Health Insurance 44

[tbonebanjo]

I was just wondering how many companies still have good insurance and how many have gone the way of Obamacare. I am in a small MEP firm in Maryland. Our health insurance just changed, our premiums went up and our coverage went way down. I have maximum out of pocket expenses of $12,500 per year, $4000 deductable per person, tnen start the copay schedules. Should I start looking for other employment or are all companies being affected this way?

 

[glass99]

Kenat - Technology can be used to either make Volkswagens or Porsches. You are right that thus far the medical tech focus has been on quality not cost. Obvious Volkswagen tech projects include electronic medical records, automated blood tests, and laproscopic surgery. A Porsche project would be a cure for ALS (though the ice bucket challenge guys seem to have that under control).

 

[KENAT]

Sure, but for every dime they save on E records they spend an exra few dollars for a new Hepatitis C pill.

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[glass99]

Kenat: You are correct that they are continually expanding their scope of new diseases. That does not change the fact that we could switch focus to efficiency - What if some of the fancy kit that doctors use could be made for cheaper, like CT scan machines? What if some clever boffin comes up with a cheap and user friendly attachment that plugs into an iPhone rather than the quarter million dollar CT dinosaur that has high secondary costs related to storage, handling, staff training and real estate? What if we could do scans without a $300,000/yr radiologist to review them because a computer could do the same job?

In my view there is a huge business opportunity for low cost health care technology. The medical industry is filled with routine commodity procedures with huge volume which are really expensive on a unit basis. Its classic industrial revolution stuff. Blacksmiths have been hand hammering the horseshoes, and someone is going to invent steam anvil which does it for 10% of the cost. Testing perhaps the most obvious area.

 

[swall]

A basic question for all of you single payer advocates--why to you think that single payer would bring down costs?

 

[beej67]

If you drill down to the numbers, the efficiency of the payment method is only about a 10% swing on health care costs.

The problem is the song and dance, and on the sheer amount of stuff that we cover that other countries don't. It's not the profit that's the problem, it's the revenue. No other country in the world buys battery powered fat chairs for their Medicare recipients to drive around in Wal Mart. We do. That's a shared cost that other countries aren't sharing.

The problem is not how we share the cost. The problem is that we share the cost, without controlling how much cost we share.

In order for single payer to work here, we would need some kind of function that prevents unnecessary costs from being shared. In the USA, we have the opposite. We have a system where unnecessary costs can lobby their way onto the coverage list. In the USA, Medicare spent $172 million dollars in the last five years on penis pumps.

Let that sink in, before saying one more word about single payer systems here.

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[glass99]

swall: One big factor makes public health (including US Medicare) cheaper than private: they reimburse at lower rates for doctors, procedures, tests, drugs, and devices. When Canada went public there was this exodus of Canadian doctors across the border to the US who were so appalled at the prospect of only being paid double what an engineer made that they were willing to abandon their homeland.

 

[IRstuff]

" That does not change the fact that we could switch focus to efficiency - What if some of the fancy kit that doctors use could be made for cheaper, like CT scan machines? What if some clever boffin comes up with a cheap and user friendly attachment that plugs into an iPhone rather than the quarter million dollar CT dinosaur that has high secondary costs related to storage, handling, staff training and real estate? What if we could do scans without a $300,000/yr radiologist to review them because a computer could do the same job?"

That technology already exists; it's called a DOCTOR. The majority of added cost is not because of the equipment, per se, it's because of fear of malpractice suits, and the need to fill the time on the machine. Buying a $10M machine also entails making a return on it. But, most doctors are not in the mode of only using their own judgement in a diagnosis; they want the evidence from the CT or MRI, and they want the opinion of the radiologist to back them up. Changing the way malpractice is handled will go a long ways toward reducing unnecessary testing and imaging.

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[KENAT]

Swall, seriously? I'd have thought the apparent* fact that a bunch of other first world nations who have single payer systems get much better value for money would be some indicator.

Depending how it's set up single payer could also improve the mal practice situation and assorted costs attributed to that - not just insurance & legal fees but also the defensive medicine etc..

Depending how it's set if it might eliminate some of the billing mess, but of course many would expect that would get replaced by some government bureaucracy.

Bunch of other reasons too but if you haven't picked up on most of them yet I doubt I'll convince you.

Again depending how it's set up it would probably remove a bunch of the 'for profit'.

(* apparent because I admit I haven't researched it personally in great depth)

beej67 - careful you're getting into death panel territory with your penis pump line of thinking.

glass unless the big pharma etc. companies can be convinced that they can make more money with cheap solutions than what they currently supply there's not much incentive to find cheaper ways to do stuff. Getting drugs etc. through the FDA is probably enough of a hurdle to stop many smaller innovative efforts - especially if big companies decide to lobby against them.

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[glass99]

IRStuff: There is this old fashioned notion that doctors can tell what's wrong with a patient with a stethoscope and a few kind words, and that all the fancy kit is extraneous. As engineers we understand that simple solutions are usually the best, but we also understand that automation is always more efficient than hand methods. Yes steam shovels were expensive to develop, but we could not have dug the Panama canal with shovels.

Medicine is presently different to engineering in that the diagnostic procedures are not accurate enough, and the grey gets filled in with a "human touch", which frankly is ineffective and cover for ignorance. Low cost point of use tests which are accurate are much better than any professional's eyeball. If the emotional response from a human touch is what's necessary, alternate medicine like naturopathy is much cheaper.

 

[glass99]

Kenat: Elizabeth Holmes is a multi-billionaire at aged 30 because of her low cost blood testing. Its a different business model because she is venture capital rich not cash flow rich, but she's still a billionaire. She is going to have a $10 blood testing machine in every Walgreens in the country. I don't really see the old guard being able to adapt to this. Healthcare will have a few "Kodak" moments (i.e. shriveling of old businesses) in the years to come.

 

[IRstuff]

"There is this old fashioned notion that doctors can tell what's wrong with a patient with a stethoscope and a few kind words, and that all the fancy kit is extraneous."

Medicine is not engineering. An MRI does not provide a diagnosis, nor does an ultrasound. All of these require "interpretation" by a TRAINED radiologist. As an example, I dislocated my elbow, and the ortho deemed that the x-ray was insufficient to tell what was going on, but his experience was that I probably tore at least a couple of muscles, and the only thing the MRI provided was a sheet of paper signed by the radiologist that specifically identified the muscles torn. No new information was provided that would have changed the diagnosis nor outcome given by the ortho.

What has increased the number of tests is the fact that there are tons more NPs doing diagnosis who were never trained as doctors, so they have to run tests to back up their diagnoses. The doctors do the same so that there's a paper trail of due diligence in case of suits. If there were no fear of suits, testing would drop substantially, as would secondary consults.

Obviously, there are those that need specialized tests because they've got oddball diseases, but most people don't have those diseases. The majority of sick people have common diseases, and the doctor will usually be correct by playing by the statistics.

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[IRstuff]

And, when I was an engineering technician, we did the same sort of thing. I was tasked with fixing Pong boards, and I had a diagnosis list that would have lines like:

If no paddles are present, solder a capacitor between pins 5 and 7 of U12, or somesuch.

A truly fun few weeks, since I basically had to play the game to identify the fault, fix the fault, and play the game again to verify the fix and determine if there were any more problems. Of course, I never played Pong ever again...

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[beej67]

I'd have thought the apparent* fact that a bunch of other first world nations who have single payer systems get much better value for money would be some indicator.

There are a bunch of first world countries with private systems that get more value for their money as well.

Everybody in the world, no matter how they do it, gets more for their value than we do.

Single payer is government cost sharing. Insurance is private cost sharing. Which way we share the costs does not make the costs go up or down. Over-use of the system is what makes the costs go up. The problem is the cost, not the way in which the cost is shared. The problem is the cost. It's not the profits, it's the revenues.

beej67 - careful you're getting into death panel territory with your penis pump line of thinking.

Private insurance already has "death panels" now.

http://en.wikipedia.org/wiki/Quality-adjusted_life_year

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[glass99]

beej: which country has private insurance and low costs?

 

[JohnRBaker]

I think you will find that in those countries which depend on private insurance and yet has still maintained lower costs and good outcomes, are also countries which highly regulate their insurance industry and which also dictates that basic healhcare coverage has to be provided by not-for-profit organizations. This would include, I suspect, places like Switzerland.

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[glass99]

IRStuff: If doctor's time was cheaper, the notion that we should have them figure out your ailment the old way make senses. At a salary of $300k/yr plus a bunch of overhead, those are some expensive hands feeling out your elbow injury. I think doctor's pay is scandalous. They are walking medical dictionaries, not geniuses. A lot of the liability avoidance behavior can be blamed on the lawyers, but its also that doc's are kind of prima donna's.

We are talking about replacing McDonalds checkout workers with touch screen displays because they want a pay raise from $11/hr to $15/hr, yet our $400/hr doc's are too precious.
-> I say let them have their investment banker salaries and restrictive business practices, but find ways of automation.

 

[IRstuff]

$400k - I wish; then I could retire and let my wife do the heavy lifting. The so-called "average" or even median salary is skewed by the specialist salaries.

MediCal reimbursements are only on the order of $12 per patient visit. So even if a doctor could see 6 patients an hour, that would only get $72/hr, or less than $150k per year, out of which is paid salaries of the office staff, office expenses, including rental and supplies, and malpractice insurance. Medicare pays better, but not that much better. A typical single-provider family practice office must bill ~$400k/yr to net about $200k for gross salary for the doctor. Note that not all bills are ever collectible, and billings are often rejected or decremented by the insurance companies.

The one good argument to reverting to a reimbursement-style insurance plan would be so that the patient could see how much they're paying for the specialist referrals.

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[beej67]

beej: which country has private insurance and low costs?

All of them.

We are an outlyer not because of how we spend, but because of our lack of cost controls. Our system intentionally encourages and often mandates extreme over-use of the system. It is systemic, and changing who pays for it will not change the system itself.

We basically already have "single payer." It's just multiple single payer pools. The problem is not who shares the cost. The problem is the cost. All "single payer" really is, is everyone on the same insurance plan. We could achieve that just as easily by making everyone buy Blue Cross Blue Shield as we could taxing everyone more to pay for giving everyone Medicare. Doing either wouldn't significantly affect cost, because the profits aren't a significant amount of the cost. The margins on insurance are quite low.

The problem is if I sprain my knee in Denmark, I go to the doctor, he sends me home with some pills and an ACE bandage. I sprain my knee in the USA, I go to the doctor, he sends me to a specialist, who sends me to an MRI, which must be read by a specially trained/paid MRI Reading Person, who tells the specialist, who tells the generalist, that I should go home with some pills and a highly specialized proprietary knee brace that does the same thing as an ACE bandage.

Changing who pays doesn't fix that.

I'll type it again, slower this time.

Changing who pays doesn't fix that.


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[hokie66]

beej67 has the only plausible answer. All the other factors are just nibbling around the edges. If you want less cost, you have to reduce the service. The cluster at the top of the chart includes Australia, and we think we pay too much.

 

[IRstuff]

"I go to the doctor, he sends me home with some pills and an ACE bandage. I sprain my knee in the USA, I go to the doctor, he sends me to a specialist, who sends me to an MRI, which must be read by a specially trained/paid MRI Reading Person, who tells the specialist, who tells the generalist, that I should go home with some pills and a highly specialized proprietary knee brace that does the same thing as an ACE bandage."

Most HMO plans already clamp down on that, because they ca deny referrals, but the "Cadillac" plans actually have gone the other way, with "self-referrals."

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