The Impact of ACA on Business Costs

Hypatian wrote:

That imagined market system would also still have major problems.

If insurance wasn't mandatory, but emergency medical care was still provided to the uninsured who cannot pay, you'd have free riders. If insurance wasn't mandatory, but emergency medical care was not provided to the uninsured who cannot pay, you'd have an ethical problem. If you try to divide between those who could be insured or pay but choose not to and those who cannot, you'd add bureaucracy, the chance of being wrong, moral hazard, etc.

And even if you can divide between those two groups, the poor would still be in a situation of receiving only emergency medical care and never having routine health checkups to avoid emergencies, which causes some serious problems. (Which is something that the PPACA is expressly designed to fix—that's why insurance won't be able to charge any sort of fee or copay for tests or checkups any more.)

I don't think it's possible to get from where we are to a good free market system. But if you wanted it to work, this is the approach I would take (which still involves massive governmental regulation):

1) Remove the employer-provided insurance mandate from Obamacare
2) Remove the tax loopholes which encourage employer-provided insurance
3) Add tax loopholes for individually purchased insurance
4) Remove medicare, medicaid (medicare is where the "you must provide emergency coverage" stuff comes from)
5) Legislate that price structures for care are advertised up front - including the pre and post insurance prices
6) Tort reform, yo

You'd need to keep some aspects of Obamacare: the individual coverage mandate, trivially portable electronic health records, government-managed insurance exchanges, subsidies for the poor to purchase from those exchanges (indeed, you would need to expand those subsidies to cover the people who will be kicked off of medicare and medicaid), and the inability to discriminate based on pre-existing conditions.

Hypatian wrote:

That imagined market system would also still have major problems.

If insurance wasn't mandatory, but emergency medical care was still provided to the uninsured who cannot pay, you'd have free riders. If insurance wasn't mandatory, but emergency medical care was not provided to the uninsured who cannot pay, you'd have an ethical problem. If you try to divide between those who could be insured or pay but choose not to and those who cannot, you'd add bureaucracy, the chance of being wrong, moral hazard, etc.

And even if you can divide between those two groups, the poor would still be in a situation of receiving only emergency medical care and never having routine health checkups to avoid emergencies, which causes some serious problems. (Which is something that the PPACA is expressly designed to fix—that's why insurance won't be able to charge any sort of fee or copay for tests or checkups any more.)

With such a big topic, with many posters, I am not sure what you mean by "That imagined Market system"

When I look at single payer systems in the rest of the world I don't see the kinds of major problems you are talking about simply because insurance is mandatory so I assume that isn't what you meant but I am not sure what you did mean.

Could you explain?

I don't want to speak for gore but it seems like his statement "subsidies for the poor to purchase from those exchanges (indeed, you would need to expand those subsidies to cover the people who will be kicked off of medicare and medicaid)" addresses that.

Somehow you need to have healthcare for those unable to buy from the exchanges.

I meant what gore was suggesting two posts above mine.

And with regard to gore's new posts (two posts above this one):

Uh. What about people who are too poor to afford medical care at all? They're just out in the cold, now? (Since there's no more medicare/medicaid or mandated coverage of any sort in what you've described.)

edit: Ahh, I missed that since it was in the list that seemed like "other unimportant details that will get worked out" as opposed to "numbered items that absolutely must be taken care of". Bad interpretation on my part.

KingGorilla wrote:

To Piggy on Farscry. Texas and Florida and Michigan instituted some of the strictest civil reforms for medical malpractice, and it has had no effect on costs for care or doctor's costs on malpractice insurance.

No real surprise we were lied to on that one in Texas. Our new(ish) toll road around Austin was built a few years ago, and they promised lots of new toll booth operator jobs. Today on the way in to work, I noticed a new billboard saying the cash lanes are going away January 1st. Not that I've ever seen anyone in the toll booths in the first place.

f*ck Papa John's. I'm getting my pizza from David from now on.

Farscry wrote:
Demyx wrote:

So what are the logical arguments against single payer? Apart from "omg socialism".

No, that's pretty much it. Unless there's rampant destitution and businesses aren't viable across the rest of the modernized nations of the world. Let's check.

National prosperity rankings for 2012 (legatum index, which of course is questionable since it's one of many measures, but is the first I found), US is rated 12th behind a bunch of socialist nations. Economic competitiveness, we are fifth (three are Euro-socialist nations that are ahead of us on prosperity too). Standards of living, US ranked 4th on the human development index (technically, tied for third). 1st place was that damnable Norway, who's bested us in every category so far.

Well, dammit, at least our health care system is, as Boehner said, the best in the world!

Oh, wait, that's not right either. According to the Commonwealth Fund, in the most recent comprehensive examination of the health care systems in seven modernized nations, the US ranked last. Beaten by -- surprise! -- socialist nations.

So yeah. The only substantial argument is "OMG SOCIALISM!" which, quite frankly, should be an argument in favor of it from what I'm seeing, not against it. :P

My wife and many of our friends work in hospitals at varying positions and levels of authority, and while here in Liberaltopia people are more open to the idea, back in the Midwest the very mention of a single-payer system was verboten. While the healthcare bill was still in negotiation I had several discussions about single-payer with my wife's friends and coworkers and the most common argument against it was along the lines of "America has the best healthcare in the world and involving the government would ruin our quality of care and make us no better than Canada or England."

Pointing out the actual facts of the situation basically just resulted in a reiteration of how horrible Canada and England were. I eventually just gave up trying to argue the point.

ruhk wrote:

My wife and many of our friends work in hospitals at varying positions and levels of authority, and while here in Liberaltopia people are more open to the idea, back in the Midwest the very mention of a single-payer system was verboten. While the healthcare bill was still in negotiation I had several discussions about single-payer with my wife's friends and coworkers and the most common argument against it was along the lines of "America has the best healthcare in the world and involving the government would ruin our quality of care and make us no better than Canada or England."

Pointing out the actual facts of the situation basically just resulted in a reiteration of how horrible Canada and England were. I eventually just gave up trying to argue the point. :P

I'm going off of memory but I think I'm close. The U.S. is ranked 32nd in the world in life expectancy and 37th in infant mortality. Hardly "best healthcare in the world" by any standards. If you look at the number of REPORTED medication errors alone our healthcare system is a train wreck. I remember hearing that if you applied medication errors percentages to other industries it would be the equivalent of a major airline crash once a week.

We are so far away from the "best healthcare in the world" that it's a laughable assertion. If you want the best healthcare in the world you might want to head to Dubai or Qatar.

What's really unfortunate is that some of the best consumer oriented parts of the ACA are never discussed. Meaningful use & value based purchasing are HUGE boosts to healthcare consumers because it will sh*t the payment structure from a volume based system to a quality based system. Isn't that what we should be striving for?

ruhk wrote:

While the healthcare bill was still in negotiation I had several discussions about single-payer with my wife's friends and coworkers and the most common argument against it was along the lines of "America has the best healthcare in the world and involving the government would ruin our quality of care and make us no better than Canada or England."

Pointing out the actual facts of the situation basically just resulted in a reiteration of how horrible Canada and England were. I eventually just gave up trying to argue the point. :P

Yup, that's basically how it inevitably goes with most of the people I've personally debated the issue with who are opposed ot it. Once I start trotting out the facts, out comes the "well I don't trust the government to dictate my health care" line, because that's the only fallback they have.

Farscry wrote:
ruhk wrote:

While the healthcare bill was still in negotiation I had several discussions about single-payer with my wife's friends and coworkers and the most common argument against it was along the lines of "America has the best healthcare in the world and involving the government would ruin our quality of care and make us no better than Canada or England."

Pointing out the actual facts of the situation basically just resulted in a reiteration of how horrible Canada and England were. I eventually just gave up trying to argue the point. :P

Yup, that's basically how it inevitably goes with most of the people I've personally debated the issue with who are opposed ot it. Once I start trolling out the facts, out comes the "well I don't trust the government to dictate my health care" line, because that's the only fallback they have.

Fixed that for you, commie.

I don't understand people who don't trust the government, but think corporations are always super-efficient / not corrupt / looking out for their best interests.

A healthy distrust of both goes a long way.

Demyx wrote:

I don't understand people who don't trust the government, but think corporations are always super-efficient / not corrupt / looking out for their best interests.

I have never met a person who would agree with the part I have bolded here. I assume people who advocate minimal government intervention are aware that corporations are capable of being bad and doing bad things, but such people must assume that a free market will ultimately penalize such behavior and superior alternatives will come to exist.

Of course, anybody who thinks that such forces are improving efficiencies in how our health care system currently operates is simply wrong. Something had to be done, and the Obama/Romney/Clinton/Nixon solution is actually about the least intrusive and least government intensive evolution of the existing system that was possible. Obamacare itself is actually a roadblock in the way of single payer (except for my conspiracy theory that it is designed to make corporations want to get out of the health care business and push for single payer eventually), and anybody who claims to hate single payer should have been very much in favor of it since it was basically the only other way forward.

There are many obstacles that prevent free market forces from working properly in health care. For starters, it is very difficult for "customers" to make any kind of informed health care choices due to the absurd tax breaks given for employer provided coverage and the intentionally obfuscated cost structures behind care itself. Not only that, but the customers who need the most expensive, most time critical medical care (emergency response) are often not in any kind of position to make any choice at all.

Also, for some reason, most Americans do not want to let poor people simply die in the street. By failing to allow hospitals to refuse coverage, they have already guaranteed that the government is going to play a massive role in how health care is provided. Perhaps the people who are opposed to single payer do not realize the irony of this.

As I mentioned earlier, I do not think it is likely for the "free market" to solve our health care problems at this point. Our population has made some baseline assumptions about the government's role in medical care that are directly incompatible with the free market forces which would be required to actually improve efficiencies.

Gore, you're right, I don't think anyone really thinks that way, but it does often come off that way when people are talking about how they don't trust the government with health care responsibilities, but somehow think "free market" forces will take care of it. Which is problematic for all the reasons you described.

Demyx wrote:

I don't understand people who don't trust the government, but think corporations are always super-efficient / not corrupt / looking out for their best interests.

A healthy distrust of both goes a long way.

I couldn't agree more. Having family members both way conservative and way liberal it's often hard to sit and listen to both spouting out nonsense. I think a smaller government is always a better thing, but I'm not so blind as to think large corporations running everything is a better option.

Well gore, there is plenty of blame around that. Doctors and insurers have shown a desire to keep the free market away from medical care as well. Our Doctors get paid far more than their international counterparts. There is also an argument that medical care like utilities, police, defense are not systems suited for a perfectly free market. It is not a market that can suit a lot of competition in many regards. The free market in general tends to fail in serving poor, small, rural markets as well-when you see how the FCC had to step in to get phone lines into farm towns for example.

The American system has a fundamental misunderstanding of free markets as well. The US, in general has not had free markets since the 18th century. The 19th century was a tale of cartels, back room dealing, padding pockets, etc. And since this era and the Sherman Act, followed by the Federal Trade Act we have rubber banded between strong oversight under Teddy Roosevelt, FDR, Eisenhower, and a more hand's off approach that we got under Reagan, Clinton, GW Bush.

Government oversight at its best creates a fair playing field by which the market can strive. It drives down barriers to entry in given markets, meaning competition is increased, prices go down, consumers buy more and make more. At its worst you have the government controls we had on oil leading to the shortages of the 70's.

What we have really lost in the past 30 years has been consistency among the agencies. Reagan played a terrible game of chicken with regulatory funding. With no coin in the purse the EPA, FTC, SEC, Justice Dept, etc. could not do their job.

When a regime change spells huge swings in regulatory policy as we have seen, business suffers greatly. In the same way our bi-polar tax policies have frozen business.

gore wrote:
Demyx wrote:

I don't understand people who don't trust the government, but think corporations are always super-efficient / not corrupt / looking out for their best interests.

I have never met a person who would agree with the part I have bolded here. I assume people who advocate minimal government intervention are aware that corporations are capable of being bad and doing bad things, but such people must assume that a free market will ultimately penalize such behavior and superior alternatives will come to exist.

What I've found, startlingly, is that the perception for a lot of folks I know is that the government can get away with wrongdoing, but corporations will get caught. They believe that politicians will just bend and change the law to let them do what they want. But a business has to play by the rules, and is thus less damaging. Frankly, I think the idea that big businesses and government are wholly separate entities is at least outdated, if it was even accurate ever.

Demyx wrote:

I don't understand people who don't trust the government, but think corporations are always super-efficient / not corrupt / looking out for their best interests.

A healthy distrust of both goes a long way.

It's a combination of propaganda and ignorance. The propaganda bit was courtesy of conservative media with their talk of "death panels" and government bureaucrats ignoring the doctor's skills and experience and condemning your grandmother to death because the treatment was too expensive.

The ignorance bit was that people didn't realize that was exactly what happened with the free market driven health insurance industry: some mid-level analyst in a cubicle somewhere would ignore the doctor's skills and experience and condemn your grandmother to death because the treatment was too expensive (and that by denying treatment controlling costs, his bonus would increase).

Bloo Driver wrote:

What I've found, startlingly, is that the perception for a lot of folks I know is that the government can get away with wrongdoing, but corporations will get caught. They believe that politicians will just bend and change the law to let them do what they want. But a business has to play by the rules, and is thus less damaging. Frankly, I think the idea that big businesses and government are wholly separate entities is at least outdated, if it was even accurate ever.

Yeah, right there with ya, especially that first sentence. As Demyx said, we should have a healthy distrust of both - key words being healthy and both.

Besides "OMG, SOCIALISM!" the argument against single-payer is that rich people deserve better access to better healthcare because they can afford it. It's their right to spend their hard-earned money on the best healthcare if they want. And, if poor people can't afford good healthcare, it's their fault for being poor and not making something better of themselves. This is the "personal responsibility" side of the argument taken to some crazy conclusion, and it's what most of what I hear from the conservative chatter boils down to. They're basically saying that the #1 knee replacement surgeon in the world should be able to charge the most that he can and only the richest people will get access to him. Can't afford it, you get the bottom guy, or no surgery at all.

Does anyone have examples of how the single-payer countries handle the cost/benefit analysis of expensive treatment, particularly end-of-life treatment? Malor has pointed out frequently that most people, most of the time will want all the healthcare they can get at any cost. What is the actual "death panel" process in these countries? The minute that some old billionaire in the US gets denied access to the top medical professional performing the top treatment in the country, the sh*t will hit the fan here.

This doesn't exactly answer your question, but as I understand it, single payer in other countries does not prevent the very rich from purchasing extra/better care than you would get through single payer.

Mixolyde wrote:

Does anyone have examples of how the single-payer countries handle the cost/benefit analysis of expensive treatment, particularly end-of-life treatment? Malor has pointed out frequently that most people, most of the time will want all the healthcare they can get at any cost. What is the actual "death panel" process in these countries? The minute that some old billionaire in the US gets denied access to the top medical professional performing the top treatment in the country, the sh*t will hit the fan here.

I don't remember the specifics but I believe this is covered in "The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care"

It is well worth a read and our local library has it.

Well Mix, that seems to be a smaller issue than people would have us think.
http://articles.philly.com/2012-08-0...

Those older 65 are more likely to opt out of the more expensive, aggressive cancer treatments. And that is under our present system.

We have the aggressive campaigns regarding someone's right to die as well.

Finally, many of the rich come to the US where they can buy themselves to the head of the line.

A rational single payer model would put a focus on screening and preventative measures, not treatment. This would mean genetic screening for people to assess their genetic risks-which are too slowly trickling in to American medicine. If you lack the genetics, many cancers and diseases are incredibly unlikely to plague you. We would get people easy access to vaccines and inoculations for many diseases. People would have access to dieticians. Without getting into woo here; many of America's health costs can be traced to obesity and poor diet. The system would work with the CDC, WHO, AMA and focus on global best practices. America lags behind in some key areas like prenatal, postnatal, and birth care that inflates costs and our infant mortality rate.

gore wrote:

There are, however, some ways in which single payer might be inferior to a good market driven system. If individuals 1) selected any health insurance plan they wanted from a market place (and had good data about the options), 2) had to pay for all their health care themselves, rather than having costs buried in an employer-provided policy, and 3) could find good information about the relative quality and pricing of health care providers, market forces might actually work and increase efficiency beyond what single payer could.

Without government regulation it would be impossible for regular users to even understand the information about relative quality and pricing, even if that information is presented to them. Any service industry this complicated will naturally tend toward what Scott Adams refers to as a "Confusopoly," a group of corporations colluding to create intentionally confusing and conflicting services that their customers can't effectively compare. You see this already in phone plans and auto insurance. You'd have to enforce similar pricing structures among the companies.

Well we also get to the fact that you simply cannot shop around for urgent and/or emergency care. If you have a heart attack, or are hit by a drunk driver, you are not picking which hospital, which ambulance company serves you. Not life threatening, but how many of you have the energy or time to call 5 different doctors when you have a bad throat infection, or if your kids have an earache that is making them cry?

Mixolyde wrote:

Without government regulation it would be impossible for regular users to even understand the information about relative quality and pricing, even if that information is presented to them. Any service industry this complicated will naturally tend toward what Scott Adams refers to as a "Confusopoly," a group of corporations colluding to create intentionally confusing and conflicting services that their customers can't effectively compare. You see this already in phone plans and auto insurance. You'd have to enforce similar pricing structures among the companies.

Indeed. This is a problem the Obamacare exchanges are designed to partially address - they are expected to provide comprehensible information about insurance pricing and benefits (though not, unfortunately, actual health care services). The actual price you'll pay for a particular service at a particular facility is still going to be ungodly difficult (or impossible) to decipher in advance, though.

Obfuscated costs to consumers helps to ensure that market forces don't work to bring down costs in any kind of measurable way now. The only pressure that gets applied here is from insurance providers, but since most consumers effectively have no choice in insurance provider (they're going to use whatever their corporation opts for) it's not like you can just kick a lousy insurer to the curb and opt for one that provides better pressure.

Employers can theoretically shop around insurance providers for their entire workforce, but you start to look at something so large that individual pieces of the puzzle are buried in the massive scope of the system.

KingGorilla wrote:

Well we also get to the fact that you simply cannot shop around for urgent and/or emergency care. If you have a heart attack, or are hit by a drunk driver, you are not picking which hospital, which ambulance company serves you. Not life threatening, but how many of you have the energy or time to call 5 different doctors when you have a bad throat infection, or if your kids have an earache that is making them cry?

This is another problem, but (conceivably) insurance companies could apply pressure here as well. An individual consumer has no choice in a dire situation, but if insurers have to pay for substandard care frequently enough, it would be in their best interests to put pressure on the facilities to improve.

Again, I feel that this is all hypothetical and completely unrealistic so long as we are wedded to employer-provided insurance. But I do feel an intelligently regulated industry could increase efficiencies through market forces - it's just almost impossible that we can get to that point, and single payer is far superior to a bad market-driven system (which is what we have now).

In my opinion gore, the only way to get to a market driven system is to divorce care from insurance and hospital systems. Right now, based on region, prices are pre-negotiated years in advance by insurers and hospital systems. Even in a market where people can shop around for insurance, they are not participating directly in the care market. With auto insurance, consumers participate in both markets; consumers can even elect to pay out of pocket in the car repair market, rather than submitting an insurance claim to weigh costs and benefits.

Consumers in an insurance dominated market, do not have direct ties to the goods and services that they consume. I do not think you can call something a market where the consumers have little to no negotiating power.

But I do agree with you that a single payer system might be the best of both worlds. We get doctors and hospital systems competing among eachother more than in the present system. You reward best practices and sanction stepping out from that. It would not be dissimilar from how we handle military arms contracts. The Federal Government can be a supreme negotiator for large scale contracts.

A single payer system need not be a de facto single price fix, in lieu of several price fixes under the present system. An MRI done in LA indeed costs more than an MRI done in Petaluma. But rather we have doctors given government oversight on over-charging. You have bills sent to a federal branch, in lieu of an insurer and then a consumer to cover the balance. You may even be able to preserve vestiges of the present insurers by rewarding individuals who seek out supplemental insurance with tax incentives-in particular for the elderly.

KingGorilla wrote:

Consumers in an insurance dominated market, do not have direct ties to the goods and services that they consume. I do not think you can call something a market where the consumers have little to no negotiating power.

I agree that this is a fundamental issue. While the insurers' and individuals' interests will often align, they will not always, and when you rely solely on insurers to apply pressures on health care providers in situations where individuals cannot, you end up with an outcome that can benefit insurers at the expense of individuals. In the current system you even have to add in employers, who also have subtly different interests from either group.

I think it's an open question whether the interests of individuals and insurers would align closely enough if consumers could trivially "shop around" insurance providers directly. But the ability to do so is in my opinion required (although perhaps not sufficient) for such a system to drive real improvements in outcomes and costs for individuals.

A single payer system need not be a de facto single price fix, in lieu of several price fixes under the present system. An MRI done in LA indeed costs more than an MRI done in Petaluma. But rather we have doctors given government oversight on over-charging. You have bills sent to a federal branch, in lieu of an insurer and then a consumer to cover the balance. You may even be able to preserve vestiges of the present insurers by rewarding individuals who seek out supplemental insurance with tax incentives-in particular for the elderly.

This is indeed a good point. Single payer does not inherently mean that all doctors are going to get pay cuts; it just means that the entity that provides the insurance has more teeth than a mishmash of private insurers and (in theory at least) has interests more closely aligned with the individual consumers.

The Healthcare fiasco is just a great illustration of problems we suffered in the economy at large.

Employers chasing tax credits were buying ever more costly and elaborate insurance programs for employers. And as tax free compensation employees lapped it up. But this drove everyone to the top as far as costs.

Our economic assumption was that tax incentives are superior to direct government influx of funding, or subsidies. This trend continued over housing, education, and energy.

We have other faulty assumptions like that company officers would seek out innovation, lean practices, and avoid waste. Finance then created a system where there was more money in failing than success. We also made assumptions that high benefits to officers was a consequence of success.

Greenspan in his depositions to congress went over a lot of our false assumptions on the economy. And not to cross thread this too much...most Republicans in Congress think those proven wrong assumptions still work.

Response to impending Obamacare from Denny's franchise owner.

While some business owners threaten to cut workers' hours to avoid paying for their health care, a West Palm Beach, Fla., restaurant owner is going even further. John Metz said he will add a 5 percent surcharge to customers' bills to offset what he said are the increased costs of Obamacare, along with reducing his employees' hours.

"If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices. They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare," Metz told The Huffington Post. "Although it may sound terrible that I'm doing this, it's the only alternative. I've got to pass the cost on to the consumer."

He does say how much health insurance is costing him per full-time-employee ($5000-$6000 annually).

I don't quite follow him when he claims that a surcharge is not the same as raising prices:

Metz said he's risking the backlash to spread a message. "We're trying to get more restaurant operators rallied around the concept of adding a 5 percent surcharge to their bill to cover the costs of Obamacare as opposed to raising prices," he said.

I suppose by making it a fee that you don't see until you get the bill, you aren't raising the price on the menu, which from a marketing psychology standpoint makes some sense. From a consumer standpoint, you end up paying more for your Grand Slam, even if the menu hasn't changed.

The Denny's owner has a great idea. Just add the taxes onto the bill. The airlines have found this approach to be extremely lucrative.

Pappa Johns could have done the same thing. Advertise the $9.99 pizza then add on the $1 Obama Health Care Tax Surcharge.

The customer is going to pay for the increased health care costs one way or another, I could care less what they label it.