What's in a number?

8000. We took on Obamacare for 8000 people.

See the story here.

Unbelievable. Nothing like politicians creating a problem....

Health Care as a "Right"

This might be the best editorial on Health Care ever written:

From Cafe Hayek and Don Boudreaux

Could not be better said...

Letter to the Editor

Second submission this week to the Wichita Eagle...

Dear Editor,

Much has been made of the recent health care debate. Among those advocating more government involvement in health care are people that claim that a country as great as ours should provide health care for all its citizens.

The point these people are missing is what got America to this point? Was it bigger government and state controlled enterprise that made us great? It most certainly was not. It was the Founders’ ideals of small government and individual freedom and accountability that got us to the pinnacle of history’s standard of living.

German economist Adolph Wagner theorized over 100 years ago that once countries reach a certain level of prosperity the populace will eventually vote themselves ever more benefits accompanied by growth in government. As government grows and more citizens find themselves dependent on those social services, one can only imagine a decline in the overall level of our prosperity as fewer people are actually producing the goods and services that created history’s most prosperous society.

New Editorial for the Eagle

Still trying to decide whether or not to send it to them....

Dear Eagle Editorial Staff,

It appears that health care reform is not going to go away in Washington. There are many considerations to be made on both sides of the issue. However, one thing is known for certain and that is health care consumes a significant portion of US GDP.

Health care is expensive today because most individuals have no incentive to hold costs down. Employers or insurance companies pay most of the costs. Nothing in the current legislation addresses this problem. Bureaucrats want to control escalating costs by capping what insurances premiums are, not what health care actually costs.

Health insurance has become a means to health care payment rather than protection from catastrophic loss. If the US is to tackle these escalating costs, Health Insurance must return to be just that, insurance. High-deductible plans with Health Savings Accounts are fantastic alternative for people to have coverage and still be accountable for cost. These are all available today with no more legislation or interference. They just need to be encouraged and put into practice.

I also know that another certainty is that Congress will get health care wrong. The Washington Times reports recently that Congress expected Medicare to cost $12 billion by 1990 when they made their projections in 1967. Unfortunately they were wrong as Medicare cost $98 billion 23 years later. They missed their projections by 800% and regrettably the US Government has not improved their forecasting in recent years with Medicare and SCHIP following similar miscalculations. Can citizens of this country really afford to have the government to miss projections by this wide margin again? We are now looking at trillion dollar miscalculations.

Under proposed legislation, insurance companies will be forced to insure people that normally would not be insured and cover conditions they would not normally cover. Furthermore, they will be forced to hold premiums down while taking more risk. This is bound to drive many, if not all of them, out of business. After all, healthy people will still not buy insurance and will wait until they are sick to buy coverage. The insurance companies cannot deny them under new rules. How is this different than a driver buying auto insurance after he wrecks his car and expecting full coverage? It is not a sustainable business model.

The competitive market for quality health care is starting to show signs of life. Retail clinics are appearing in malls and shopping centers. These clinics give consumers an affordable alternative to the doctor’s office. Many pharmacies now have $4 generic prescriptions, driving drug costs down. Quality care is also being marketed in foreign countries where surgeries can be done at a fraction of the price one would expect to pay in a US hospital. These are all market-based solutions that need to be encouraged, not sacrificed to special interest groups representing corporations and health care professionals. Cosmetic surgery and laser eye surgery are all very good examples of how market forces can lower the cost and raise the quality of care in this very way.

I do not believe anyone, on either side of the issue, wants to deny anyone access to quality health care. Ironically, the proposals being circulated today may just do that very thing. Let’s let the markets work and hold down costs through competition in health care, not insurance. Let’s also get health insurance back to actually being insurance. Make individuals accountable for costs and let markets work through a market-based system of affordable, high-deductible health insurance and Health Savings Accounts. This alone will determine what the right portion of GDP health care should consume. These small changes can save all of us from rising costs, further government interference and additional misguided projections from Washington.

-Doug

You are locked into Obamacare.

This is a great article from an MD answering the question "Can I get out of Obamacare?"

American Enterprise Institute

Some highlights:

In effect, the plan creates a single national health-insurance policy. Consumers' only real option is to trade higher co-pays for lower premiums. But we'll all get the same package of benefits established by a series of new agencies and an "insurance czar" seated in Washington.

The overriding goal of this reform is to turn health insurance into a more "egalitarian" benefit that's the same for everyone, regardless of income, personal preference or need. So rules written under President Obama to implement the Obama plan are a sure bet to intentionally curtail anyone's ability to wrap around this national coverage with a supplemental policy or to contract privately with doctors to pay your way out of its limitations.

It is easy to see how Obama plans to lower "costs." Everyone will now have to pay for standardized care. This means more care for some, but less for others. To save money, some things will certainly be left off the Czar's approved health insurance coverage itinerary. Seems like a lot of power for any bureaucrat (or bureaucracy) to handle. Plus, how does that bureaucrat know what is good for me and my family (and for that matter, yours)? I wonder if a lower life expectancy is considered a "cost?"

Health Insurance

Great post at Carpe Diem this week.

Cell Phones and Cable or Health Care?

See it here.

Surprises in Retail Health Clinics

New data shows that new retail health clinics are doing exactly what they are designed to do, reduce costs. From USN:

Nationally, surveys indicate that about 80 percent of patients have a regular doctor whom they see for treatment or advice. Not this group. Nearly two thirds of retail clinic patients said they didn't have a primary care physician, according to an analysis of 1.35 million patient visits between 2000 and 2007—and they account for 74 percent of total retail clinic visits. Far from disrupting the doctor-patient relationship, "[F]or these patients there is no relationship to disrupt," said researchers at RAND and the University of Pittsburgh, who authored the study.

Retail clinic patients are more likely to be female, on the young side (between 18 and 44), and uninsured than patients who visit either primary care physicians' offices or emergency departments, the study found. It's interesting that a third of retail clinic patients apparently don't have health insurance, compared with a quarter of ER patients and 10 percent of those who visit a primary care physician. With roughly 45 million uninsured, retail clinics may be attracting people who otherwise would end up clogging emergency rooms with nonemergency problems.

Doctors who've fretted that retail clinics will encroach on their business can take comfort: More than 90 percent of visits were for 10 simple conditions such as sinusitis, upper respiratory tract infections, and sore throats. Those conditions made up just 13 percent of adult visits to primary care physicians, 30 percent of pediatric primary care visits, and 12 percent of emergency department visits, according to the study.

These clinics are a great development in the health care market. It also proves that the free-market is a much better problem solver than government if government will just get out of the way. However, the special interest that enjoys the benefits of higher prices will surely fight these positive moves for the health care consumer.

Krugman Misses the Point on Universal Health Care

NYT Columnist (and supposedly an economist) Paul Krugman totally misses the key points in the argument against Universal Health Care in the US in his opinion piece today. Some examples:

What’s easy about guaranteed health care for all? For one thing, we know that it’s economically feasible: every wealthy country except the United States already has some form of guaranteed health care.

It is not economically feasible. There is a cost of providing unlimited health care, and it is a cost many cannot afford. Health care has to be rationed just like every other scarce resource. We do not have an unlimited number of hospitals, doctors, nurses or even medications. Today those resource are allocated based on price. For many Americans the prices come in the form of insurance premiums and co-pays, but it is a real cost. Now with HSA and FSA, people can make choices about their health care based on cost. This is a positive step in the reduction of health care costs (actually having people bear the cost themselves makes them think about the true cost).

The politics of guaranteed care are also easy, at least in one sense: if the Democrats do manage to establish a system of universal coverage, the nation will love it.

All people will NOT love it. Particularly the people that see their tax bills skyrocket to pay for coverage for people that would rather drive nice cars and have cell phones instead of paying for health care insurance for their families. The people that have to wait in line for hours to get an emergency procedure or the the people that have to wait months to get in the que for surgery that may save their life will not like it. Just ask the Canadians about this "little" problem with Universal Health Care. The other people that will not love it are the people that can make their own health care decisions that will now be made by some lousy government bureaucracy.

I know that’s not what everyone says; some pundits claim that the United States has a uniquely individualistic culture, and that Americans won’t accept any system that makes health care a collective responsibility. Those who say this, however, seem to forget that we already have a program — you may have heard of it — called Medicare. It’s a program that collects money from every worker’s paycheck and uses it to pay the medical bills of everyone 65 and older. And it’s immensely popular.

Medicare is not all that popular. Ask anyone under 65 if they like getting 1.65% of their check taken out in the form of taxes for 45 years. I don't. Older people are over-consuming health care resources today (at subsidized rates) and that is driving up the cost for the rest of us. For many elderly, there is absolutely no cost for them to spend a couple days in the hospital. Again, those beds are a limited resource. Low government reimbursements through Medicare mean the rest of us have to pay more to cover those expenses. We have the few taking care of many just around the corner which is very different from the many taking care of the few that we experience today.

The Massachusetts plan has come in for a lot of criticism. It includes individual mandates — that is, people are required to buy coverage, even if they’d prefer to take their chances. And its costs are running much higher than expected, mainly because it turns out that there were more people without insurance than anyone realized.

Mandates are just a nice way of saying taxes. It also is code for you do not know what is best for you and the government will show you the light. Costs are higher than expected because people over consume things they perceive as being free.

The short lesson on universal health care is that nothing is free and that prices are the best means to guide decisions. I know of no one that does not like the idea of universal health care, myself included, but then again I know of no one that would not like to live in utopia either. If government really worked this way we could have a department of gasoline that gave us all free (albeit subsidized) gas. Do you really think that would be costless to society? Health care is no different.

One more case against Billary care.

Turns out things are not as rosey as President Chavez proclaims in his social utopia. Even with all that oil money, you still cannot deliver a suitable socialized health care system. Nothing eliminates corruption and waste like the threat of loss or the potential for profit. The Soviets learned that lesson the hard way after millions of their people endured a quality of life that was decades behind that of Americans.

Health Care in Venezuela Takes Turn For The Worse

Price Controls Are Bad Medicine

There is a very good article in Forbes Online today.

A Price Control By Any Other Name

What is a price? A price communicates so many market variables that it is impossible to explain all of the information. But let's give it a try. One, how much risk there was for the manufacturer to research and develop the medicine. Two, how much risk is there the manufacturer will be sued by overzealous trial attorneys. Three, how much money does the company have to give up to sell products in Canada and other countries. Four, how can the company recover all the development costs for medicines that do not work.

If the US Government puts price controls on medications, expect that to be the end of R&D and new drugs to fight disease. While we might be able to get existing drugs cheaper, we won't get many, if any, new ones. There is not enough incentive for companies to take the risk. As it is, US consumers are funding most of the R&D since companies are forced to sell below market prices to most other countries.

While lower priced drugs sound like a good idea, there will be consequences.

If you believe the government can provide health care, you need brain surgery.

For all the people that think their government can provide decent health care for it citizens, here is more evidence to the contrary.

When the government has a monopoly on health care, the only method of rationing care is time.  In many cases that is exactly what people do not have.  Prices and the free markets are the best allocation mechanisms and the only ones that will work when you need the care that might save your life.

After all, do you really want someone like Elliot Spitzer in charge of your health care?

Liberty or Socialism?

Recently there was a bill in front of the Legislature in Mississippi that would outlaw serving obese people in restaurants. The bill, according to its originator, was to bring attention to the fact that obese people were becoming a big burden on government because it was driving up health care costs.

Now this seems very interesting to me for several reasons. How is a restaurant owner suppose to determine what is obese? Does everyone get weighed and a BMI calculated before ordering? If they tell someone they are obese, do you think that person would ever frequent that restaurant again? If the owner does serve someone that is obese, could they be arrested or fined?

The second issue I see around this legislation is the one where government is now legislating behaviors. There are huge costs to the government since they are picking up nearly half of all health care expenditures today. Naturally they would want to do something to hold down those costs. After all, we have a responsible bunch of politicians watching every penny we send to them.

The real concern here is actually not the cost (although it is huge) but rather the loss of liberty Americans could face if we truly pursue a "nationalized" health care program. Since the government is paying for your health care, they feel they should be free to tell us what we can and cannot do. Drinking alcohol (liver disease), smoking (lung and heart disease), watching TV (heart disease), eating salty snacks (hypertension), sweet desserts(diabetes) and who knows what would be next. All of this done in the name of your good health (and lower costs).

How is this policy different than today? Well, insurance companies price the risk associated with the proposed "banned" behaviors and other factors that would effect their costs and then price the policy accordingly for each indidual or company. The government on the other hand, will have a one size fits all approach that will actually fit no one.

Fortunately the Mississippi Legislature failed to pass this bill. However, the fact that it was even considered let's you know where the politicians minds are. This alone should scare us all.

A Bureaucracy to Eliminate Bureaucracy

I heard the craziest thing I have ever heard on my way home last night on the Sean Hannity talk radio program. Sean was interviewing Tom Daschles (former Democratic Senator from South Dakota). In his interview, Daschle was talking about how he would reform health care. His plan to save health care is to get government involved since over 30% of all health care costs are not health care related. To put it in context, Daschle was referring to the costs associated with insurance companies and Medicare dealing with paper work. He then quoted that in most countries (none mentioned) this cost was typically less than 15% (source not quoted).

So Daschle proposes there be a Federal Reserve-like board that oversees health care. This board would be independent, like the Fed, and be immune to influence from politics. Now what he did not propose was how the new bureaucracy would actually eliminate 15% of health care costs related to paper work. Just that an independent bureaucracy like the Fed could use its power to force lower costs.

There are a couple of problems with this. One, the Fed is not perfect. The most recent example is the Housing Crisis we are in right now. The Fed's cheap money policy created this run up in prices that was unsustainable with current wages. Now we are paying the price. Would a healthcare Fed be any different?

Another problem is the 30% that insurance companies spend on paper work is what keeps costs down. The profit motive is what gives insurance companies the incentive to reduce waste in their system. This means carefully monitoring what doctors and hospitals are charging. This oversight will not go away with more bureaucracy. It most likely will raise health care costs as their will be more, not less, regulation. Regulation means more costs for businesses and most likely, more paper work. Banks are not paper work-free institutions.

If insurance companies cannot provide a product that people can afford, or that people find valuable, they will move on to another provider or product. The market will provide the solution, not another government bureaucracy.

Here is an example of Health Care Innovation in Wichita, Kansas.

Health Care Innovation at Work

Free Healthcare Really Does Have Costs

I got this email this morning from an anonymous person that supposedly lives in Canada. I would much rather allocate health care on price and the free market rather than government rationing the number of operations. If we adopt the Canadian system, where will the Canadians go for good health care? The below is very interesting...

Free Health Care in Canada......... I saw on the news up here in Canada where Hillary Clinton introduced her new health care plan. Something similar to what we have in Canada . I also heard that Michael Moore was raving about the health care up here in Canada in his latest movie. As your friend and someone who lives with the Canada health care plan I thought I would give you some facts about this great medical plan that we have in Canada . First of all:
1) The health care plan in Canada is not free. We pay a premium every month of $96 for Shirley and I to be covered. Sounds great eh What they don't tell you is how much we pay in taxes to keep the health care system afloat. I am personally in the 55% tax bracket. Yes 55% of my earnings go to taxes. A large portion of that and I am not sure of the exact amount goes directly to health care our #1 expense.
2) I would not classify what we have as health care plan, it is more like a health diagnosis system. You can get into to see a doctor quick enough so he can tell you "yes indeed you are sick or you need an operation" but now the challenge becomes getting treated or operated on. We have waiting lists out the ying yang some as much as 2 years down the road.
3) Rather than fix what is wrong with you the usual tactic in Canada is to prescribe drugs. Have a pain here is a drug to take- not what is causing the pain and why. No time for checking you out because it is more important to move as many patients thru as possible each hour for Government re-imbursement
4) Many Canadians do not have a family Doctor.
5) Don't require emergency treatment as you may wait for hours in the emergency room waiting for treatment
6) Shirley's dad cut his hand on a power saw a few weeks back and it required that his hand be put in a splint - to our surprise we had to pay $125. for a splint because it is not covered under health care plus we have to pay $60. for each visit for him to check it out each week.
7) Shirley's cousin was diagnosed with a heart blockage. Put on a waiting list Died before he could get treatment.
8) Government allots so many operations per year. When that is done no more operations, unless you go to your local newspaper and plead your case and embarrass the government then money suddenly appears.
9)The Government takes great pride in telling us how much more they are increasing the funding for health care but waiting lists never get shorter. Government just keeps throwing money at the problem but it never goes away. But they are good at finding new ways to tax us, but they don't call it a tax anymore it is now a user fee.
10) A friend needs an operation for a blockage in her leg but because she is a smoker they will not do it. Despite paying into the health care system all these years. My friend is 65 years old. Now there is talk that maybe we should not treat fat and obese people either because they are a drain on the health care system. Let me see now, what we want in Canada is a health care system for healthy people only. That should reduce our health care costs.
11) Forget getting a second opinion, what you see is what you get.
12) I can spend what money I have left after taxes on booze, cigarettes, junk food and anything else that could kill me but I am not allowed by law to spend my money on getting an operation I need because that would be jumping the queue. I must wait my turn except if I am a hockey player or athlete then I can get looked at right away. Go figger. Where else in the world can you spend money to kill yourself but not allowed to spend money to get healthy.
13) Oh did I mention that immigrants are covered automatically at tax payer expense having never contributed a dollar to the system and pay no premiums.
14) Oh yeh we now give free needles to drug users to try and keep them healthy. Wouldn't want a sickly druggie breaking into your house and stealing your things. But people with diabetes who pay into the health care system have to pay for their needles because it is not covered by the health care system.

I send this out not looking for sympathy but as the election looms in the states you will be hearing more and more about universal health care down there and the advocates will be pointing to Canada . I just want to make sure that you hear the truth about health care up here and have some food for thought and informed questions to ask when broached with this subject. Step wisely and don't make the same mistakes we have.