The new model for an old system

Or, "I told you so," again.

The current version of ObamaCare is a watered down amalgamation of compromises built on one Progressive premise: Single Payer System is the goal.  They started their overhaul of 1/6th of the US economy with that end in mind, weren't able to get there completely this time (mostly due to voter outrage), and settled on something that Conservatives will still hate for too many reasons to list and Progressives will despise because it's not pure enough.  But, as Bob says, "baby steps".
Well cool.  But let's take a peek into the future and see what the adults over in Great Britain are doing, now that they've had the NHS single-payer system for sixty years:

An investigation by The Sunday Telegraph has uncovered widespread cuts planned across the NHS, many of which have already been agreed by senior health service officials. They include:
* Restrictions on some of the most basic and common operations, including hip and knee replacements, cataract surgery and orthodontic procedures.
* Plans to cut hundreds of thousands of pounds from budgets for the terminally ill, with dying cancer patients to be told to manage their own symptoms if their condition worsens at evenings or weekends.
* The closure of nursing homes for the elderly.
* A reduction in acute hospital beds, including those for the mentally ill, with targets to discourage GPs from sending patients to hospitals and reduce the number of people using accident and emergency departments.
* Tighter rationing of NHS funding for IVF treatment, and for surgery for obesity.
* Thousands of job losses at NHS hospitals, including 500 staff to go at a trust where cancer patients recently suffered delays in diagnosis and treatment because of staff shortages.
* Cost-cutting programmes in paediatric and maternity services, care of the elderly and services that provide respite breaks to long-term carers.

 Hm.

Oh yes.  And this:

The Sunday Telegraph found the details of hundreds of cuts buried in obscure appendices to lengthy policy and strategy documents published by trusts. In most cases, local communities appear to be unaware of the plans. (emphasis mine)

The "trusts" referenced above are Primary Care Trusts, government agencies in charge of patient health decisions like when, where, how, and by whom patients are treated.  Way to be forthcoming and honest there, buckos.

Hm, indeed.  So what we've got here is pretty much what I've said a few times before.  Single-payer systems lead inevitably to rationing.  Who gets rationed out first?  The unproductive (ie. those who suck up more tax dollars than they pay in).  Which means the very young, the very old, and the infirm.  Go back and look at the list of cuts made by the NHS.  Who gets affected most?

Exactly.

Do you know anyone who is very young, very old, or infirm?  Do you want some bureaucrat in a dark office in Washington making medical decisions that will affect the quality of life of those people?  Do you want government inefficiencies (shortages, essentially) to be responsible for the death of those people?  And then these folks who think they can run your life, health, and death better than you can have the elephantine stones to BURY THEIR CUTS TO YOUR HEALTH SERVICES IN THE DAMN FOOTNOTES OF DOCUMENTS NO ONE WILL EVER READ?

You people sicken me. 

Which would be fine, except that if I get sick in a single-payer system, I might never get well again.

A very scary sentence

CSMonitor:

The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.”

And Why Would That Be?

NYT:

Fearing that health insurance premiums may shoot up in the next few years, Senate Democrats laid a foundation on Tuesday for federal regulation of rates, four weeks after President Obama signed a law intended to rein in soaring health costs.

After a hearing on the issue, the chairman of the Senate health committee, Tom Harkin, Democrat of Iowa, said he intended to move this year on legislation that would “provide an important check on unjustified premiums.” 

 That would be the same NYT who didn't report on the economic certainty of premium increases due to ObamaCare, because when it comes right down to it, they are just a mouthpiece of Our Dear Leaders.

Thus:
How to Nationalize Healthcare, in 6 easy steps.
Step 1: Mandate insurance coverage for all individuals.
Step 2: Require insurance companies to provide coverage to all individuals, regardless of health risks.
Step 3: Impose price ceilings to prevent insurance companies making a profit.  Simultaneously demonize the insurance companies for their "cruel and heartless nature".
Step 4: Watch the insurance companies go bankrupt.  Quickly.
Step 5: Gleefully introduce all formerly insured citizens to the government run health care exchanges.
Step 6: Profit!  Or, you know, not.  This is the government, after all.

Bribes, kickbacks, and other political booty

If the health care insurance reforms revered by liberal democrats are so great, then why the hell'd you have to buy off so many members of congress, Harry? Shouldn't people just naturally want to, you know, buy in on their own?

Of course, "buy in" is the appropriate term now, what with mandates and penalties and all.

Compare and Contrast

Republican health care plan: $61,000,000,000 over 10 years. Which is 3.5% of...

Democrats health care plan: $1,800,000,000,000 over 10 years. That's trillion with a T.

Change I can believe in.

Sad but true

...or is it just sad?

Signs

My favorite sign from the Washington DC Tea Party this past weekend:

Explain this to me

Regarding Grimp's earlier post on the potential "fees" (read: tax) on insurance companies as a way to "defray costs" of the public insurance plan:
I can one-up you.

How about a "fine" (read: tax), administered by the IRS, who become the defacto insurance cops, on people who don't buy health insurance. Individual mandates, this is called. Which is Washington-speak for "we're from the government and we're here to help".

A bipartisan group of senators huddled in the afternoon to decide whether to move forward on an overhaul plan that Senate Finance Committee Chairman Max Baucus (D., Mont.) began circulating over the weekend. The plan includes some of the stiffest penalties Congress has proposed for Americans who don’t carry health insurance coverage.

So the "public option" is out in the Senate version of the bill, but an enforced tax on families who don't purchase health insurance (which is, by nature, a completely voluntary act) is in.

So if I don't have insurance currently because I can't afford it or don't need it, you're going to fine me anywhere from $750 to $3800 if I don't go ahead and pay for something I already can't afford or don't need.

Yeah, makes sense to me.

If you close your eyes, they aren't really there

The party of "do-nothing" has done something, but it's not being talked about.

Obama and the democrats constantly deride Republicans as opposing liberal schemes over nothing more than *gasp* politics, but then say they "just want the status quo" and don't actually provide legislative alternatives. What a crock.

The latest in a line of proposals from the right side of the aisle, HR 2520, the Patient's Choice Act, was introduced May 20, 2009, but has languished in the House Ways and Means Committee ever since and will never see the light of day.

For one thing, it introduces tort reform, something Sarah Palin talked about yesterday. For a taste of what the 300 page bill includes (as well as a few more reasons why it won't ever be brought to the floor for a vote) see this article at The Moderate Voice.

What drives health care costs up?

Being the free-market enthusiast that I am, I decided to sit down and take a look at what the medical field says are the primary drivers of health care costs. What I've discovered has been an interesting revelation: I know that the health care system (providers, insurers, patients, government) is complex, but until I actually started looking at what makes up the individual pieces of the complex puzzle, I did't really appreciate what makes it tick.
So, for a quick-ish summary of the relevant factors, let me refer you to a study done in 2003 by the National Institute of Health Policy and the University of Minnesota School of Public Health (.pdf). Yes, the study was from 6 years ago, but the factors will be the same today.
Here's how the NIHP saw the health care industry's cost drivers:

A) Provider Costs
- Physician compensation. Related to type of provider (GP vs. specialist, inpatient vs. outpatient) and productivity (# of patients seen annually)
- Malpractice premiums and so-called Defensive Medicine (i.e. doing multiple tests "just to be sure" so the doc isn't sued for "not doing enough").
- Supply and Demand. What you would expect. Demand for physicians is dependent in large part on the demographic of the local area (old, young, rich, poor, ethnicity, etc). Also, a larger supply of physicians (specifically specialists) can increase the client demand over time. One point that was made in this section had to do with the doctor's preference for "Evidence-Based Medicine" vs. "Consensus-Based Medicine", which was an interesting point to me.

B) Hospital Costs
- Wage pressure. A shortage of health care professionals (say, the ongoing nursing shortage) will create an upward shift in price (i.e. higher salaries) to attract the workforce.
- Technology and pharmaceutical costs. Self explanatory, and obviously high cost drivers. We must be aware of what are called "outliers". Think of the "million dollar babies" or patients with rare or complex disorders. These outliers will eat up a disproportionate amount of hospital resources relative to the general population.
- Hospital Competition. This one I found interesting. Again, being the free-marketeer that I am, I am pro-competition, viewing it as the best path to cost containment, innovation, and business success over the long term. What this paper suggests, however, is that in the health industry, one result of competition is a sort of health care "arms race", wherein competing hospitals "will employ more capital and equipment, produce more expensive medical care and incur higher costs than hospitals operating in monopolistic markets." Essentially, competing hospitals want to show prospective future customers that they have the better technology, the better specialists, and can handle the harder cases than their competition, even though a broad market for same is not necessarily there. Result - high up front expenses for the hospital not matched by consistent cash flow from those resources. Thus, those costs must be subsidized elsewhere (i.e. patients who don't use those high tech resources will pay the hospital's premium anyway just by virtue of being a patient there).
- Consolidations. They don't always save money, though they are a fact of business life. This is true in any industry. *ahem*TimeWarnerAOL*ahem*
- Capital Improvements. This is driven primarily by two factors: the age of the facility as a whole, and the local patient demographic. New facilities need to be upgraded, both for new technology and for appearances. Who wants to give their money to a dilapidated hospital with poor lighting and few windows? As far as the patient demographic, older patients have different needs than younger ones. Hospitals in retiree-laden Florida probably should all have state-of-the-art cardiology and orthopedic centers.

C) Pharmaceuticals
- R&D, legal, marketing, and government compliance are primary cost drivers for the pharmaceutical industry. I don't even want to get into the pros and cons of the drug industry or pharmaceutical drugs in general. Save that debate for somewhere else.

D) Consumer Behavior
- The paper stresses the demands of consumers for the newest technology, drugs, procedures, etc as a huge cost driver, saying, in effect, if the consumer didn't want these high-cost procedures, there would be little to no push by the health care industry to provide them. Which is true, taken by itself. That's economics 101. It's simplistic, but true. But remember that consumer behavior is driven, in large part, by industry advertising. It's a sort of vicious circle.

E) Insurance Costs
- The Insurance Payment System. The vagaries and complexities of the health insurance system lead to inefficiencies, confusion, overpayment, underpayment, delay in payments, and other problems.
- Administrative costs. This includes government regulation and coverage mandates, which impact consumer costs directly. A 2008 study (.pdf)by the Council for Affordable Health Insurance found almost 2000 insurance coverage mandates nationwide, which adds between 20-50% to the cost of health insurance premiums depending on the state you live in.
- Cost Shifting. This innocuous term includes one of the most controversial topics in the politics of health care: the uninsured (which includes illegal aliens). Medical personnel are required by law to provide some basic level of care to those who cannot pay for the service. There are direct and indirect costs borne by the provider that are not offset by payment from the patient. These costs must be recouped elsewhere. That "elsewhere" is you and me.
- Risk Pool Instability. Another vicious circle. Higher medical costs mean higher insurance premiums. Which means some will opt out of the insurance system in favor of self-insurance. Typically, these will be younger, healthier people. This skews the pool of insured upward with regard to age and overall health. From an actuarial standpoint, this pushes the future costs of the risk pool up, which means premiums will rise further.

F) Other Costs
There are other significant cost drivers in the health care system that this paper does not touch on, but should have.
- Personal medical device cost and prevalence. Including pacemakers, hearing aids, oxygen machines, mobility devices, etc.
- Hospital Operations. The efficiency vs. quality debate of medical care.
- Demographics. The aging (and increasing longevity) of the population.
- Health System Capacity.
- Preventative Care. Cost vs. Benefit.

Not that this list is particularly exciting, or even complete, but it does give a sense of the complexity of the situation. What I'm going to try to do, or find someone else who has already done it well, is to come up with free market reforms that would improve (i.e. reduce the cost of) as many of these points as possible. If someone can come up with the easy-but-wrong government "fix" for health care/insurance reform, the case for free market reform should be put up right next to it as a counter argument.

Complications

Well, the health care reform bill is not going to be voted on in House or Senate before the congressional holiday that starts in August.
I do want to point you to this post though, not so much because of the topic of the post per se (Dems trying to obstruct Republican efforts to communicate with their constituents) but because of the chart.
See this chart (.pdf) that shows the incredibly convoluted nature of ObamaCare. You don't even have to read the chart. One glance tells you all you need to know. If you do read it, however, it's even worse.

Uninformed

A line in Grimp's last post reminded me of something I read yesterday.

And while they [politicians] remind you how you are unengaged and uninformed...

I find this interesting and ironic. Literally no member of congress read the entirety of the porkulus bill. It was too big and rushed out the door too fast for anyone to read it. It was rushed because Mr. The One and his friends said it had to be rushed, the economy was going to collapse tomorrow if it wasn't passed, strike while the iron is hot, etc etc. As Grimp said, look where it's gotten us. The dire emergency wasn't really averted or helped at all by rushing a crap piece of legislative pork out the door.
The health care bill is another matter. There is no, literally no, excuse for rushing a health care bill. Health care costs cannot be definitively shown to significantly impact or be a danger to the US economy. The economy is certainly not in danger of collapsing again tomorrow (or next week or next month or in six months) if Our Politicians don't do something to radically overhaul the health care industry.
I bring up the stimulus bill and the health care bill for one reason: Steny Hoyer's honesty.

House Majority Leader Steny Hoyer (D-Md.) said Tuesday that the health-care reform bill now pending in Congress would garner very few votes if lawmakers actually had to read the entire bill before voting on it.

“If every member pledged to not vote for it if they hadn’t read it in its entirety, I think we would have very few votes,” Hoyer told CNSNews.com at his regular weekly news conference. (via cnsnews.com)

Unengaged and uninformed. Yep. That describes Washington to a "t".

Teenagers and their sex drive

The Political Law of Unintended Consequences continues...except that this consequence was so very obvious, you'd have to be stupid...or a liberal...to not see it coming.
From the UK:

A multi-million pound initiative to reduce teenage pregnancies more than doubled the number of girls conceiving.

The Government-backed scheme tried to persuade teenage girls not to get pregnant by handing out condoms and teaching them about sex.

Original article here, commentary here. A PW commenter puts it very succinctly:

Don’t ya love it? Am I the only one to notice that if a leftist/liberal/democrat says that doing “A” will stop “B” from happening then YOU KNOW that what’s going to REALLY happen is more “B”?

Rents high?
Introduce rent control = Higher rents.

Teens getting pregnant?
Teach them birth control = More teen pregnancies.

High cost of Health care?
Government backed health insurance = Higher health care costs.

Economy in recession?
Government bailouts and buyouts and stimulus = Depression.

High murder rate in cities?
Eliminate citizens owning guns = highest murder rate in U.S.

Couldn't have said it better myself.

The Travesty that is Nationalized Health Care, a continuing series

Yes, I keep beating this drum. And I will continue to do so until the stupid idea is defeated and shown for the ignorant sham it is.
Statist Health Care, by the numbers:

13: The number of teeth that British veteran Ian Boynton pulled out himself with pliers “because he couldn’t find an NHS (National Health Service) dentist… [he] could not afford to go private for treatment so instead took the drastic action to remove 13 of his teeth that were giving him severe pain.”

More:

1,500,000: The number of Canadians who do not have — and cannot find — a general practitioner/primary care physician due to shortages in medical staff

Read it all.

An Instructive Video

Health Care, again

Universal Health Care. Sounds like a noble undertaking, yes? Health care is a constitutionally mandated "right" for every American. Wonderful.
A Umiversity of Minnesota professor and expert on health care economics testified before the House subcommittee on health Tuesday, and here's the summary of his research:

To achieve a 30% net reduction of the uninsured, it will cost taxpayers about $1.3 Trillion over the next 10 years.
To achieve a 70% net reduction of the uninsured, it will cost taxpayers about $2.7 Trillion over the next 10 years.
To achieve a 100% net reduction of the uninsured, it will cost taxpayers about $4 Trillion over the next 10 years.

So, let's do a little bit of math here.
In 2010, there Census estimates there will be about 310.2 million people in the US. By 2020 (let's call that the end of the 10 year period), Census estimates about 341.4 million people.
According the Census data, the US averages about 2.6 people per household. I want to use Households as the relevant statistic, because most of us live in two income families, or at least the insurance we pay for covers a family and not just a single person.
So, extrapolating on the 2.6 people per household, let's say that in 2010 there will be somewhere north of 119.3 million households and in 2020 there will be about 131.3 million.

Let's take the $4 Trillion number, so we make sure and cover all of the presently uninsured, which is, of course, the goal of Universal Health Care.
We'll assume (simplistically, for the sake of the math) that the $4T will be spread evenly over the 10 year period. That equals $400B/yr.
Divide $400B by the number of households and you get this:
2010: $400B / 119.3M = $3352/household
2020: $400B / 131.3M = $3046/household

That number you're looking at is the amount of additional tax burden per household. The number obviously drops slightly each of the 10 years because the population grows but we're assuming the annual expenditure on health care remains constant. Note that in reality, this will not be the case. In actual fact, the initial (start-up) costs will be high for a few years, then presumably drop somewhat, but continue to rise indefinitely over time (via inflation, if nothing else, but there are many other factors that will cause cost increases).

But again for simplicity, let's stick with the numbers as figured. For comparison sake, I pay premiums to my company's HMO plan of $3480/yr. For an apples to apples comparison (tax increase vs. current premiums paid), it's a net decrease in my out of pocket cost since presumably my deductibles/coinsurance/etc would be comparable. Great!

Or...is it great? What benefit do I get from the $3352 increase in my tax bill?
That's a great questions, Chris, I'm glad you asked.

Again per the good Doctor from Minnesota:

That 4 trillion estimate over 10 years assumes a public option plan with Bronze, Silver and Gold levels in the proposed insurance exchange with a subsidy for premium support that is income-adjusted and calibrated for assistance at the Silver level. The Silver level is equivalent of PPO plan with medium levels of generosity, something with 15% coinsurance rate, manageable copays and average level of access to physicians and hospitals. We accounted for the public plan being reimbursed at 10% above Medicare reimbursement, which is also 10% below commercial insurance premiums.

So. "Medium levels of generosity" = no better than average health care provided. "Average level of access" to doctors. "Manageable copays". A 15% coinsurance rate (mine is 10%, btw). So essentially no better service than what I'm getting now, for roughly the same out of pocket. Yet the health providers are getting 10% less than they do now. If you were asked to do the same job you do now, but take a 10% pay cut, how long do you think you'd stick around in that job? Now do you see why Great Britain has a shortage of doctors (especially specialists)? Oh yeah, one more thing: the 10% above Medicare reimbursement amount? That's not set in stone - that's just the initial amount. Anyone else want to bet that as costs rise (and they will), the first thing Your Government Health Insurer will do is reduce payout rates to providers? Fewer doctors available means that "average level of access" becomes a "poor level of access" over time.

So if I personally am not getting a better deal with my shiny new Gov't Health Care Plan, surely the uninsured are getting help! Those poor people! That was a stated goal of Universal Health Care, was it not?
Assume each year for the 10 year period, 1/10 of those uninsured now are on the Gov't Plan. How many people is that? Well, the Hoover Institute says: 11% of the population are considered Long Term Uninsured (they don't get coverage for at least a full year). In 2010, that's just over 34 million folks. But wait, there's more! The Kaiser Foundation says: 19% of the uninsured can afford it but don't pay for it. 25% of the uninsured are eligible for some current program (employer provided, SCHIP, medicaid, etc) but don't enroll. So that leaves 56% of the uninsured for whom affordability is an issue. 56% of 34 million people is a little over 19 million. If you want to take out the illegal immigrants who are sucking up health care resources but can't pay for them, you drop from 19 million to 15 million or so. But we'll leave it at 19 million just for the sake of argument.
19 million people uninsured who can't afford to get insurance. 1/10 of that would be 1.9 million people that we can move each year onto the government teat. $400 Billion divided by 1.9 Million equals roughly $210,500 per uninsured.

Put it another way: We are proposing spending $400,000,000,000 per year for the next 10 years to move one-half of one percent of the American population per year from uninsured status onto a (marginally useful, massively wasteful) insurance plan. The rest of us that currently have insurance or can afford it also get put onto this insurance plan that provides a low-to-average level of care, massive governmental intrusion into our personal choices, and the inability to opt out into anything better.

Now does it seem like you're getting your (tax) money's worth? Is this really the best way to go, just so we can say "hey! everyone's covered now!"?

Unpacking ObamaCare

Keith Hennessey, a Bush 43 economist, has a great blog post on ObamaCare, mostly without political spin or overheated rhetoric (says the guy who has had a couple of overheated-rhetoric posts on this very topic). Hennessey takes the letter Obama sent out to Kennedy and Baucus, unpacks what Obama actually says, compares it to Obama's (and other Democrats) past proposals on health care, and summarizes the meaning very well. Worth your read, partly as a way to see Obama's triangulation on health care, and partly to get an idea of what might be coming later this year.

Here's Obama in his own words:

Health care reform must not add to our deficits over the next 10 years — it must be at least deficit neutral and put America on a path to reducing its deficit over time.

I have yet to hear a compelling any coherent reason why health care "reform" would lead to lower budget deficits. Come on. Anyone? Give me your best shot.

Is this really a surprise to anyone?

Hate to say I told you so, but I told you so. Not that that's any consolation.
Here we have yet another proponent of nationalized health care taking the single-payer health care system's cost/benefit analysis to its logical conclusion. To wit: the elderly won't be around long enough to repay the system for the inordinate amount of resources expended on extending their lives. Therefore, NO SOUP FOR YOU.

Where is the AARP on this issue? I thought Boomers, et al were supposed to be the greatest voting bloc ever! Why is there no outrage about this? Because it's too hard to imagine? Is it willful blindness? Because it's too many years down the road? Just because someone says NOW "no, that's not going to happen" doesn't mean it won't happen AT SOME POINT. It's the logical conclusion.

A side question: it's almost a given that medical tourism will rise if/when this happens. But what's the chances a parallel "underground" health system will arise in America? A "black market" in health care, so to speak - and I'm not talking about alternative medicines and marijuana here. I have no idea. The thought just occurred to me.