OT: Senator Kennedy is dead/Insurance reform

The Republicans got their shit passed. I saw an interesting story that indicates the fillibuster is being used in unprecidented fashion since Dems got the majorities in the House and the Senate. It's far from clear that Repubs would let this type of tactic prevent them from getting stuff passed. Dems really need to grow a pair. Shut down the government until the filibuster ends. If Rethugs can fillibuster with 40, dems certainly could with 50+.

 

I don't trust private insurance companies one bit. Or any other private companies as individual agents. What I do trust is that if private companies are forced to compete for my business, there's a limit to the crapitude of the service they will provide. As private companies face less competitive pressure, their suckiness inevitably increases, and they become quite similar to that least competitive of all endeavors, which is government.

None of the "reform" ideas I see at the moment even begin to address the real issues in a sensible way. Mostly they're generally cementing the already uncompetitive over regulated and over governmented clusterfuck into something even worse.

 

And as far as Ted Kennedy goes, just... if you think a joke is "too soon", don't sweat it... Kennedy himself would see the humor in it. Here's a bit (via Ann Althouse) today from a friend of his.

As far as the man himself, this is a pretty compelling portrait.

 

I'd argue it's going to take a Democrat to change education because only they will have the ability to sufficiently betray the teacher's union to pass a meaningful reform (just like you needed Clinton to get Welfare reform done and Nixon to go to China). American politics typically works not by the other side taking over and crushing an intrenched interest, but by the interest being sold out by its own side. Though surprisingly, NCLB might be a bit more than gloss according to guys who were previously skeptical about it.

Yay for the offseason! No Bulls topics out there whatsoever

 

That was a Republican majority in congress that reformed welfare and called Clinton's bluff on vetoing it.

The real problem with this country is that we've gotten too good at making a profit and exploiting capitalism. Whether it's healthcare or politics, it's always about making a buck. The vast majority of senators and representatives work on getting their pork projects amended to bills to payback the special interests that bankrolled their campaigns. They turn around and hire their spouses and kids as "consultants." The whole thing is fucked. Kennedy represented the worst of it. He rode the coattails of his family name and should have served as many years in jail for the death of Mary Jo Kopechne as he did in the senate.

Healthcare is no different. As long as insurance companies are judged primarily and directly on whether or not they turn a profit, individual care will suffer. Maybe health insurance companies shouldn't be publicly traded, I don't know, but there needs to be a different way to determine what makes a good health insurer based on things like the quality of care customers receive and the overall and trends in the health of those customers. About the only thing I really agree with in the current attempts at overhaul is removing the ability of insurers to refuse patients based on preexisting conditions, although I might limit that to genetic conditions.

Anybody who thinks healthcare in the US isn't among the best, if not the best in the world is drinking the coolaid. This week my wife delivered our second child at 34 weeks. I don't live in a big city, either. The care my son has received has been great. There were three doctors at his delivery waiting for him. Compare that to the horror stories, but credible, of women delivering babies in the halls and even on the street in front of the hospital because the dispatcher told the women to walk to the hospital in England. And for every grandmother going across the border to buy prescription drugs, there is a Canadian waving as he is coming the other way to get a surgery done that would require at least a six month to a year wait in Canada, and I'm not talking about plastic surgery.

I'd love for everybody to have the same level of benefits that I have, but these things do have costs. Instead of taking purely a demand side approach with various forms of rationing and castrating private enterprise, why not try some supply side solutions as well. First, how about some tort reform? Cap negligence claims at the cost of a in home nurse or a low millions of dollar lump settlement. And strip bad doctors of their license if they are negligent. Then increase the number of doctors. The simplest way to bring costs down is decrease labor costs. Open more med schools. The group that regulates med schools has been shown to keep the number of new doctors artificially low. By increasing the number of doctors, you bring the costs down through competition. Subsidizing the cost of the education further decreases costs as doctors won't be starting new jobs in their late 20's with 3-400k in debt. I think just these three solutions in combination would both bring down the costs and increase the number of people able to afford health care in a lot less destructive way for everybody.

 

That's pretty much my experience too, both from traveling and having family abroad and doing quite a bit of research on it.

What's more, many of the relative advantages in other countries, like cheap generic drugs in Canada, exist because the US system still allows those things to be developed in the first place. Quit making new stuff here and you're not going to get many new advances their either.

I also like most of your suggestions.

The single biggest cause of stress and abuse in the US system, I think, is government induced in the first place. It's the tax breaks and regulatory structure that make tie health insurance to employment. People get health insurance that way because companies (and you) get huge tax advantages to doing it that way.

If we did a revenue neutral shift to individual tax deductions (and go beyond to give positive credits for the truly poor), I'd think that's a massive improvement to the system.

Your health insurance wouldn't be tied to your employment, which is a ridiculous and stressful situation for nearly everyone, not just folks who lose their job, because you have to think about it every time you change jobs. In a world where most people change jobs every few years.

It'd also greatly reduce the number of people who end up in the pre-existing condition penalty box, because it'd be much more possible to continue making your health insurance payments when unemployed (just like most people are able to keep making their car insurance payments).

It'd be a massive improvement, and at very little cost.

Which is probably why it's not even being discussed and instead the guys in charge want a massive takeover of everything.

 

Can't agree. I think getting rid of pre-existing conditions and recision is huge.

 

A nice thing about uncoupling health insurance from employment is that in addition to the other obvious benefits, it'll greatly reduce the pre-existing conditions problem because so many of them are created due to employment status changes.

You almost kill two birds with one stone. Not completely, of course, but you make it a much, much smaller problem, one that can potentially be dealt with without other draconian changes.

My understanding is that recision isn't that big of a problem when you actually look at the stats of it. That's not to say nothing should be done about it. It can be a small problem but still a terribly immoral thing to do. But the scope of the problem is important. Child porn is terribly bad, but I don't want to lock down the internet to stop it. Likewise, I don't want to totally upend health care.

In fact, I strongly suspect the proposed reforms would result in a world where we fondly looked back on recision. Because another major stated goal for upending health care- controlling cost- leads to the same endpoint. Typically an insurer tries to cancel a health insurance contract to avoid paying for very expensive and sometimes unproven treatments. But these seem to be exactly the sort of costs that folks keep saying will need to be "wrung out" of the current system.

The kicker is, in the current system, an insurer who denies coverage in some egregious case typically gets sued and gets a major PR black eye. As well they should. Point is, there's some recourse. If the government takes everything over, where's the recourse?

By the way, everyone, here's my required reading list for understanding why health care is so fucked up (and yet, it could still get a lot worse), and what should be done about it.

1. How American Health Care Killed My Father. From The Atlantic. Choice quotes:

2. John Mackey's (CEO and Founder of Whole Foods) WSJ editorial.

3. Essays by Megan McArdle, business editor of the Atlantic.

• Is What's Good for Pharma Good for America?
• What Does It Mean To Have a Private Health Care System
• A Long, Long Post About My Reasons For Opposing National Health Care

I don't agree with everything written by every one of these guys, but I think they're a lot closer to write than anyone that's proposing law these days.

 

Actually, there is no recourse to many types of perfectly legal recision that are completely immoral. One can pay private health care premiems for years, be diagnosed with something life-threatening and very expense and then have your coverage thrown out due to careful examination of your initial application and past health-care records for something that is completely unrelated to your current condition. The percentages are very small but then the people with a life-threatening and very expensive condition is small as well. So it's a much larger percentage when compared to people that really need their insurance.

I don't have much faith and/or confidence in John Mackey's and Megan McArdle's ideas but I will give you that they have some reasonable idea's (although far from a complete prescription). It's flat out pathetic that the basic Republican position is just "no" and "watch out for Death Panels" when reform is so badly needed for our country and something is nearly certain to pass.

 

p.s. Glad to see that you think pre-existing conditions need to be solved.

p.p.s. I've done some reading on tort reform, am all for it to some extent, but it appears to be a small piece of the puzzle that could be fixed independently at any time.

 

Can you put some numbers to it?

The numbers I've seen (for example presented by Caplan, but sourced from NYT and the CBO) say:

This is interesting because it suggests in and of itself that the problem is very small (approx 4k people per year) and that perhaps there are reasons other than cutting off large claims at stake. Because if you divide that $300M by that 20k people, the average claim per person savings is only $15k.

Again, I want to stress that I'm saying screw people who get sick and have their contracts torn up. What I am saying though, is that can't be what's going on here if these numbers are even remotely accurate. $15k is not even in the same ballpark of the hundreds of thousands and even millions of dollars insurance companies routinely pay out when folks they insure have really serious issues.

I don't know that I agree with that. Without defending a party, I think it's certainly fair to say "NO!" to something you think will make the problem worse, even if you acknowledge there's a problem.

That's very true if the nature of the game - as Congressional politics are- is negotiation and log rolling. The situation is basically Party 1 has control, and suggests A, B, and C reforms, all of which Party 2 believes suck rotten eggs. Party 2 can potentially block all of Party 1's ideas, or it can negotiate, to include reform D and E, and possibly to remove item C from the bill.

So it really comes down to how you think these "reforms" help or hurt. Suppose you assign them values like
A -1
B -20
C -30
D 5
E 10

Negotiating a compromise as I suggested ends up in a bill you think is a -6
Blocking the bill and not negotiating ends in a 0
0 > -6, so don't negotiate.

Interestingly, our starting point ends up being irrelevant. Even if we're in a hole, it's all about whether we're climbing out or digging deeper.

 

It's 4k per year at the 3 insurance companies that were studied which the author you cited conservatively estimated at 1% of the market. So it's more like 400k per year. It's not small. And the Insurers are unwilling to change their practices.

http://www.nytimes.com/2009/06/29/opinion/29mon1.html?_r=1

Edit: It's easy to see why one company would have a difficult time changing this practice. It is a business.

 

Look...I agree it's fine to say "NO!". It's not fine to lie about "Death Panels" and a bunch of the other nonsense that has gone on. Don't you think?

 

OK, I'm not really intending to have an argument about this because in reality we don't disagree, but these are mostly incorrect assumptions from the facts Caplan laid out.

When we economists talk about market share, we're talking about share of dollars spent, not "customers served". Hence, it's inaccurate to multiply the numbers out and say there are 400k people/year being cut.

Caplan was actually being "liberal" in his assumption there, not "conservative". He doesn't cite any evidence for his number, he simply provides one for the sake of argument. Typically when people take an arbitarily number, it's customary to take one unfavorable to one's own position. In this case, citing 1% was the least favorable case he could make to the argument he was making.

If you follow through his argument he's we have the following facts.
We spend $10T in health care over those five years.
The rescissions by those three companies resulted in $300M of savings.

The magnitude of those savings depends on what kind of market share those companies have. Hence, the lower the market share, the bigger a problem we can extrapolate rescission to be. But his point is that even if you pick an extremely low market share, 1%, the savings from rescission amount to less than 1/2 of 1%.

If the market share is higher for those big three companies (and it assuredly is), the amounts involved become even more trivial. Which, again, is not to say something shouldn't be done about it, but again the $15k per person hardly seems worth the effort in contrast to the claims actually paid. This low amount, again, is what makes me fairly skeptical about widespread recission. Because again, even if it's being selectively used against people expected to file claims, you'd expect the "savings" to be greater per person.

In any case, I'm against it as well. I think the better solution than a massive government program (that will almost certainly result in significant denial of coverage in its own way) is simply for the government make this illegal- though it seems of rather dubious legality in any case. Beyond that, obvious solutions would be
1. Reducing the pre-existing conditions problem, as I mentioned earlier, because it leads to a significant number of rescissions.
2. The various other market-based reforms I've suggested and pointed to would lead to increased reputational penalties for recission (hint, most health insurers now operated under near monopoly conditions created and enforced by the state and federal governments!).

Anyway, I don't think it's possible to "lie" about a speculative future that doesn't exist. It seems pretty frequently admitted, even by supporters of the current proposals, that they're basically intended as a midpoint, not an endpoint on the road to some future health care system. It's perfectly reasonable to say, since people on both sides of the issue believe it, that what we choose now will lock us into certain choices in the future.

In politics, about the only thing I think that can honestly said to be truthful or not anymore is a cold hard number, but there's even quite a bit of dishonesty in those. There are perfectly reasonable, and honest disagreements about what the accurate and meaningful number is that we should use to describe people who "can't get insurance", or who are unemployed, or even what the GDP is. The real truth is that everyone is completely full of shit in the sense we mean when we say we're telling the truth in every day life. Which, to me, is a much bigger problem than health care in the US, and probably one I'd attempt to deal with first, rather than letting the people who can't tell truth from fiction (which is most of us) make decisions that affect me and my kids. But I guess I'm getting pretty far afield...