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Rational Responses to an Irrational System
ObamaCare is not proving to be the boon insurance companies expected (I know, I know; the poor dears). Via Megan McArdle, one of the many causes is that a number of health providers have figured out some very clever ways to game the system:
This weekend brought a new suggestion across my desk. At Forbes, Bruce Japsen writes that insurers think providers are funding nonprofits to pay Obamacare premiums for high-cost Medicaid patients, thus sticking insurers with a lot of big bills for a lot of very sick patients.
Why would they do this, you may be asking yourself? Because Medicaid reimbursements are extremely low. If you have a patient who is consuming tens of thousands of dollars a year worth of care, reimbursed at the rock-bottom rates that Medicaid permits, then it may well make financial sense for you to pay the premiums to switch that patient onto private insurance, where your services will be reimbursed at much higher rates. Since insurers are no longer allowed to charge sick people more for insurance, the insurers have to take them — and then pay their enormous bills. And since, needless to say, this only makes financial sense for patients who are extremely sick, that will have the effect of skewing the Obamacare risk pool in a very expensive direction.
Undoubtedly, the fix will be to regulate such “charities” out of existence. And, equally undoubtedly, people will respond by finding some new loophole — likely even less-efficient than this one — that will work until it’s closed by yet more state intervention; that’s just what we do. Baring a medical or political miracle, the process will continue until the money runs out and people start dying of preventable disease. It’s like climbing a ladder in free-fall: Each step is rational, but merely delays the inevitable by an instant while our downward speed increases massively due to gravity.
There might be an opportunity after the crash, but no one should look forward to getting there.
Published in Healthcare
Costs are 800 yr up to 20 K a year, depends on who what and where. There’s all kinds of micro businesses rising up and offering lower cost alternatives.
Insurance companies and government entities have made various attempts to stop this trend . Hillary won’t allow it if her 1993 health manifesto beliefs still hold true.
Well, it actually does, but only in proportion to the ladder’s portion of the you + ladder system. Certainly not rung by rung.
Edit: I see that most of the civilized world has beaten me to the punch. I’ll simply close the books with the other end of the function: if you beat yourself to death with the ladder in free-fall, it will delay your death by a negative amount. Choices abound.
There are those (Ahem!) who said that ObamaCare was designed to break the system — it was designed not to work, but to get the ball in the air where nobody could touch it on its way far far down the field toward nationalized, single-payer government health-care rationing.
“Well, how exactly is that going to work?” Don’t know. but when somebody throws a plate on the floor, I don’t have to accurately predict the number of shards, either.
This is exactly why the Ted Cruz approach in 2013 was the right thing. “Letting ObamaCare fail” so that the people can see how bad it is was never going to happen. The Republicans cannot wait to get the thing up on jacks and try their hand at “fixing” it to benefit their own interests.
Complain if you like about Trump being a big-spender progressive about this stuff, but in that, we are no better off than the status quo for the GOP. At least he’s for border security and no amnesty.
Conservatives will have to revolt against the party if they ever want to clear ObamaCare off of this land. That’s not new.
Obamacare is collapsing faster than I think the Dems expected. If the GOP would have been united this year there might have been a chance at some reforms, but I agree it would have been mostly tinkering at the edges.
It’s all going to be tinkering at the edges for the GOP, the special interests are too entrenched. It is going to fail, I see it every day. It’s quite depressing for a normally sunshiny doc to deal with.
My grandfather, A”H practiced medicine in Queens for over 55 years and during the Depression often cut his fees and took barter for his services (food, clothing for my Mom and uncles.) For many years his practice management system was a simple ledger. He said that when the Health Insurance Plan rolled out in New York (I think it was in the 1940s or early ’50s) it was the “end of the practice of medicine as we have known it.”
A Big Lie was to call it “insurance” when the actuarial component was distorted by political pressures over the years.
Thirty years ago I had a patient who owned an insurance agency tell me that his/her plan was to receive as much or more in medical services each month as was paid in premiums for a top of the line health plan. This individual was seriously annoyed when I wouldn’t prescribe weekly massages that would have been covered by the plan.
We were having this same discussion regarding health care costs in the early ’80’s. I said at the time, and it’s still true, that health care is a black hole into which you can pour any amount of money. It’s the thing that’s going to break us.
“dresses for [your] mom and uncles” During the depression? Really? Brave men. :)
Not so fast. That’s my job around here. Please don’t dangle the possibility of new honors and titles in front of @misthiocracy when he doesn’t stand a chance of achieving them, because I will fight him to the death.
Anyway, it’s pedant.
Good comment, though.
And maybe it explains the neologism, ‘pundint’ which I hear constantly on the radio, from the supposed pundits.
I’m off now to study the origins and derivations of the word “mountebank” which I think may have some relevance to the current political situation, and which I hope to use appropriately in a post or comment in the near future.
This Grammar Nazi™
got that waaaay back, with a subtle joke (that some may have missed) that pokes fun at “pendant” by suggesting that it sways left and right and left and right….
GAHHH! This drives me
CRAZY!!!
The closest little town to us is Claysville, PA. It’s not all that exciting now that Sprowls Country Hardware has closed down, and the growth industry seems to be homes and apartments for old folks. (Fracking is making a difference, though, and will, if it’s allowed to continue.)
But when we moved out here in 1986, it was thriving.
One end of the business district was anchored by Dr Little, the dentist. At the other end, three short small-town blocks away, on the other side of the road, was Dr Large, the physician.
Fred Large was a legend, and though he died in 1996, he’s spoken about as though he’s still here. A Temple University MD, he served in the army during WWII, and was a Lt Colonel at time of discharge. He practiced in Claysville all his life, and was its Mayor for twenty years before he retired. His kindness and good works were legion, and he’s still sorely missed.
When he retired, in 1996, the hospital I worked for bought his practice, as this was the time of expanding health networks, and hospital owned physician offices. As a sign of respect, I think, the hospital also took over his ‘financials,’ and his accounts receivable. (A risky thing to do when you buy something like a doctor’s office, because you may get stuck with a lot of debt that’s never paid off).
That was when we discovered the “Dr Fred Large Accounting System,” in which many of his bills, both paid and outstanding, involved things like cattle, pigs, honey, chicken and bacon. Eventually, I think we gave up on trying to balance the books, and just moved on.
Fred Large was made for small-town medicine. He and his patients worked things out, and both sides were completely happy. I’m sure he never charged anyone more than they could pay. I’m sure all his patients were delighted to pay him what they could, in whatever currency they had.
That’s how it can work, and did work, among people of good will, with the government out of the way.
Oopsie! Good on you! I missed it, and I thought I had read all the comments. Like the Japanese Emperor, perhaps I should start thinking about abdication . . .
With regard to insurance and medical care, I cannot get medical care for my tick-borne illness from any doctor that accepts my insurance, which of course is much much more expensive than it was a couple of years ago. Even though I am really quite sick, they look at me and turn me away.
Those s***s. I hate them all, even though I know it is sinful, and I remember all too well the sick feeling of utter helplessness and rage I had after dragging my poor sick suffering self into their offices while they told me that either I was not sick, could not be sick, or must need counseling.
Instead, I (read, my husband) pay out-of-pocket to a doctor who does not accept any form of insurance or deal with insurance companies at all, for my medical care and my drugs, none of which insurance will cover. As I tell my pharmacy, insurance won’t cover my drugs because they don’t believe in fairies.
So I’m required by law (thanks, John Roberts!) to pay money for useless product, the “insurance.”
You are correct in your diagnosis that Obamacare is a step on the path to Universal Healthcare. Many of us said so at the time.
Where I think you falter is your discussion of tactics. Ted Cruz would have defunded the entire project never allowing it to be exposed for the massive failure of government mismanagement that it is.
What you see as tinkering around the edges I see as important steps towards exposing the big lie of Obamacare: namely that government can manage markets. Take Rubio’s important efforts exposing and eliminating the insurance risk corridors. This probably went a long way towards hastening the demise of Obamacare by eliminating the governments ability to paper over the cracks in the payment system. It’s no coincidence that after risk corridors went away that premiums started their current death spiral.
What was that about “proofread again before posting?”
And also some of the less-civilized parts of it.
this^
I was giving Canada a pass.
I would find it hard to disagree with your well-stated case, except that we are seeing that lessons do not get learned, and if they do, they are not passed on. To use an admittedly silly analogy, I found punching the bully far more effective than telling a teacher.
If I thought there were an audience worth appealing to, I would be all over your solution. The Republicans in issues like this seem to behave as if they needed referenda each time they did something, instead of relying upon the biennial reckoning. It’s especially galling when they’ve just won crashing victories in the House. It’s a refusal to take Yes for an answer — to keep asking for permission until finally told No, and then moping back home to say it can’t be done.
Now look at where we are. Of all the candidates who ran this year, I can think of only one (off the top of my head) whom I suspect would be making the destruction of ObamaCare a priority issue right now in the general campaign.