Will health care reform reduce the relentless rise in costs?

Redress · Jan 2, 2010

Op-Ed: Will health care reform reduce the relentless rise in costs? - Yahoo! News

First and foremost, I fully admit that an op -ed my Christina Romer is not unbiased, but I found it an interesting read that raised some interesting points. The validity of her claims about how great everything will be I think are at best questionable.

The need to slow spending growth is uncontroversial, as families, businesses, and governments at every level are struggling to cope with soaring costs. Each year, a larger share of workers’ total compensation, and of Medicare recipients’ Social Security benefits, is eaten up by insurance premiums. Each year, fewer businesses, and especially small businesses, can afford to offer health insurance to their workers. And each year, a larger share of spending at all levels of government goes to health care, which has led to tax increases, cuts in other programs, and higher deficits.

I think this is the best explanation of the problem, and puts it in the appropriate light. It's not about unfairness, it's about simple economics. This is why liberals think health care reform is important. This is something that any person who has ever been told that while they are not getting any more money in their check next year, their compensation is going up since health insurance costs have risen.

Small businesses and their employees will especially benefit from health care reform. Currently, small businesses pay up to 18 percent more for the same policy as their counterparts at larger firms. Slower cost growth and setting up an insurance exchange where small firms capture some of the buying power of larger firms will result in lower premiums. This in turn would allow small businesses to pay higher wages, hire more workers, and increase investment. It would also increase workers’ incentives to launch their own small businesses.

As democrats look for ways to sell their bill, I think this is an important role model to follow. The litany of "we have to fix health care" needs a clear explanation, and showing the benefits of lowering the rate of cost increases does that well. It is possible to argue that this won't work, but it's hard to argue that the goal as presented in the paragraph above is not worthwhile.

MyOwnDrum · Jan 2, 2010

I'm not well versed in the details of the bill. I do agree with the premise that it will help small businesses compete. Another factor that would help unemployment generally is the fact that a sizable portion of people over 60 will hold on the jobs only for the health insurance. You see, especially, women whose husbands have retired, who keep working fulltime more for the health benefits than anything. It will also give more job flexibility to part time workers, which will especially help moms with kids who often will be forced into fulltime work because their husband often has a career without health benefits.

As far as containing costs, you won't do that without some sort of sensible rationing and serious containment of end of life costs. This will be a bitter pill of reality for many Americans.

Donc · Jan 2, 2010

Sadly, not in what I have heard of the bill on the table now; maybe they can do something to make it a bit more palatable but I’m not optimistic. To me it looks like an insurance companies wet dream.

LaMidRighter · Jan 2, 2010

donc said:
Sadly, not in what I have heard of the bill on the table now; maybe they can do something to make it a bit more palatable but I’m not optimistic. To me it looks like an insurance companies wet dream.

It is and isn't at the same time. While it would force sales up unnaturally, it would also dramatically alter the risk tables, so things are going to get very complicated.

washunut · Jan 2, 2010

LaMidRighter said:
It is and isn't at the same time. While it would force sales up unnaturally, it would also dramatically alter the risk tables, so things are going to get very complicated.

Try to think of this just using common sense. It is not that complicated. We are going to make insurance companies cover certain things that have a ton of cost, They will not just absorb those costs so they will pass them on to consumers ( us).

Noe think of who insures most Americans. That is their employers. Under the new law the insurance they offer will have to cover whatever Pelosi throws in. They may decide that it is just not worth hiring more people in the US and hire in countries that do not add these costs,

As to small companies. That is where many of the uninsured are now. So lowering the rates is a canard. If companies have to buy insurance for their employees, many will make an effort to stay under the 50 employee limit so they are exempt.

My concern is that the best and the brightest of the upcoming generations will choose to work and live elsewhere.

LaMidRighter · Jan 2, 2010

washunut said:
Try to think of this just using common sense. It is not that complicated. We are going to make insurance companies cover certain things that have a ton of cost, They will not just absorb those costs so they will pass them on to consumers ( us).

Noe think of who insures most Americans. That is their employers. Under the new law the insurance they offer will have to cover whatever Pelosi throws in. They may decide that it is just not worth hiring more people in the US and hire in countries that do not add these costs,

As to small companies. That is where many of the uninsured are now. So lowering the rates is a canard. If companies have to buy insurance for their employees, many will make an effort to stay under the 50 employee limit so they are exempt.

My concern is that the best and the brightest of the upcoming generations will choose to work and live elsewhere.

This thing is going to hurt, all that you've been talking about is just the beginning.

Harry Guerrilla · Jan 3, 2010

Redress said:
Op-Ed: Will health care reform reduce the relentless rise in costs? - Yahoo! News

First and foremost, I fully admit that an op -ed my Christina Romer is not unbiased, but I found it an interesting read that raised some interesting points. The validity of her claims about how great everything will be I think are at best questionable.

I think this is the best explanation of the problem, and puts it in the appropriate light. It's not about unfairness, it's about simple economics. This is why liberals think health care reform is important. This is something that any person who has ever been told that while they are not getting any more money in their check next year, their compensation is going up since health insurance costs have risen.

It is simple economics, it's just supply and demand with a third party that acts as a shield to price which drives up demand and cost.

Redress said:
As democrats look for ways to sell their bill, I think this is an important role model to follow. The litany of "we have to fix health care" needs a clear explanation, and showing the benefits of lowering the rate of cost increases does that well. It is possible to argue that this won't work, but it's hard to argue that the goal as presented in the paragraph above is not worthwhile.

From what I've seen there is nothing in the bill that will bring down costs.

They are just adding more people to a third party payer which drives up costs.

Redress · Jan 3, 2010

Harry Guerrilla said:
It is simple economics, it's just supply and demand with a third party that acts as a shield to price which drives up demand and cost.

From what I've seen there is nothing in the bill that will bring down costs.

They are just adding more people to a third party payer which drives up costs.

My problem with the bill also kinda covers my problem with your statements. The bill is incredibly complex, and I don't think we will know, for sure, what effects it will have overall for many years. Every one is rushing to say the bill will save money, or cost money, but no one really knows. It's all guesswork based on what the individual wants to believe. This is why I favor a more systematic, step by step approach. Small changes, observe the effect, then more small changes.

MyOwnDrum · Jan 3, 2010

Redress said:
My problem with the bill also kinda covers my problem with your statements. The bill is incredibly complex, and I don't think we will know, for sure, what effects it will have overall for many years. Every one is rushing to say the bill will save money, or cost money, but no one really knows. It's all guesswork based on what the individual wants to believe. This is why I favor a more systematic, step by step approach. Small changes, observe the effect, then more small changes.

That, or a total single payer National Health Scheme such as UK. I agree, the complexity of the bill and its attempt to please everyone, while placing more unfunded mandates on the healthcare system, yet failing institute torte reform, is a prescription for more chaos and higher expense.

This is already happening to hospitals with the new Medicare regulations recently instituted. They punish hospitals, tying funding to certain outcomes, leaving the hospital paying for the costs to achieve those outcomes, and creating a whole new layer of regulatory burden.

Redress · Jan 3, 2010

MyOwnDrum said:
That, or a total single payer National Health Scheme such as UK. I agree, the complexity of the bill and its attempt to please everyone, while placing more unfunded mandates on the healthcare system, yet failing institute torte reform, is a prescription for more chaos and higher expense.

This is already happening to hospitals with the new Medicare regulations recently instituted. They punish hospitals, tying funding to certain outcomes, leaving the hospital paying for the costs to achieve those outcomes, and creating a whole new layer of regulatory burden.

I don't think you will ever have such a system in the US, not for many many years at least. Whether such a system would work well here, it is impossible to say, though I have real doubts.

MyOwnDrum · Jan 3, 2010

Redress said:
I don't think you will ever have such a system in the US, not for many many years at least. Whether such a system would work well here, it is impossible to say, though I have real doubts.

I agree, we'll never have it. Our culture wouldn't tolerate that much uniformity.

Dezaad · Jan 3, 2010

I don't think that anyone can ignore what the investor consensus is: That this bill will increase insurance company profits and therefore insurance stocks are good to buy.

LaMidRighter · Jan 3, 2010

Dezaad said:
I don't think that anyone can ignore what the investor consensus is: That this bill will increase insurance company profits and therefore insurance stocks are good to buy.

What I bolded, I'm not sure about, the speculation is currently going that way if you watch the market closely, and that does seem to be the accepted market line right now, but I have a really bad feeling that once risk tables shift there could be huge losses, so I don't know whether buying those stocks is good or bad, it will all be settled after the first quarter I'm sure, but buying would either be really good or REALLY bad.

Harry Guerrilla · Jan 3, 2010

Redress said:
My problem with the bill also kinda covers my problem with your statements. The bill is incredibly complex, and I don't think we will know, for sure, what effects it will have overall for many years. Every one is rushing to say the bill will save money, or cost money, but no one really knows. It's all guesswork based on what the individual wants to believe. This is why I favor a more systematic, step by step approach. Small changes, observe the effect, then more small changes.

I respectfully disagree with that portion.

Arthur Laffer has done an analysis of medical spending vs. costs over the period of that last 50 years.
There is, at least, a corollary effect of less out of pocket and more third party = a rise in over all prices.

And when you think about it, the middle man (in this case insurance companies and government programs) act as the third party which adds another layer a person has to go through in order to get medical treatment.

Redress · Jan 3, 2010

Harry Guerrilla said:
I respectfully disagree with that portion.

Arthur Laffer has done an analysis of medical spending vs. costs over the period of that last 50 years.
There is, at least, a corollary effect of less out of pocket and more third party = a rise in over all prices.

And when you think about it, the middle man (in this case insurance companies and government programs) act as the third party which adds another layer a person has to go through in order to get medical treatment.

It's still speculation, just educated speculation. The author of the op-ed I linked is a pretty well respected economist, and has worked on a study which shows a different result. Who is right?

The Prof · Jan 3, 2010

Redress said:
This is why I favor a more systematic, step by step approach. Small changes, observe the effect, then more small changes.

obama would have done well to heed your wise advice

he should have done one reform per year for 8 years

pre-existing conditions coulda won him universal bipartisan support

so could recissions, stopping the practice of big-aetna dropping you once you and they discover you need them

there were many ways obama could have expanded coverage, still keeping 70 or so senators on board

had he taken your approach instead of his, he would go far to making himself one great president

instead, he did it, as always, his way

the most incompetent politician at the national level america has ever produced

he let ms pelosi write HIS stimulus, for example

while we might not know as much about the effects of the bill on costs, we DO know that the legislation is NOT paid for

the half T cuts to m and m banked upon for budget balance will never go down, as both sides concede

the doc fix, another quarter T, is accounted vs the deficit

cbo last week reported reid DOUBLE COUNTS another quarter T

10 years of taxes and 6 years of benefits is a pretty bogus way to reach equity in the first place

he should have done pre existing's and recission's his first year

he'd have been a huge winner in congress, and he'd be very popular

he coulda parleyed that in exciting (for him) directions in 2010

oh well

Donc · Jan 3, 2010

This was going along pretty well until you jumped in with the partisan BS. Now, continuing with the hopefully, none partisan part of the discussion.

My thought is that if we could get some politicos, from both parties, and put them in a room then bar any lobbyist from the room, you might come up with a bill that both parties could live with.

Oh yes, try to find the politicians with the least amount of healthcare money going into their reelection coffers to go into the room. That would more than likely be a pretty big sticking point.

Harry Guerrilla · Jan 3, 2010

Redress said:
It's still speculation, just educated speculation. The author of the op-ed I linked is a pretty well respected economist, and has worked on a study which shows a different result. Who is right?

Of course If I'm completely honest I'll say both Laffer and myself are right, even though he(Laffer) doesn't specifically address this bill.

She is definitely a credentialed economist, however, I've read more of the specific literature she cited and it makes a lot of assumptions based on maybes.
It doesn't address the additional burden of medicaid expenditures on the states.

Shes also follows the Keynesian economic system, so I can't take all she says for truth.

Additional info about Christina Romer: She works for the Presidents Economic Counsel.

[ame=http://en.wikipedia.org/wiki/Christina_Romer]Christina Romer - Wikipedia, the free encyclopedia[/ame]

washunut · Jan 4, 2010

Harry Guerrilla said:
I respectfully disagree with that portion.

Arthur Laffer has done an analysis of medical spending vs. costs over the period of that last 50 years.
There is, at least, a corollary effect of less out of pocket and more third party = a rise in over all prices.

And when you think about it, the middle man (in this case insurance companies and government programs) act as the third party which adds another layer a person has to go through in order to get medical treatment.

I think the issue with any thrid payer plan is that the consumer has no skin in the game when it comes to cost. People keep saying that insurance companies add a layer of cost that could be dome away with.

Think about all of the waste in the government health plans because they do such a poor job of checking to see if a service should have been done.

It seems to me that this administration likes to create a villian that the President and congress can scream about. In health care that is insurance companies. Who has really debated their value or lack thereof.

Also please remember that most large companies are really the insurance provider for their employees. The insurance companies just process the paperwork. So they are like any number of companies doing outsourcing work.

Skateguy · Jan 4, 2010

It's to bad they don't post whatever bill they have, so we could read the darn thing. No two people seem to agree on what is even really in the thing---as long as I don't get fined $950.00 for not being able to afford it, I'm good.

DeeJayH · Jan 4, 2010

Dezaad said:
I don't think that anyone can ignore what the investor consensus is: That this bill will increase insurance company profits and therefore insurance stocks are good to buy.

one of oldest tricks on Wall St.

buy the rumor -- makes it seem true

sell on the news or just before, and the poor saps watching it go up on a rumor buy it up and take the fall when reality sets in

than those who panick sell, and the smart money comes in again and scoop it up cheaper if the reality will benefit the stock price

DeeJayH · Jan 4, 2010

Orlando Sentinel - The TV Guy – ‘60 Minutes’ investigates Medicare fraud, explores epilepsy

enough said about 'savings'

Harry Guerrilla · Jan 4, 2010

washunut said:
I think the issue with any thrid payer plan is that the consumer has no skin in the game when it comes to cost. People keep saying that insurance companies add a layer of cost that could be dome away with.

Think about all of the waste in the government health plans because they do such a poor job of checking to see if a service should have been done.

It seems to me that this administration likes to create a villian that the President and congress can scream about. In health care that is insurance companies. Who has really debated their value or lack thereof.

Also please remember that most large companies are really the insurance provider for their employees. The insurance companies just process the paperwork. So they are like any number of companies doing outsourcing work.

I make my predictions based on historical performance of similar systems.

If we look at Massachusetts, Maine and New York, we see that they enacted similar legislation that drove prices up and did not do much of anything else.

Not to forget that the Federal government has a hell of a hard time sticking to budgets.

Will health care reform reduce the relentless rise in costs?

Redress

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MyOwnDrum

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washunut

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Harry Guerrilla

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Will health care reform reduce the relentless rise in costs?

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