The Angry Men on Health Care Reform

Hola muchachos! It’s your hombre-in-chief Angry New Mexican again, serving as your editor du jour since my angry hermanos are still hangin’ out in the backyard… smoking the peyote or something. Anyway, I saw a really interesting article by David Goldhill on health care reform. After a few emails where we trolled each other repeatedly, Angry Overeducated Catholic had the most cogent response. Without further ado, here it is…

Angry Overeducated Catholic

I realize it’s been a few days, but having gone back and read the Atlantic article Angry New Mexican started this with again, in depth, I just wanted to commend it to everyone. It’s a really great article, and it puts to rest some red herrings in this debate:

1. Uncontrolled costs are not due to rapacious insurance companies, evil drug companies, corrupt doctors, greedy lawyers, wasteful patients, or any other bad actor…or rather they are due to all of them because it’s the perverse incentives in the system itself that are to blame.
2. No government plan—not single-payer, not a public option, not an NHS—that continues to make comprehensive health insurance the primary payment method will succeed. Indeed things like a single-payer plan or NHS will likely make things worse because they’ll push costs even further from the consumer.

As ANM said, the author believes that only the scrapping of comprehensive health insurance for most folks will address our core problem…and raise other problems that other things must address. I basically agree.

I also agree with Angry Military Man that requiring Americans to purchase comprehensive insurance is unconstitutional. But I agree with ANM that everyone having comprehensive insurance is a good thing. In fact, given our compassionate decision to make treatment mandatory for crises, I consider it a basic infrastructure of our society.

So here’s my pitch:

1. Every American, every man, woman, and child, gets a basic comprehensive insurance package from Uncle Sam: $1 million lifetime coverage, with a $100,000 lifetime deductible, and a yearly deductible set to 10% of your income from the last year.

   No premiums. No yearly paperwork (on your part). No IRS employees going over your precious medical records, instead the IRS simply sends HHS your income summary each year. You will have to document that you’ve spent the deductible, but that shouldn’t be hard for catastrophic cases.

   That’s $300+ trillion dollars potentially, but spread out over a whole population, and it’s not like private catastrophic insurance doesn’t also have to find the money to pay out… Now, 2,500,000 folks kick off each year, so as an upper bound, we’re looking at around $2.5 trillion a year, and I’m guessing it’s quite a bit less, thanks to violence, drugs, car accidents, etc. (Incidentally, the actual average for end-of-life care for the more expensive older patients (over 65) appeared to be about $51,500 (current dollars) in 1996…let’s assume that’s actually risen 10% year over year, so it’s basically doubled twice by now to around $200,000…assuming that all lifetime deductibles are met before the end of life period, and that the period lasts 2 years on average, that’s $400,000 per person, meaning our payout is much less than estimated above.)

   Now, where does private insurance come in? Well, make it taxable, and let the market sort itself out. Want a lifetime deductible under $100,000? Need more than $1 million in lifetime coverage? Want smaller yearly deductibles? Want an HMO? Want comprehensive care? Whatever you want, fine, but no mandates, no subsidies, and no government interference (other than standard anti-fraud, etc.).

   Want to bar existing conditions? Fine! Want to pay for 8 abortions/year per teenage girl? OK! Whatever, we don’t care because it’s no longer our business…

2. Abolish Medicare. Halve Medicare deductions on pay and put the half remaining towards administering the catastrophic payouts. That’ll give us $100 billion or so per year, enough for full payouts for 100,000 citizens.
3. Make HSAs, unlike insurance, fully tax deductible…so, really insurance is deductible, because—surprise—you’ll pay for it out of the HSA! But it’s no more deductible than any other medical expense. Hooray!
4. The article’s remaining ideas are pretty good:
   

   “For lower-income Americans who can’t fund all of their catastrophic premiums or minimum HSA contributions, the government should fill the gap—in some cases, providing all the funding. You don’t think we spend an absurd amount of money on health care? If we abolished Medicaid, we could spend the same money to make a roughly $3,000 HSA contribution and a $2,000 catastrophic-premium payment for 60 million Americans every year. That’s a $12,000 annual HSA plus catastrophic coverage for a low-income family of four. Do we really believe most of them wouldn’t be better off?
   Some experts worry that requiring people to pay directly for routine care would cause some to put off regular checkups. So here’s a solution: the government could provide vouchers to all Americans for a free checkup every two years. If everyone participated, the annual cost would be about $30 billion—a small fraction of the government’s current spending on care.”

   These are the fringe cases that account for so much of the emotional impact of the bogus “47 million uninsured” number. So, yes, just pony up and pay.

   I’d be tempted to make that “one check-up every two years” instead “one check-up per year for kids up to 18 and adults over 35”, since most young adults are least vulnerable to the ill effects of missing doctor’s visits.

   Illegal immigrants? They get treated as they do now, in the shadows…but only for crisis care. However, certainly low cost plans and insurance will arise to meet that market, or out of pocket costs will cover all but the worst illnesses. And, those who become legal and start filing taxes get roped in.

   So the only question left: how far from revenue neutral is this approach?

    

Fixed That For You!: The motivations of congress critters and CEOs

Welcome to our first regular installment of “Fixed That For You!”.

A little known fact about the 12 Angry Men is that we have an internal e-mail list wherein we discuss potential stories, troll one another, and in general have a good time. One of the frequent memes that tends to crop up is the comment “Fixed That For You!” followed by an edited version of someone’s statement. These tend towards gross misrepresentation, and hilarity, so we’ve decided to share them with you, dear readers!

This week’s topic began as a debate on whether the government or private industry was better suited to serve the needs of the public.

---

Herein lies the problem. Government types, especially LIBERAL government types believe they are smarter than your average American, and that they know what is best for you better than you do. It’s a sick and arrogant version of the “white man’s burden”, and they don’t even seem to realize how condescending it is. When coupled with corrupt government officials out for their own pocketbook, it creates an absurd system. Promising the moon, charging for the sun, and pocketing so much that you only deliver next to nothing.
-Angry Midwesterner
 

Excellent rant. But let me fix that for you! Here’s the Subprime Crisis edition:

Herein lies the problem. CEO types, especially conservative CEO types believe they are smarter than your average American, and that they know what is best for you better than you do. It’s a sick and arrogant version of the “white man’s burden”, and they don’t even seem to realize how condescending it is. When coupled with corrupt CEOs out for their own pocketbook, it creates an absurd system. Promising the moon, charging for the sun, and pocketing so much that you only deliver next to nothing.
-Angry New Mexican
 

Now, now, let’s give Barney Frank and Chris Dodd their due, please.

Herein lies the problem. Congressmen, especially Democratic Congressmen believe they are smarter than your average American, and that they know what is best for you better than you do. It’s a sick and arrogant version of the “white man’s burden”, and they don’t even seem to realize how condescending it is. When coupled with corrupt Congressmen out for their own pocketbook, it creates an absurd system. Promising the moon, charging for the sun, and pocketing so much that you only deliver next to nothing.

There, fixed that for you.
-Angry Overeducated Catholic
 

Let’s give Barney Frank and schloads of Republicans their… *ahem*, “due”, please.

Herein lies the problem. Congressmen, especially Democratic Congressmen believe they are smarter than your average American, and that they know what is best for you better than you do. It’s a sick and arrogant version of the “gay man’s burden”, and they don’t even seem to realize how condescending it is. When coupled with corrupt Congressmen out for their own pocketbook, it creates an absurd system. Promising the moon, charging for the sun, and pocketing so much that you only deliver next to nothing.

There, fixed that for you.
-Angry Midwesterner
 

 

Sponsor a Vegetarian

I hate hippies. They smell bad, they disregard the laws of this nation, support terrorism, are lazy, and are a general nuisance. Hippies should be treated like Kudzu, they shouldn’t be allowed in most states, and where ever we find an area infested with them, we ought to call in the Army Core of Engineers to help us solve the ecological disaster created by their presence. After all, I’m sure that the Army Core of Engineers know the answer to my favorite joke: “What’s orange and looks good on a Hippy?” But this article isn’t about hippies, or rather it isn’t about ALL hippies. It’s about a special breed that call themselves Vegetarians, Vegans, and other such monikers. These folks have one thing in common, a dastardly sinister plan.

They seek to cause the extinction of the noble cow.

Yes, you read that right, and whether the Hippies are aware of their plan, or not (because let’s face it when you smoke so much Mary Jane, are you really aware of anything anymore? Do you even still count as intelligent life?), make no mistake, this is their goal. Cows, or more properly, Cattle, are not a natural animal. Much like modern corn has strayed so far beyond its Teosinte origins, so have Cattle. They are dependent on us for their livelihood and cannot survive in the wild without us, just as we are dependent on them for their tastiness, and could not have a hamburger without them. But some people hate Cows so much that they want to see an end to our symbiotic relationship, and thus an end to Cows. They won’t stop till every last Cow in the world is deprived of its purpose and cast into the wild to die painfully. Their goal is for cattle to join the Dinosaurs in oblivion.

But we are not helpless against the Hippie menace! No, far from it! If we act together we can reverse the tide and save the future of cattle everywhere. A solution has been discovered by another writer who has put together an elegant but simple plan on his website. To help his plan succeed all we need to do is sponsor a vegetarian. It’s simple, effective, and fool proof. Simply find a friend of yours who refuses to eat meat and inform them you are sponsoring them, and then eat three times as much meat as you normally would. By doing this you not only counteract their part in the Crusade Against Cows, but push the tide backwards even further, helping to preserve a Bright Bovine Future. Once they see the light and agree to help preserve the future of our cattle, you can then either go back to eating a normal amount of delicious cows, or sponsor another vegetarian.

Act now! The future of our tasty and noble friends hangs in the balance!

-Angry Midwesterner

 

Magnetic Resonance Imaginings

A member of my family has a jaw related problem where the little pads behind the mandible bone are displaced upwards causing mal-occlusion of the teeth, popping, and some significant pain. Unfortunately this is classified as TMJ which is not covered by either dental or medical insurance. (I never have figured why this particular body part is unique.) It tums out that there is a surgeon in Florida who fixes this by taking a bit of belly fat and transplants it behind the bone where it transforms into new cartiledge relieving the problem. Success rate is 100%. Cost is $50,000 not counting travel and lodging for the week in Florida. (Remember—not covered by insurance.)

Anyway, diagnosing this problem leads me to my latest rant. In order to identify that TMJ was indeed was the culprit, a MRI was used. Imaging my surprise when when I got a bill for $1890.00. ( They didn’t have my insurance information and somehow this procedure slipped through a crack in the authorization process—I guess discovering that the problem is TMJ related IS covered—at least once.)

After giving them the revised insurance information, the new bill was about $200.00. Fascinated, I delved into the explanations of benefits—that fine printed gobbly-gook that insurance companies send to you that makes very little, if any, sense. The original $1890 was discounted by $920 since this was part of the agreement with the insurance company. 80% of the balance was then covered leaving me with a portion of the deductable and the 20% to pay.

I asked about the $920 discount. If I paid cash for the entire original amount minus the discount, the hospital could receive their money 6-9 months earlier (this is Illinois and our Governor is balancing the budget by not paying the State’s obligations.) No. Not allowed. If you actually pay for the procedure you have to pay the full $1890.

So why the hell does a MRI cost $1890 in the first place. The reason stated is that the machines cost over $3,000,000 and they have to recover the cost. Well, the hospital cost $48,7000,000 and the cost isn’t allocated over the 295 beds in one night. A night in the hospital isn’t $165,000. A MRI system should remain serviceable for at least 10 years.

Unfortunately hospitals are all about competition. The replacement cycle for a MRI seems to be about 18 months. They want the entire cost of the equipment fully amortized in that period, so they can buy a new one to keep patients from going to “that other hospital”. That, and the fact that the State is entitled to “most favored rate” in clauses in State insurance contracts, insure that paying cash will always be more expensive than going through the insurance paperwork mill. The system is definitely broken!

Imagine if the Government, seeing as how they are so hot to get into health care, funded the acquisition of MRI machines for hospitals. The logic would run somewhat along the lines— the [insert your favorite agency] will purchase an MRI machine for the hospital, but will assume a 12 year service life. You are eligible for a new machine only after 12 years. Hospitals could of course pony up the $3 million for a new machine if they wanted, but with the cost borne by the Government (read taxpayer), the other hospitals in the program would be able to offer MRI scans for around $50-$100. This would cover the electricity and the skilled operator labor.

One benefit of this would be that they would be used more (further reducing the allocation of recurring costs and making them cheaper still) and serious diseases would be identified earlier reducing heath care costs. This strikes me as a more reasonable Government intrusion into health care than doling out benefits in accordance with the folks that brought you the IRS in all its simplicity.

Some units actually do MRI for a business. These businesses amortize over 10-15 years and sell MRIs for a fraction of the cost hospitals do. True, government subsidies to hospitals might drive these small busines owners out of business, but that should be icing on the Congressional cake.

Maybe if we start chipping away at the stupid stuff in healthcare insurance, we can actually make it better without becoming Sweden or Canada.

 

Making A Market

Just how gullible are the American people? Pretty damn gullible as I see it. Marketing companies have created whole new volumes of techniques to foist their products on people. The sad part is that these marketing techniques actually work.

I first became aware of this market making phenomena some time ago as I considered the television adverstising of feminine hygiene products. Now I will admit as freely as anyone that a woman , unwashed and unshowered for three weeks, is not the most delicate fragrance I’ve ever sniffed, but in fairness the same can be said, and more so, of a number of men. In fact, the time delay for men is about one day from unshowered to positively stinky. However, with the application of a regular course of hygiene (pay attention France), there is nothing overtly more smelly about a woman than a man. I am aware that some women are subject to unwanted excretions (or—as my daughter says—juices), but panty liners deal with that quite effectively. Why any woman needs to purchase a crotch deodorant is beyond me. Most of the deodorants smell much worse than ‘au natural’ and probably are mutagenic and carcinogenic as well. If there is a smell, it’s probably because of an infection and she needs an antibiotic not a perfume. So clearly, the television ads increase the self consciousness of an insecure person, about a mostly non-existent problem, and create a market. About $69 million annually according to Checkout.

So it is clearly possible to invent markets out of whole cloth. What is truly annoying is when drug companies attempt to sell their useless drugs by creating diseases using these selfsame marketing techniques.

Which brings us to Glaxo Smith-Kline. Seems as if they have a drug which was developed for Parkinson’s Disease but didn’t really meet the efficacy standards imposed by the FDA. There was an interesting effect however – the drug suppresses the “tingles’ that occasionally occur in muscles. So how does one recoup the millions of dollars of development expenses for a drug which doesn’t work? Create a new disease or syndrome, one which conveniently can be cured by the very drug under consideration. Voila: Restless Leg Syndrome. Next, lobby and get the FDA to approve the drug for the new syndrome. Create and fund a support group. Eventually, there will even be a natural vegan/organic solution. You’ve made it to the big time. Now you have created a multi-million dollar market for your screw-up.

And the American people (and Europeans also, it appears), actually buy into this. Astounding!

So the next television commerical you encounter – press that MUTE button. Skip over the ads in newspapers, and when someone presents you with an offer to buy something you just have to have, resist. But before all that, for God’s sake, clean out that medicine cabinet!