FedUpUSA

Archive for the ‘health care reform’ Category

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

I think there were those of us who warned about this happening.  My own insurance premiums have gone up over 20%.  America, you were sold a bill of goods.  Pelosi wasn’t lying that the bill had to pass for everyone to be able to see what was in it.  The ‘healthcare reform bill’ was not, nor was it ever intended to help anyone with healthcare costs – it was always nothing more than a tax grab by the federal government, which is desperately trying to get their hands on your money without having to take direct responsibility for raising your taxes.  So, this time, they disguised it as ‘healthcare reform.’  The next one will be in the form of Cap & Trade in the name of ‘saving the environment.’  Don’t say you weren’t warned.

This past month millions of Americans got notice from Blue Cross/Blue Shield providers across the country that their insurance premiums were going way up effective immediately. Here is the terse reason CareFirst/ Blue Cross/Blue Shield of Washington gave its subscribers for raising a monthly premium from $333 to $512 on a middle aged man who is healthy, is not a smoker and is not obese: “Your new rate reflects the overall rise in health care costs and we regret having to pass these additional costs on to you.” 

Recently, Fox News anchor Bill O’Reilly also received a similar notice from his health care provider, (Anthem Blue Cross), and was told that his annual premium will increase by $2,100. 

The excuse given was the same boilerplate as set forth above. 

An 85-year-old New Yorker received notice from his health care provider, (Empire Blue Cross/Blue Shield), wherein he was notified that: 

1. His Medicare deductible is being increased from $1,068 to $1,100; 

2. His co-insurance liability for skilled nursing facilities is being increased from $267 per day to $275 per day and that 60 lifetime reserve days is being increased from $534 to $550; 

3. His Medicare Part B deductible is being increased from $135 to $155. 

American health care providers are gouging consumers in advance of Obamacare taking effect in 2014. 

According to publicly available profit and loss statements, our nation’s largest health care providers such as  Humana, Wellpoint, United Health Group, Cigna and Aetna collectively posted a net income of over 12 billion dollars in 2009. 

Is it not just a little bit suspicious and beyond coincidence that so many Americans are receiving these letters from separate “independent” health care providers all over the country? The letters are almost identical in content and verbiage. 

According to the Consumers Union report, not-for-profit Blue Cross/Blue Shield groups are raising health insurance premiums by as much as double digits to build up their cash reserves — in some instances to more than three times what states require. 

It is no secret that these companies generate substantial investment income from reserves. 

Here are just a few of the worst examples cited by Consumers Union: 

- Blue Cross Blue Shield of Arizona raised its reserves from $648 million in 2007 to $717 million in 2009  (more than seven times the amount required in that state). During that time, individual policy rates jumped about 40 percent. 

- Health Care Services Corp., which includes Blues plans in Texas, Illinois, New Mexico and Oklahoma, built up its surplus from $6.1 billion in 2007 to $6.7 billion in 2009, five times the minimum in those states.  Meanwhile, its plans’ rates rose by up to 20 percent a year. 

So which is it? Are the companies raising rates to build reserves or are they raising rates in advance of rising costs they are anticipating by Obamacare, or are they raising rates because of an actual rise in the delivery of actual medical costs? You cannot get a straight answer. 

If, in fact, health care providers are sitting on piles on cash that is far in excess of what it should be under state laws, why are they not rebating those surpluses to policyholders, as many automobile insurance companies do? 

Another example of how Obamacare has influenced the behavior of health care providers is that under the new federal law it mandates that no more that 20 percent of every premium dollar be attributable to administrative costs. Therefore many companies who currently run 26 percent of administrative costs for every dollar have now “reclassified” many administrative services as “medical” so they do not lose income and can avoid reducing overhead. 

FoxNews

Las Vegas, NV

President Obama is in Las Vegas, where he’s holding an invitation-only fundraiser for Senate Majority Leader Harry Reid, among other closed-door events.

The president is welcome; he should be courteously received.

That said, it’s too bad the president isn’t planning to mingle with average Nevadans and visit our shopping centers incognito, to get a look at what his economic policies have really wrought — what a city with 14.1 percent (official, understated) unemployment looks like, under an administration whose main economic goals seem to be the punishment and prevention of capital formation and business growth.

The president might have gotten an earful, here at ground zero of the Great Recession.

While “Obamacare” doesn’t go into full effect for four more years, taxes to support it kick in this fall, starting with a 10 percent tanning salon tax (why?) and a “1099″ tax that’s projected to suck an additional $17 billion out of private businesses in the next decade by making them file “1099″ snitch forms for virtually everyone to whom they pay a few hundred dollars.

Is that likely to help Nevada’s economy rebound, President Obama? Won’t it drive even more business “under the table,” where workers have less protection, illegal aliens thrive and many continue to draw welfare while paying no taxes at all?

Speaking of illegals, your administration just sued our neighbor to the southeast, Arizona, for enacting a state law that instructs local police to help enforce federal immigration law — despite the fact the Supreme Court ruled in 1976 that federal immigration law doesn’t intend “to preclude even harmonious state regulation.”

What’s the political message of this cynical lawsuit? That some 12 million illegals should feel safe continuing to occupy jobs that U.S. citizens have flocked to fill whenever they’ve had a chance, presumably. Just wait for the Democrats to grant you amnesty, invite in your extended family and send you all Democratic voter registration cards — as soon as the heat of November’s mid-term elections has passed — is that it?

Is that supposed to help Nevada’s unemployed and the local businesses they can no longer patronize?

What about “cap and trade” and your carbon tax, still promoted by you and your legislative ramrod, Sen. Reid, even after much of the basis for worrying about climate change has been shown to be a hoax?

Your administration admits this legislation will artificially drive up power bills and other energy costs. Mr. President, is that supposed to help cash-strapped Nevada firms create new jobs? If it causes air fares and gasoline prices to soar, will that help bring the tourists back to Las Vegas?

And a “VAT” or add-on national sales tax — is that next?

If the 2008 economic correction had been allowed to proceed without interference, mal-invested firms would have been forced to liquidate in bankruptcy. The buildings where new entrepreneurs might like to open would have passed into new hands, and could now be leased at far lower rates. Instead, many structures in Las Vegas now stand empty, owned by banks or by the FDIC or by “walking dead” owners who dare not rent out the premises at lower rates lest their overdue notes be called. It’s a weird economic limbo, and it’s not helping.

Why so many costly bailouts, Mr. President? Why so much bypassing of America’s fine bankruptcy courts? Was it because your union supporters objected to what might happen to their contracts, which helped sink firms like General Motors? Is that why you intervened to arrange for the government and the unions to take over that firm? How many other industries will now be taken over? We already know about health care. The banks, too?

And speaking of unions, is “card check” still in play? The prospect that workplaces could be unionized without a worker secret-ballot majority — that’s supposed to encourage local business investment and growth?

Meantime, the inflation caused by all this spending keeps prices and wages artificially high. Is that supposed to help?

Nevadans have a long tradition as hard-working frontier entrepreneurs. Nevadans would rather have a real, private-sector job than a handout. How many of your high-level appointees have any experience creating such jobs, Mr. President? Do you see that as a problem?

Las Vegas Review-Journal

By Philip Klein

In order to protect the new national health care law from legal challenges, the Obama administration has been forced to argue that the individual mandate represents a tax – even though Obama himself argued the exact opposite while campaigning to pass the legislation.

Late last night, the Obama Department of Justice filed a motion to dismiss the Florida-based lawsuit against the health care law, arguing that the court lacks jurisdiction and that the State of Florida and fellow plaintiffs haven’t presented a claim for which the court can grant relief. To bolster its case, the DOJ cited the Anti-Injunction Act, which restricts courts from interfering with the government’s ability to collect taxes.

The Act, according to a DOJ memo supporting the motion to dismiss, says that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.” The memo goes on to say that it makes no difference whether the disputed payment it is called a “tax” or “penalty,” because either way, it’s “assessed and collected in the same manner” by the Internal Revenue Service.

But this is a characterization that Democrats, and specifically Obama, angrily denounced during the health care debate. Most prominently, in an interview with ABC’s George Stephanopoulos, Obama argued that the mandate was “absolutely not a tax increase,” and he dug into his view even after being confronted with a dictionary definition:

OBAMA: George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. Otherwise, you wouldn’t have gone to the dictionary to check on the definition. I mean what…

STEPHANOPOULOS: Well, no, but…

OBAMA: …what you’re saying is…

STEPHANOPOULOS: I wanted to check for myself. But your critics say it is a tax increase.

OBAMA: My critics say everything is a tax increase. My critics say that I’m taking over every sector of the economy. You know that. Look, we can have a legitimate debate about whether or not we’re going to have an individual mandate or not, but…

STEPHANOPOULOS: But you reject that it’s a tax increase?

OBAMA: I absolutely reject that notion.

At the time Obama made that statement, the Senate Finance Committee had just released its own health care bill, which clearly referred to the mandate penalty as an “excise tax.” But in later versions, the word “tax” was stripped, because it had become too much of a political liability for Democrats. The final version that Obama signed did not describe the mandate as a tax, and used the Commerce Clause — not federal taxing power — as the Constitutional justification for the mandate.

“”This is an about face from what is laid out in the law,” said Karen Harned of the National Federation of Independent Business, which joined the Florida lawsuit against ObamaCare. “In the text of the healthcare law, the findings for passing an individual mandate specifically rely on the effects of individuals on the national economy and interstate commerce. Nowhere in the findings is the mandate referred to as a tax. The Justice Department is now calling it a tax to try and convince the court not to rule on whether or not Congress exceeded their authority under the Commerce Clause by legislating that all citizens must purchase private health insurance or face a penalty.”

Put another way, the administration is now arguing in federal court that Obama signed a massive middle-class tax increase, in violation of his campaign pledge.

The American Spectator

So Much For ObamaCare’s Savings

Health Care: The Democrats’ reform is barely out of the gate and the Congressional Budget Office already says its previous cost estimate was too low. Either the bill’s supporters lied or they’re profoundly ignorant.

Either way, they are not fit to serve the country, much less rule it, which many of them seem to believe is their divine right.

As noted on these pages and elsewhere, government programs always cost far more than their original projections. Medicare has cost more than 10 times as much as initially estimated. It took Medicaid, the government’s other mammoth health care program, a mere five years to spend twice as much as early estimates said it would.

At the state level, the story remains the same. Maine’s 2003 program to cover the uninsured has already cost taxpayers there $150 million, but it was sold as a plan that would save them money. Tennessee’s arrangement became such a parasite — eating up 40% of the state’s budget by 2008 — that it had to be shut down. Massachusetts’ program overran cost projections so sharply it had to throw 30,000 beneficiaries off the rolls last year.

Despite this clear history, lawmakers always promise the next program won’t cost taxpayers — or that it’ll save them money.

They get support from the media that are rarely interested in what nanny-state programs cost, voters who simply are unaware of the past and too busy with their lives to think about today, and a large segment of the public that doesn’t care what the costs are because it craves yet another government entitlement.

As we recall, President Obama said his party’s health care overhaul wouldn’t increase the deficit by a single dime and would actually “bend the cost curve downward.” Supporters in and out of Congress went along with the charade.

At some point, Americans will have to deal with reality, such as the CBO’s latest analysis. Director Douglas Elmendorf now says the program will probably cost at least $115 billion more from 2010 to 2019 than had been originally thought. So it is now officially a trillion-dollar program — though unofficially, meaning realistic estimates made outside the federal government, it could cost as much as $3.5 trillion over its first 10 years.

The new estimate, released Tuesday, includes “administrative expenses for the Department of Health and Human Services and the Internal Revenue Service for carrying out key requirements of the legislation” as well as “explicit authorizations for future appropriations for a variety of grant and other program spending.”