than a year ago wrote another article on the cost of the uninsured which includes this gem:

 Despite these burdens, cost-shifting to the insured to pay for uncompensated care has a very minor impact on private insurance premiums, hitting 1.7 percent at most, the researchers conclude. Hospitals, they found, don’t raise prices to private health plans to offset uncompensated care, which has stayed stable at about 6 percent of hospital costs for many years despite an ongoing increase in the percentage of people insured.

Why the change in focus?  Well health care reform is coming, of course!  And note this:  “1.7% at most” is the impact of the unpaid care by the uninsured.  So when the rhetoric heats up, and the blaming the uninsured starts remember this:

• Every industry has shrinkage.  When you buy a shirt at Target it has a higher cost because of theft and waste in the industry.  1.7% is a negligible cost for uncompensated care.
• That is not to mention the uninsured who are paying for their health care at increased rates, sometimes 3 to 5 times what insurance companies pay for same services (cost shifting to the uninsured?)
• And the kicker:  neither article, nor the public rhetoric of the mainstream media ever include the cost shifting from already existing government programs, which is over 10%.

So who’s to blame for high insurance premiums?  Certainly the uninsured who are not paying their bills (in stark contrast to health care sharing ministry members!) should be held accountable for their costs, but the overwhelming winner here is the cost shifting that is going on from Medicare and Medicaid.  That problem will not be solved by more government programs that shift more costs to the private sector.

Oh and that 10% number?  I don’t believe it includes the payroll tax that helps pay for the services in the first place.

The uninsured are not a problem in the health care crisis.  Certainly not one that private charity can’t solve on its own.  So don’t lose sight of the real numbers in this public battle.

U.S. group finds insured paying more for uninsured | Markets | Markets News | Reuters
U.S. families with health insurance are paying an estimated $1,017 more in annual premiums to compensate providers for healthcare to the uninsured, a report released on Thursday said. The report by Families USA, a healthcare reform advocacy group, said doctors, hospitals and other health providers try to recover the cost of uncompensated care by increasing charges for those with private insurance.

Note four things about this study and article:

1. no mention of the overpriced services paid for by the uninsured who paid their bills (3 to 5x what insured pay for same)
2. no mention of government entitlement cost shifting which dwarfs this shift $10 for ever $1.
3. note that the study is performed by Families USA a well known advocate of government run health care.
4. there is also no mention of the cost of insurance being driven up by overconsumption by the insured, which also dwarfs any cost shifting from the uninsured.

The uninsured aren’t the problem. The government entitlements that are out of control are driving the costs, and employer provided insurance further complicates the mess. Don’t give more of it to the government.

For more on the non-problem of the uninsured, see John Graham’s excellent article, Don’t Blame the Uninsured.

Shortage of Doctors an Obstacle to Obama Goals – NYTimes.com
The officials said they were particularly concerned about shortages of primary care providers who are the main source of health care for most Americans.One proposal — to increase Medicare payments to general practitioners, at the expense of high-paid specialists — has touched off a lobbying fight.

Family doctors and internists are pressing Congress for an increase in their Medicare payments. But medical specialists are lobbying against any change that would cut their reimbursements. Congress, the specialists say, should find additional money to pay for primary care and should not redistribute dollars among doctors — a difficult argument at a time of huge budget deficits.

This article notices implicitly that it is the Medicare reimbursement for primary care doctors that is causing the shortage.  The government cannot control the supply of health care services–in particular the skilled labor of physicians.  Citizens have to want to enter into the long educational track to be a doctor, and the reward (above average salaries) at the end is part of the reason so many in the past chose to be doctors.

But the hours, the pay, and the Medicare dollars are better for specialists, so given the choice most students have opted against primary care.  And passing a health care reform that banks on people getting access to doctors (some of whom will retire if forced into a government run system) when there are no doctors is problematic.

There are market based solutions to this problem.  Patient centered health solutions like HSAs and Health Care Sharing Ministries put the doctor and patient at the price point, rather than a third party payer or government agency.  Retainer based medicine (aka concierge care) allows patients to contract with doctors for primary care, ensuring good preventative care while preserving the doctor/patient relationship.

The government is the problem in health care–and the solution we’re being sold is more of the problem.  We need more market based initiatives if we want to see quality go up, supply go up, and prices go down.  And simply raising the Medicare reimbursement rate for PCPs will be too slow and certainly a non-market solution that will lead to some other shortage.

This is where indirect rationing comes into play–which is the the more likely source of rationing from the governmentin the near future.  Direct rationing is where the government tells you you can’t have something.  Indirect rationing is where the government fixes the prices so low that supply falls away.  The latter, I believe, is more dangerous because it works slowly and is almost always unanticipated just as this PCP shortage is.

Solution?  As always it’s to get the government out of health care.

HT:  John Goodman

The accusation is that the uninsured (which includes HCSM members, btw, that pay near list price for medical services) cost-shift to the insured and that this cost-shifting drives up the cost of health insurance.

It certainly may–though I’m not convinced that there is cost shifting as a group (considering both the uninsured deadbeats and the uninsured paying list price for services altogether) –but if it does, this study from AHIP (note this is a PDF) shows that it pales in comparison to the cost shifting due to Medicare and Medicaid by a factor of 5.  Medicare/Medicaid actually increase the price for other patients by 18%.

When was the last time you heard about cost-shifting due to government programs listed as one of the problems we need to solve with the coming health care “reforms?”

Just one of the good data quotes:

When broken down, we estimate the cost shift adds $1,512 annually, or 10.6%, to the premium of a family of four.  Of this cost shift amount, we estimate employers pay $1,115 and subscribers $397 annually.  The cost shift also increases member cost sharing by approximately $276 annually.

Yet again, this shows why private charity is better, and that the uninsured are not the problem.   We need to keep an eye on the reforms that are coming out of congress, because a government sponsored insurance plan (one of the more popular ideas right now) will only exacerbate this problem and further drive up costs for employers and private market payers, like cash patients including HCSM members.

HT:  Greg Scandlen via NCPA blog

GOP stumbling in health care fight – Carrie Budoff Brown – POLITICO.comThere’s no Republican plan yet. No Republicans leading the charge who have coalesced the party behind them. Their message is still vague and unformed. Their natural allies among insurers, drug makers and doctors remain at the negotiating table with the Democrats.

The Alliance of Health Care Sharing Ministries is a non-partisan organization.  The quote above demonstrates that there are partisan divides over how best to “solve” the health care “crisis.”

Whenever the federal government addresses itself to a problem it is important for us, the citizens, to look closely at the situation and determine exactly what caused the problem.  All too often the “solutions” that we see coming from the federal corridor are patches that are addressing problems that previous “solutions” caused.

The democrats have clear plans that they’re offering right now–and they’re well defined and able to be spoken of in small soundbites and marketed that way.  You can see more about those plans, and the harm they’re doing at the Do No Harm Petition.   All that’s left is for them to decide which of these ingredients will be in the final plan and introduce the bill.

The Republicans, as the article amply points out, have no set solution.  Part of the reason for this is that it’s hard to market a solution that is merely an undoing of previous “solutions.”

Here is part of what needs to be done:

If the health care debate is going to be solved and completed, we need to move past the myth that coverage=health care. Insurance coverage is not health care. Health care is the services that doctors provide. Health care is people working to improve the health of others. And this works best in the context of personal liberty.

A five point plan to reduce the cost of health care quickly:

• Reduce the scope of the FDA. Allow Americans who want to (with appropriate disclaimers provided) try experimental treatments/medicines. The FDA is not a catch all, and we need to move past the era where no one gets well without government permission. Doctors should be held accountable, but shouldn’t be tied to whatever research the government has approved–the government will always be slower than the private market, and health care needs to be de-politicized.
• Eliminate the favored treatment in the tax code of employer provided insurance. This can be done most simply by taxing the benefit, but many way of equalizing the treatment of health care costs in the tax code. That if you buy insurance by yourself you deduct only from Fed W/H, and only above 7.5% of AGI, and that if you get it through your employer it’s tax free, even with respect to FICA provides horribly perverse incentives in health care spending.
• Deregulate the insurance market as much as possible. 10-30% of health insurance costs come from state and federal mandates
• Give incentives to doctors and hospitals to provide non-governmental charitable care. Not through direct funding (like Medicare/Medicaid) but through using private charity. The Arizona system of non-refundable tax credits for charitable donations to organizations that replace the work of government is a great way to do this. We need to wean our providers of Medicare before it goes broke.
• Open the way for consumer directed health care, both religious and not (like Health Care Sharing Ministries) that re-engages the consumer in the health care decision, moves the third party to the side, and protects the doctor/patient relationship while restoring objective cost measures to the industry.

These 5 points are certainly not a perfect catch-all, but they are likely the fastest way to lower costs while increasing liberty and access. The only other way to lower costs is to ration, and a national health care plan or national insurance mandate will do just that, and the former at an increased cost. The tax treatment of employer provided insurance is a particularly difficult pill to swallow, but when your appendix ruptures it is no time to look for the painless solution.

When Doctors Opt Out – WSJ.comHeres something that has gotten lost in the drive to institute universal health insurance: Health insurance doesnt automatically lead to health care. And with more and more doctors dropping out of one insurance plan or another, especially government plans, there is no guarantee that you will be able to see a physician no matter what coverage you have.

Government run health care will produce fewer choices.  If you get nothing else from this doctor’s Op-Ed, get that.  Insurance/coverage is not the same as access.  And the more the government plans compete with private health care funding (whether out of pocket, private insurance, or private charity) by price-fixing and subsidizing, the fewer health care choices that will be available.

HT:  John Goodman