FedUpUSA

Archive for the ‘health care reform’ Category

Some day people will demand that commentary have some sort of intelligent basis behind it.

Yet, the current system is falling apart. Medicaid, which funds almost half of all paid long-term care, is under immense financial pressure. Few Americans have saved for their long- term-care needs in old age — half of retirees have less than $55,000 in financial assets, barely enough to pay for nine months in a nursing home, or two years of limited daily help from a home health aide. And hardly anyone buys private long- term-care insurance — only 7 million Americans own policies.

Despite the death of CLASS, the challenge of long-term care financing is not going away. So, how can we fix a badly broken system?

The best way is probably through universal long-term care insurance. Every major developed country on the planet — except for the U.S. and the U.K. — has already gone this route. Here, insurance could be offered by the government, or by private carriers in a regulated national marketplace (much like the Medicare Part D drug benefit or Medicare Advantage managed-care plans).

Utter nonsense.  Here we are with another “plan” to simply play ponzi for a few more years.

Health care has expanded in cost at an average of 7.9% from 1990 through 2010 for individual “coverage.”  Family coverage has expanded at 8.2%.

This is what you’re trying to “provide”, assuming the “young person” buys at age 25 and continues through age 65, a period of 40 years.  We will assume that the care today costs $4,000/month, which is well under the average actual cost, or $48,000/year.  In short I’m being “polite” about the numbers, giving you the maximum benefit of the doubt.

To Bloomberg: Would you please stop publishing utter and complete crap under the rubric of “opinion”, when said “opinion” is an argument for that which is mathematically impossible?

Alternatively you can explain how we’re going to pay (through any mechanism) $931,274 annually for each insured person 40 years hence to cover this “long-term care.”

The claims of “solutions” that are in fact the incessant selling of Ponzi Schemes must end right now.

Further, any government or private party setting up, maintaining or promoting such a scheme must face immediate prosecution as Ponzi schemes are illegal under existing law.

Adding complexity offers a facsimile of “reform” that actually serves the Prime Directive of fiefdoms and cartels: self-preservation.

The most obvious features of recent political and financial “solutions” are their staggering complexity and their failure to fix what’s broken. The first leads to the second. Consider the healthcare “reform,” thousands of pages of mind-numbing complexity which slathers on thick layers of  bureaucratic control on a system which already costs twice as much per capita as competing developed-world systems.

Sadly, the “reform” simply solidifies the Status Quo fiefdoms and cartels that control the U.S. sickcare system.

The healthcare reform fixes nothing, while further burdening the nation with useless complexity and cost. The same can be said of the Dodd-Frank “reforms” of the embezzlement-based U.S. financial system. The original Glass–Steagall Act separating investment banking from depository banking was a few pages in length; by one count, Dodd-Frank  requires that regulators  create 243 rules, conduct 67 studies, and issue 22 periodic reports.

Meanwhile, back in reality, the Financial Elites of Wall Street and the  “too big to fail” banks still have the nation (and Europe) by the throat.

Complexity is itself a tax; the maintenance cost of complexity is high, and can only be justified when the added complexity solves a critical problem of the society as a whole.

Adding ineffectual complexity leads to diminishing returns, as the complexity itself crushes the system supposedly being “improved” or “reformed.”

Here is the “problem” which complexity “solves”: it protects Savior State fiefdoms and private-sector cartels from losses. State fiefdoms and cartels have one goal: self-preservation. Once sufficient power and wealth (or control of wealth) is concentrated in a fiefdom or cartel (generally the two are partnered, as each supports the other), then the power can be devoted to limiting losses or encroachment.

That becomes the raison d’etre of the agency or enterprise.

Complexity works beautifully as self-preservation, because it actually expands the bureaucratic power of fiefdoms and widens the moat protecting cartels. Once the fiefdom expands to manage all those new rules, only a handful of corporations can possibly afford the regulatory reporting burdens. They are thus free to exploit the populace as an informal cartel.

I addressed some of these issues inThe Cycle of Dependency and the Atrophy of Self-Reliance (July 2, 2011).

Put another way: in the competition with the private sector for scarce capital, the State and corruption always win. That’s why kleptocracies and banana republics are characterized by bloated, unaccountable State bureaucracies and systemic corruption: sweetheart deals, no-bid contracts, shadow banking, shadow governance by Elites, inefficient workforces that cannot be fired or held accountable, and so on.

Real solutions require radically simplifying ossified, top-heavy, costly systems.Complexity serves to protect the existing constituencies and cartels; it allows those with the most to lose the cover of “reform.” But the reform is only a simulacrum; it claims reform along with its expanded powers, but the result is system that is so complex that it loses all accountability. Complexity is the perfect moat.

This is the idea, of course: banana republics and other kleptocracies always manage to support vast State bureaucracies which enable and support private cartel stripmining of the national wealth.

Note that the Status Quo always supports complex “reforms” and dismisses radical simplification as “impractical.”  What “impractical” means is that various fiefdoms and cartels would lose swag and power, and that would be painful; thus it is verboten.

The single goal is preserving the revenue and reach of concentrated power centers:State fiefdoms with large constituencies and headcounts, and cartels with no competition and stupendous profits. The two are hand in glove.

But complexity does have an eventual cost: collapse. Keep adding decks to the ship and eventually it capsizes and sinks. One the ship is sufficiently top-heavy, all it takes is a small wave.

Of Two Minds

The costs of the U.S. “healthcare” system, a.k.a. sickcare, are rising at a rate that is three to five times faster than the growth of the GDP–when it’s growing at all. That guarantees sickcare will bankrupt the nation within a few years.

Forget the Pentagon and welfare: what will soon bankrupt the nation is our out-of-control malignant sickcare system, a.k.a. “healthcare.” The runaway costs of “healthcare” are undermining the nation’s economy on multiple levels.

The people actually providing the care know the system is broken. It’s not “fixable” via minor policy tweaks or limiting payments to one slice of providers; the problem is systemic.

The country is in a tizzy over public employee bargaining rights and compensation costs, but few ask this question: What is the biggest cause of public employees compensation soaring to unsustainability? Answer: The costs of providing healthcare, which are rising 6% every year across a flatlined economy, and up to 11% per year for public employees.

Here is a chart drawn from Public Pension and Healthcare Costs and Financial Common Sense (February 28, 2011) which depicts how fast-rising pensions and healthcare costs are completely disconnected from the underlying economy.

Public employee healthcare costs in some California cities have been rising an average of 11% per year in the decade since 2000.

Here is what happens to $1 in healthcare costs which increase 11% per year:

1 (2001)
1.11
1.23
1.37
1.52
1.69
1.87
2.08 (2008)
2.3
2.56
2.84
3.15 (2012)
3.5
3.88
4.31
4.78 (2016)

By 2012, these costs have more than tripled and by 2016 they will have jumped five-fold. Once again: does anyone seriously believe these trends are sustainable in an economy which isn’t even growing at all once we subtract Central State borrowing and spending?

For context on Central State borrowing (Federal deficits): Here are the deficits of the past three years, and the estimated shortfalls for fiscal years 2011 and 2012:

2008: $458 billion
2009: $1.4 trillion
2010: $1.3 trillion
2011: $1.5 trillion (est.)
2012: $1.6 trillion (est.)

(CBO estimate for 2011)

total: $6.258 trillion in five years.

While healthcare costs are rising around the developed world due to the demographics of aging and more treatment options, the U.S. sickcare system costs twice as much as our competitors’ systems.

Medical Care Prices Are Rising Faster Than Overall Inflation (BusinessWeek)

The U.S. spent an estimated $2.4 trillion on health care in 2008, about 16.5% of gross domestic product and a 6% increase from a year earlier. Medical care prices are rising faster than overall inflation, and the burden on consumers continues to grow.

The source of the problem is the “fee for service” foundation of the system. There are no real limits on spending, despite various “reforms” which attempt to limit the runaway costs. Correspondent Quentin VT submitted this article from The New York Times on CEOs of publicly funded hospitals drawing millions of dollars a year in compensation: Immune to Cuts: Lofty Salaries at Hospitals.

I have covered these issues in depth for years:

Healthcare “Reform”: the State and Plutocracy Stripmine the Middle Class (Again) (November 9, 2009)

The Simulacra of Change, the Propaganda of Hope (January 20, 2010)

Is Fee-for-Service What Ails America’s Health Care System? (January 18, 2010)

Can Health Care Reform Possibly Control Costs? (April 10, 2011)

Sickcare is fundamentally a system of interlinked politically powerful cartels.

Insiders who refuse to speak on the record for fear of antagonizing the powers that be, exorbitant price increases, confidential agreements and a tug-of-war between warring tribes. Is this the Mafia we’re talking about?

From the point of view of investigative journalism, it could also describe America’s health care industry. Setting aside the politically attractive mantra of “improving access to healthcare,” from this point of view the industry is a highly profitable and politically powerful group of companies which operate in cartel-like fashion: that is, they use their clout to limit competition and establish highly profitable pricing.

These observers use the word “cartel” not in the sense of a formal organization like OPEC (the Organization of the Petroleum Exporting Countries) or the criminal activities of drug cartels, but in the informal sense of a small group of companies which dominate specific markets and thus wield significant political and pricing power within those markets.

Why should we care? Experts say that it is a sign of the medical industry’s enormous political power that the health reform bill overlooked some of the biggest cost drivers in American medicine.

And if costs don’t go down, then the affordability and sustainability of the U.S. healthcare system become questionable over the long-term. The U.S. already spends twice as much as other developed countries on healthcare as a percentage of GDP.

When asked to identify the source of America’s runaway health care costs — U.S. spending on health care has more than doubled as a share of GDP in the past 30 years — healthcare industries and trade groups excel at pointing to the next guy as the source. Doctors, hospitals, insurers, HMOs, pharmaceutical companies, malpractice lawsuits and the courts which award huge settlements, Federal regulatory agencies, Medicare–scapegoats abound, and so do rationalizations.

If no one industry is responsible, then perhaps we need to look at the entire system of self-serving industries which profit from guaranteed payments to private-sector corporations which involve special political dispensations such as exemptions from anti-trust laws, and a tolerance for ways of limiting competition and insuring highly profitable contracts.

If the healthcare reform bill doesn’t really address the cost drivers and the incentives built into the current system, then it’s difficult to see how costs can decline.

This system is based on regional networks of providers negotiating with insurers to exclude competitors and set exorbitant prices that are passed on as insurance premiums. While insurers complain about rising costs, they are exempt from antitrust laws and thus they have the power to consolidate smaller insurers within a region and then pass on price increases to consumers and businesses alike.

A recent report by Massachusetts Attorney General Martha Coakley uncovered multiple forms of anti-competitive behavior among providers, including huge price disparities that had no visible relation to any free-market factors. The report concluded that this and other forms of collusive behavior were “pervasive.”

Once upon a time in U.S. healthcare, it was the norm to post prices for procedures and care; this is no longer the norm.

Some local providers who post their prices openly, such as Keith Smith, an anesthesiologist with the Oklahoma Surgery Center, find that preferred provider organizations (PPOs) and insurance companies aren’t interested in contracting with his group, even though their prices are 70% less than those charged by local not-for-profit hospitals. To Smith, that is strong evidence that medical cartels are making deals with insurers to monopolize services in their region.

To cite another example of the distortions which end up costing the nation twice as much for health care (as a percentage of GDP) as competing developed countries such as Australia and Japan: Pittsburgh has almost as many MRI machines as the nation of Canada.

According to local media reports, Western Pennsylvania has about 140 MRI machines, while the 32 million residents of Canada share 151 MRI machines. And the machines are getting a lot of use: the number of CT and MRI scans (scans other than old-fashioned X rays) tripled from 85 to 234 per thousand insured people since 1999.

While proponents are quick to note that scans are cheaper than the alternative diagnostic procedures, one firm’s research found that a doctor who owns his own machine is four times as likely to order a scan as a doctor who doesn’t.

As if that wasn’t enough to highlight the self-serving nature of “fee for service” cartels, MRI scanner manufacturer General Electric waged a two-year lobbying campaign to roll back cuts in Medicare reimbursements for scans. While the effort proved unsuccessful due to the intense political pressure to reduce soaring Medicare costs, some critics claim that providers simply made up the reduced reimbursements by increasing the number of tests administered.

The only solution that actually addresses the systemic problem is to get rid of the entire fee-for-service structure and break up the cartels. Healthcare must be reconnected to diet, nutrition, fitness, lifestyle and community, and to education and emotional well-being.

The odds of any of this happening are essentially zero, and so we can safely predict that sickcare will bankrupt the nation (with a helping hand from the Pentagon) within a few years.

Of Two Minds 

In a stunning admission of just how job-killing and business-crushing the new health care law really is, the Obama administration has issued a staggering total of 111 Obamacare waivers (and counting) so far. The list of the dozens of companies and organizations that have been approved for a waiver is very, very deeply buried on the website of the Department of Health & Human Services.  In fact, it takes six separate clicks to get to the list.  Some of the companies that have been granted waivers include McDonald’s, Darden Restaurants (owners of the Olive Garden and Red Lobster restaurant chains), Aetna, the United Federation of Teachers Welfare Fund in New York, and Dish Network.  These Obamacare waivers cover a total of 1.2 million Americans.  However, as news of these waivers spreads, it is inevitable that thousands more companies will want to apply.  In the end, tens of millions of Americans may be covered by health plans that have been exempted from Obamacare.  So can the rest of us get in on this action or is the Obama administration going to play favorites with these waivers?

So far, the Obamacare waivers have primarily been granted to companies that offer very limited health plans.  The Obama administration has apparently been afraid of the public relations nightmare that would result if dozens of companies suddenly started dropping health coverage for their employees.  The following is how the New York Times recently described what is going on with these waivers….

Last month, federal officials granted dozens of one-year waivers that were aimed at sparing certain employers, including McDonald’s, insurers and unions who offer plans that sharply limit the coverage they provide. These limited-benefit plans, also known as “minimeds,” fail to comply with new rules phasing out limits on how much policies will provide in medical care each year.

So do you want to get an Obamacare waiver for your own company?  Well, just over a week ago the Department of Health & Human Services published a set of new guidelines for those seeking to apply for a waiver.  As news of these waivers starts to spread they will likely get absolutely swamped with applications, so you better get yours in early.  In fact, it is being reported that the number of approved applications has tripled in just the last month alone.

But these waivers raise some very important questions.

-If Obamacare is such a great law, shouldn’t it apply equally to everybody?

-If Obamacare is going to cause firms to drop their “mini-med” health plans, shouldn’t all firms with “mini-med” plans be given a blanket exemption?

-Are all firms that apply for an Obamacare exemption going to be given one or will the Obama administration be playing favorites?

-Won’t firms that are granted these Obamacare waivers be given a very substantial competitive advantage over other firms in the same industry that do not have an exemption?

-What does it say about an administration when they grant dozens upon dozens of exemptions from a law that they spent months upon months selling to the American people as the ultimate solution to our health care problems?

The following is a recent video news report about these Obamacare exemptions…..

The truth is that the U.S. health care system was deeply broken before Obamacare, and after the new health care law the U.S. health care system is still deeply broken.

Before Obamacare, the U.S. health care system was all about making as much money as possible for health insurance companies and the pharmaceutical industry.  After Obamacare, the U.S. health care system is still about making as much money as possible for health insurance companies and the pharmaceutical industry, only now we all have to deal with more suffocating layers of government bureaucracy and much higher health insurance premiums.

The entire health care system in the United States should be dismantled and built again from scratch.  It was a complete and total nightmare before Obamacare and it is still a complete and total nightmare.

The Economic Collapse