8/12/09: Controlling health care costs without reducing care quality: two informative audio discussions from PBS Newshour. The first one (audio here), is a discussion of the "coordinated-care" way of delivering health care: all physicians salaried, under one roof working together with a complete set of specialties, and not given incentives to order unnecessary procedures. This is the way it is done at the Cleveland Clinic and Mayo Clinic, where health care costs for the same health outcomes are 25% less. (NOTE the 25% is more than enough to get the 16% of uncovered US citizens covered.) The next is a discussion hosted by Judy Woodruff with the president of the Cleveland Clinic, (audio here).

7/23/09: MAYO Clinic (known for very good, cost-effective coordinated "whole-patient" treatment): It's CEO discusses the current intitiative (video here) and how to incorporate efficiency into the system. He indicates satisfaction with the recent White House insertion into its plan the proposal of setting up a body of national health-care experts to remold the health-care system into high efficiency and quality. He indicates, from meetings with them, that Obama Budget Director Peter Orszag and key Obama Health Adviser Ezekial Emmanuel both understand how to achieve efficiency in the health-care delivery system. He indicates approval of the plan to get everyone covered now, set up a body of MEDICAL experts to gradually make U.S. Health Care much more efficient. (I note that, though some Congressional Republicans have cited Mayo as disapproving of the Democratic plans (a)This was before the administration inserted the medical experts (b)that the Republicans begin to shout "Washington bureaucrats deciding your medical care" and "socialism" whenever anything like what Mayo wants is talked about.)

WHY US HEALTHCARE IS SO EXPENSIVE Wonderful video documentary and transcript Money-Driven Medicine(here) features lots of smart and decent Doctors talking about the waste and excessive care in our system. [I might add that though it is dispiriting that so much dumbness, rabble-rousing and rabble has been brought out by the health care debate, it is nice to see, that if you watch the best of television, you find that intelligent people, who know the health care system, and are committed to decency, have also come out. Not only that, many of them have been working quietly all along.]



8/14/09British Citizens starting to get really annoyed at some of our right-wing-Republican politicians attacks hitting their system: (story here). (The British have had full, free Universal Health Care since 1948. Their system (which is socialized and is different than the reform proposals here -- which keep service provision and most insurance completely private -- has shortcomings (partly because they only spend half of what we do per citizen). In the article, you see that one of the British citizens used in a right-wing-Republican commercial says she was deceived by those Republicans, and her view was misrepresented in the ads.)

7/11/09:WONDERFUL Bill Moyers (watch, read transcripts, and informative links here), showing cases of insurance companies not paying claims to policyholders, after people get sick based on searching for pre-existing conditions in their old records (this is in the first 10 minutes). The rest of the show has an ex industry insider from the Health Insurance Industry (PR Executive) discuss the current manipulation of the public by the industry (which is working really well for them).




6/20/09: CBS/Times poll (results here) indicates 64% of Americans support the government guaranteeing health insurance to everyone, 85% of Americans think the health care system needs to be fundamentally changed, most are willing to pay extra taxes to get everyone covered, and about 40% are willing to pay $500 a year in extra taxes to get everyone covered. (Frankly, the last number being only 40%, I am disappointed in the apparent selfishness of the remaining 60% of the people. An initial cost of $500. a year is probably what it needs for reasonable coverage of everyone, though cost savings from an overhaul could bring that down to $0 over time, or even result in substantial savings if the special interests can be controlled -- that is, if we can get a system more like every other industrialized country, where the savings would be maybe $2500. a year. Anyway, for my own psychological well-being, I'll assume most of those 60% who won't pay $500. are in personal financial messes that the loss of $500. a year would leave them sleeping in the forest.)


6/26/09:The Single-Payer alternative is being ignored by all of the relevant committees in Congress. The reason given is that it is politically unviable in this country, due to special interests, and a lot of people in the country who instinctively don't like government involvment (even though services would still be privately provided under single-payer). I have no reason to disagree with this assessment that single payer is not politically viable, so I personally accept not having single payer. Single payer would be the only plan that would not cost anything extra immediately (i.e. the $100-$150 billion a year needed for intitial years is for plans that are not single payer), but I accept paying extra as the cost of living in America, with a government structure making it difficult to get things done, and heavy and powerful special interests. As to one additional motivation that has been discussed lately in the intellectually stronger media: the 15% to 20% of the healthcare budget (3%-4% of GNP) that now goes to sales and administrative costs at the insurance companies, hospitals, and doctors' offices (consumed by clerks and insurance agents and their secretaries) would, with single-payer, be moved to actual health care providers like nurses and doctors (thus insuring the 1/6 of people now uninsured), but this would involve displacement of those clerks and insurance agents, who really have no socially productive useful skill, and would wind up having to take more competitive, possibly lower paying jobs.

Even though every other industrialized country has had universal health insurance coverage (further with pre-existing conditions further not affecting any premium) for between 15 and 95 years now (U.K: 95 years, France and Germany: 60 years, Canada: 55 years, Switzerland lowest number at 15 years) in the U.S. UNIVERSAL COVERAGE and even just REMOVAL OF PREXISTING-CONDITION QUALIFICATIONS IS IN SERIOUS DANGER OF BEING BLOCKED OR MADE TOO WEAK by Health and Insurance special interests.

Say an Insurance Company Covers Me and Takes my Premiums: Do I have to Worry About the Not Paying Medical Bills Because They Accuse Me of Not Reporting a Pre-Existing Condition?? See CBS Evening News with Katie Couric story and video report. (Regarding Assurant health policies). (Note all the reader discussion, after the written story, generally highlighting the financial risk and ruin.) CONNECTICUT ATTORNEY GENERAL POSTING ABOUT ASSURANT HEALTH INSURANCE DENYING CLAIMS IN BAD FAITH, CLAIMING A PRE-EXISTING CONDITION (related to Couric Story Above): See the story, here. CALIFORNIA INSURER (BLUE CROSS) WRITES DOCTORS ASKING THEM TO LOOK FOR UNREPORTED PRE-EXISTING-CONDITIONS IN PATIENTS (So They Don't Have to Pay Claims on Pre-existing Conditions) See story here. Typical example of the details you have to watch out for in our tricky system. See first 5 minutes of PBS News Video on This Page (A middle class woman in Nevada gets cancer, soon after her husband loses his job. They can't get COBRA from his job because of a loophole exempting the firm of less than 20 employees where he worked from COBRA. The state, like most, allows pre-existing-condition screening, so that makes insurance too expensive because of the cancer. The family makes $100. a year too much for Medicaid, and Medicaid won't make an exception. They pay themselves for an operation, but the woman can't get the needed supplementary chemotherapy, because they don't have enough money saved. The husband eventually gets a new job, but there is a waiting period for health insurance coverage in that new job, so she still goes without chemo.) * Policy wonks: What may have happened with Obama now leaving it to Congress, and funding only 40% of the extension to Universal Coverage (i.e. $60 billion a year instead of the needed $150 billion a year initial cost before any efficiencies kick in) is that Obama's campaign plan for Health Care was both underestimated in cost, and very weak in that by not mandating that everyone have health insurance, it would leave people able to freeload on the system by just picking up insurance when they get sick. Thus, Congress has now to clean this up. Our best solutions is let bygones be bygones about that flawed plan and cost estimate during the campaign -- let's spend the extra $90 billion dollars a year initially -- that's only 1/2 of one percent of the 13 trillion dollar GDP, before God punishes us for being so wicked as to let so many people go without healthcare, and so many people be bankrupted by health care! [Further, the health care system is now a burden on the economy in all sorts of ways that will make its repair save us money in the long run. Health care is a big cost on business, making it less competitive. Further, many people are staying unemployed to qualify for free Medicaid, or other low-income free or discounted state government health insurance. Others are unable to find jobs in states where they now live, and are staying in those states to keep favorable health insurance, rather than move to states where they can find jobs, but where a pre-existing condition, with the laws of those states, could make them lose insurance.] For the Following Graphs, NOTE Our Relative Costs per Person are Even Higher Because We Deny Coverage to 1/6 of our Population All the Other Countries Cover Everyone Per-Capita Health Costs Around the World (2003) Life Expectancy and Per-Capita Health Costs Around the World (2000) (Administration and experts correctly cite URGENT NEED FOR MAJOR OVERHAUL because of cost to government Medicare and Medicaid) and business affecting COMPETITIVENESS and American ECONOMIC RECOVERY and subsequent ECONOMIC SURVIVAL. [U.S. health care costs are 50% to 100% higher than all other developed countries as in the three plots above (taken from here and here), and here) with U.S. health care no more effective, and often less effective, even though not all of us are covered! Even though medical bankruptcy, occurring nowhere else in the developed world, occurs every 30 seconds here! The plot below is Congressional Budget Office projected Medicare, Medicaid, and Social Security spending as a percent of GDP. You should note that total Federal spending on everything, including defense, is about 22% of GDP. You see that Social Security is basically not the problem, is it's growth is in control, and it can be bounded with small cuts. The problem, which is rising to consume the entire 22% is Medicare and Medicaid, and will cause an eventual crisis, which will make the current financial one seem like small potatoes, if not stopped. Plot is based on Congressional Budget Office data, taken from this page. You can find similar graphs all over the internet, including this one from Ross Perot. U.S. Medicare, Medicaid, and Social Security Projected Spending (% of GDP)

Site Key: Obama Administration and Health Care Reform Now-- THIS PAGE To: By-State Sources and DANGERS Directly to State In That Table: AL AR AK AZ CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA MA ME MD MI MN MS MO MT NE NV NH NJ NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY General Information on Health Insurance and Pre-Existing Conditions Very Nice Frontline TV Video Show 3/31/09) Highly Recommended Showing People who have been hit by pre-existing conditions problems when between jobs (and have gone broke, and in one case, died). Many other issues on my pages here are discussed and illustrated, included the case of insurers issuing policies, but then, when bills come in, investigating and cancelling the policy due to (often trivial) omitted pre-existing conditions. There is also discussion of the basic need to mandate people hold coverage, to make the system work, and to fund adequately and restructure the system to cut out waste. (The video team goes to Mass, and finds some problem for people with incomes around $60,000 a year due to failures in those latter 2 points.) See alsoViewer Responses to the show (mostly pretty-informed-viewer thoughts). Health System Failure to be more Wasteful and Unafordable with More Feeloading due to the 2008 Genetic Non-Discrimination (GINA) Law (click here for details) "I mean, people have access to health care in America. After all, just go to an emergency room." (click here)-- G.W. Bush, 7/10/07 Is Employer Coverage Secure? See The Walmart Memo GDP on Healtcare--Comparing Countries (at Kaiser) Life Expectancy, Sytems, and GDP on Healthcare--Comparing Countries (at NPR) Q & A here. Obama-administration-connected Physician Ezekiel Emanuel discusses his plan and others in the video here. Health Insurance Industry Indicates It Might Not Block (this time--unlike B. Clinton 1994 with "Harry and Louise") a Mandated-Coverage Plan (provided the details are sweet enough financially for it, of course). (Further, we suspect the any possible willingness to forsake possible profits to prevent the misery of the American people has something to do with some near-bankrupt insurance companies now queueing up for a piece of that $700. billion)(Washington Post article on the queueing up here.) Health Insurance Industry will Assent to Universal Coverage, but is still being really sneaky. Look for them to try to eliminate an efficient (98% medical payout like Medicare) plan as an enrollee option, and demand subsidies for their own low-payout options. Look for the executives, if successful at making reform expensive and wasteful, or at blocking reform, to each get BIG MULTIMILLION-DOLLAR BONUSES, just like AIG INSURANCE executives who caused the meltdown. (The involved insurance executives are the same animal -- anything for a profit -- limited ethics -- people don't be fooled.) (See my comments here regarding a sneaky memo, if interested. Also, if you caught the Frontline on 3/31/09, you'll note the insurance people, while correct that mandatory coverage is needed to make the system work best, still lead us away from any solution that doesn't involve them--even though many of the most efficient countries have such system. Also, you'll note the insurance industry lobbiest, though admitting she herself is uninsurable in the individual market due to medical conditions, rather lamely points out that for 2 years now, the insurance industry has supported eventual (by 2016) universal coverage based on a mandated system of private coverage. This, while most developed countries have had universal for about 60 years now. Not to mention the shameful "Harry and Louise" campaign of 1993 which defeated the Clinton Universal Coverage plan.) Nice Judy Woodruff Interview with 4 Experts About the Coming Possible Reform Text, audio only, and video available on this page. (One expert is from the health industry, which a day earlier indicated it would not block reform this time under certain conditions. Of the 4 experts, 3 are pretty much all go for universal mandated coverage, with the other, from the conservative Heritage foundation saying go but just proceed a bit carefully.) Discussion (2/27/09) about Obama budget health care framework: mainstream lower-system-change proposals (Len Nichols) vs. single payer (Dr. David Himmelstein): Video and text here. [There is an interesting assertion by Dr. Himmelstein that the reason the more efficient single payer is seen as unlikely to get through is not the opposition of the people in Middle America, but rather that Congress gets campaign money from the insurance industry. Interesting, Max Baucu, is cited as having received quite a hefty sum from that industry. I'm not sure about that assertion, but it sure is an interesting angle on things. ]

"In an exact sense the present crisis of western democracy is a crisis of journalism." -- Walter Lippmann, 1920

The election back in November was closer than most people realize -- Pre-existing condition problems would have gotten MUCH WORSE under the McCain Proposal (Due to destruction of whatever pre-existing-conditions protections exist in each state.) Republican instincts to remove government involvement are correct in many cases, but in the Health Insurance case they are not thinking through the actual technical details of the situation, and are being unthinking ideologues.) See here, if interested

BOOK TV--It's Really Good. Archived free BookTV program video feeds Watch live (weekends) (C-SPAN 2)

SOME CAMPAIGN DECEPTIONS (happen to be by McCain Campaign) which I am keeping around now, well after the election, as examples for us to study of how the government is getting taken away from the people by the special interests (and making us sick, broke, and otherwise miserable). Deception 1: McCain posted on his Website; archived here post-election. This text is near the bottom of McCain's page: "MYTH: Some Claim That Under John McCain's Plan, Those With Pre-Existing Conditions Would Be Denied Insurance." To anyone not armed to expect a deceptively worded statement, it sounds like under McCain's proposal, an insurer would not be able to turn you down for a pre-existing condition. But the McCain proposal kept the precise pre-existing-condition-screened system in place. Currently, in many states, a "high-risk-pool" is set up to cover some of the people who can't pass pre-existing condition screens. These plans can run up to $23,000. or more a year per person (as in CT), they often have ridiculous exclusions (e.g., paying at most $75,000 a year in your medical bills and with a waiting list in California, paying only half of out-of-state emergency treatment in MO), and they keep many people with pre-existing conditions ineligible. McCain keeps this precise system. (On his site, he renamed "high-risk-pools" as "guaranteed acceptance plans" to make it sound like something would change.) If McCain himself didn't intend to fool you, then it is clear he is working with deceptive marketing-types from the insurance industry who intentionlally came up with language that would fool most people. Under McCain, you still would have paid much more for insurance, and could fall through the gap entirely, if you had or got a pre-existing condition. McCain's so called MYTH statement would only be a myth if stretched to "those With Pre-Existing Conditions Would Be Denied the ability to get any Insurance at all". And, this would be very expensive high-risk-pool insurance (up to $23,000 a year per person), that you might not be able to afford. And further, with the current set of high risk pools, 35 states of 50+D.C. have some sort of big gap that misses some or all people. Those would have had to be ironed out in each and every state. (And further, massive funding for filling those gaps for people with pre-existing conditions would have to come from somewhere. And McCain actually melted down the limited current funding, with his "across state lines" provision.) Deception 2: In the first presidential debate, and then the first vice-presidential debate, we have a big misportrayal of the Obama plan as a government takeover. For example, in the VP debate, Palin said that Obama’s plan would be "universal government run" health care and that health care would be "taken over by the feds." However, as factcheck.org indicates, that's not the case at all. Obama’s plan would not replace or remove private insurance, or require people to enroll in a public plan. My favorite goofy little deception by McCain (nothing to do with insurance-- but it's cute) -- the "3 million dollar overhead projector for a planetarium" Obama earmark: As I guessed during the debate, and other science people may have guessed, that turns out to be a replacement of a 40-year old projector of the night sky at the major Chicago planetarium, the Adler. (factcheck.org on Adler Planetarium projector). In my book, over the next 40 years, about two million kids, young adults, and some adults would have learned a lot of science from it, had the earmark been approved. (I learned a lot, from the one at the Hayden in NYC. And I now have a Ph.D. in science!) Factcheck.org on both candidates on Presidential debate # 3. [Note: factcheck.org isn't perfect, but it's stilll pretty good. Notably, I find they are good with exact facts, but sometimes miss conspicous aspects when economic or other analysis is involved.] Silly People Looking for a Too-Good-To-Be-True Bargain Get Just What They Deserve Ah, the silly citizens. When they need non-group health insurance, and have been completely healthy, they buy this cheap health insurance that is cheap based on keeping all the unhealthy people away. It's really cheap, maybe $900. a year. It's a wasteful product, being that it only pays out 55%-75% in claims of the premiums paid in. But they've got really cheap rates. They see "Harry and Louise" (ad 2), and they feel really good about their really cheap insurance. [More recently (11/16/08), in this Marketwatch article, note paragraphs 7-10, where low average rates on individual insurance, achieved by basically keeping the chronically very sick without policies, are touted by a very interested party from a corporation that sells individual policies. Note also, in earlier paragraphs in the same article, a health insurance industry spokesperson posturing to bring "change"--some form of limited change--an illusion of "change" if they can get away with it this time. He indeed knows you can fool most of the people most of the time.] But then, when those silly people do get sick (which is what they had insurance for), they wind up with much higher rates, or no insurance at all So, collectively, we are morons looking for a bargain by getting insurance that keeps away unhealthy people. And when we get sick, that insurance, that keeps away sick people, says "good luck, buddy", and we get what we deserve. Curious, isn't it, that individual insurers never advertise their "payout rates". (This is the percentage paid out in claims for every premium dollar paid in.) Not only don't they advertise, but they won't even tell me when I ask lately, and often pretend never to have heard of such a term. You would think that it is a fundamental number that the consumer needs to know, like pixels in a digital camera, or fuel-burning efficiency in a furnace, both of which are always prominent when you look to buy it. But with health insurers, the product is so complicated that the company selling you insurance has an information advantage that the consumer isn't knowledgeable enough to break. And if they did give you a number, which would usually be in the 65% to 75% zone, and you compared to employer plan numbers, around 90%, or government Medicare efficiency (98%), you'd really know you were buying a wasteful, inefficient product. 10/24/08: Plans for government aid to Insurance Companies (besides AIG) in the works Due to Financial Crisis!(According to several guests on PBS Lehrer NewsHour). Aid to more Insurance Companies??? The very same entities that won't insure people with pre-existing conditions in the U.S., and lobby for keeping able to keep not insuring them, when no other industrialized country allows the non-insurance of people due to pre-existing conditions? The Insurance Companies NOW HAVE A PRE-EXISTING CONDITION (near bankruptcy), AND WANT US TO INSURE THEM? The Insurance Companies want help from us??? IF THERE IS TO BE ANY JUSTIICE AT ALL, IN LIGHT OF THIS, UNIVERSAL-COVERAGE-TYPE PRE-EXISTING CONDITION REFORM MUST BE PASSED WITHIN 90 DAYS OF A NEW PRESIDENT AND CONGRESS!

WHAT IS OUR CURRENT SYSTEM, BY THE WAY? People under 65: Currently, people with very low incomes and assets (often assets < $2000 though sometimes a car or something else may be allowed) get free medical care (Medicaid). (NOTE: In a few states, even these very poor people will not be eligible for Medicaid if they do not have dependent children.) The quality varies based on the state--in many states, they really try to not stigmatize the people getting Medicaid, and feel like they just have a decent HMO. The trick for these people is that they're really in what economists call a poverty trap. If they work hard, they'll lose their free health insurance, and be much worse off and possibly dead. In the statistics, by the way, these people all count as insured -- they are not among the 46 million (almost 1/6 of the country) counted as uninsured. People above the very low Medicaid limits, but without enough money to pay for whatever insurance is available, when their job doesn't provide insurance, or when they are between jobs, are most of the uninsured. These people can be classified as "working poor" or "working class income" if they have lower incomes, and can't afford health insurance, and don't get it from their job. Besides working-class-level salaries, there are actually many higher-income/asset middle class people in this group. This is because, in most U.S. states, insurance can be denied due to pre-existing conditions. Further, in many states, a special "high-risk-pool" is set up by the state to cover them, but rates can hit $24,000 a year per person, and there are gaps. Also, many states have no high risk pool, and no alternate mechanism, or a humongous-gap alternate mechanism. (I took it upon to study the pre-existing condition wipeout risk to the hard-saving relatively-high-income middle class people here in my by-state dangers table. There is a wipeout risk in 23 states if you never move between states, and 36 if you do try to move. Few people know this.) Most insurance currently is employer-based insurance. Typically, smaller employers buy group insurance from an insurance company. The rates they pay depend on the state. In most states, nowadays for employers buying the insurance have some form of community rating or modified community rating, where they don't pay too much more for sicker employees. (This is in contrast to what happens to people in those same states when they are sick--individual policies in most of these same states that are community-rated for the employer are not community rated for the individual. This is one reason many experts are concerned about moving away from employer-based insurance without fixing the individual insurance regulations first.) At any rate, there can still be pre-existing-conditions coverage problems for employees of employers who have purchased group insurance. I am not an expert in this area, but you need to check the state specifics if this affects you. For employer-based insurance for large employers, the employer is usually self-insured, which means that they set up an insurance plan and just pay the cost of the medical bills that roll in themselves. (They often have an insurance company administer it, but they pay them a fee and the medical bills. The insurance company doesn't assume the medical risk.) Note that these large employer plans are usually exempt from state regulations by a Federal ERISA law. I am not an expert in this area, but I have been told there are few or no regulations of the Health insurance under ERISA. One thing I would like to point out about employer based plans is that, though Obama and the Democrats want to keep that system now, and that's OK, in the further future we might want to get rid of it. The reason is that there is a kind of manipulation or hanky-panky with freeloading on society, where employers can higher just young or healthy people, and reduce there medical costs. This keeps older and less healthy people both uninsured and unemployed. (Want an example of where this was at least contemplated--See The Walmart Memo. And I'm really not blaming Walmart -- there's a real economic force to be dealt with, and we have to engineer our system well.) Ironically, the McCain plan would have acted to de-employerize health insurance, which in itself is good, but because the plan messed up all protections for pre-existing conditions, and put people into the inefficient (65%-75% payout rate) individual system, it would have actually made things much, much, worse, as I posted here about a month before the election when I found out the exact details of his plan. [Incidentally (11/18/08), with the three American auto makers asking for a government bailout to stave off bankruptcy, many are pointing out that Toyota and other Japanese carmakers when manufacturing in the U.S. have lower costs than U.S. automakers manufacturing in the U.S. Though there probably are other factors, such as too many car models and dealerships for the US companies, I'll bet some of Toyota's reduced cost is that being newer in manufacturing in the U.S., they have younger employees. Think about this, and see what a mess self-insured employerized insurance can make of the economy!] Also, though I think Obama will keep the tax-favorable treatment of employer-based insurance, as we make things more optimal in the future, we may want to give equal deductions whether insurance is individual or employer. That is, we want to break the tie of health insurance (and in fact pension, etc.) to employers, since when we don't have continuous long term employment with one employer, all those things get messed up. (We have such a stupid way of doing things! It's stupider now that young people are expected to go between 10 jobs, not 1 job, per lifetime.) Now, there would be problems dis-employer-connecting in a non-mandated system (particularly, freeloading by individual people not replacing lost employer-provided insurance). But somes of the issues of de-employerization are false: the economics-versed will realize that "employer-pays" vs. "I pay" vs. "we split the cost" is a false belief (under everyone rational, no psychological effects, and no-sticky-entanglement agent assumptions at least.) Oh, yes. For completeness let me add that people with over $10,000,000 in assets often don't have or need insurance. They just pay cash. And at the risk of sounding facetious, people in prison get free medical treatment, whether they have a pre-existing condition or not. Current System, for People 65 and Up: Medicare, a program which has been in place since the mid 1960s, insures people for a modest fee. (Funding from a payroll tax.) There is no pre-existing conditions exclusion. The standard version of the program has a notoriously high efficiency measured by "payout ratio" of around 98%. There are also certain controversial private alternatives, which cost the Federal government something like $1200. more a year per person, due to the administrative inefficiency and cost of marketing the private alternatives. (Republicans generally support these alternative plans, indicating that they believe that though not the case now, ultimately the private plans will manage to squeeze costs down. At the moment, in my area of upstate New York, it looks like much of that $1200. is going into the ads I see on TV for the various private Medicare plans, and the sales people. Several different companies offer on TV to send a sales person (the ads say "health insurance advisor") out to the older people.) Do note that Medicare falls short in some areas, so people with assets to lose often purchase supplemental plans. I do not myself know about the problems people with pre-existing conditions have with supplemental plans. I do believe that at least in certain states, if you purchase a supplemental plan when you first hit 65 and start Medicare, you are O.K. Since so much of the medical system is Medicare (older people use a lot of care), you would think no one would sensibly object to the Obama plan, which has less of a government roll than Medicare. But, the explanation is that the current system for under 65 year old people is where the profit lies for many, many insurance companies. That is, those 65% to 75% payout ratios on individual policies mean there is 25% to 35% of premium left to be spread around to insurance agents, insurance company employees, and profit. Current Sytstem and Hidden Cost Shifting--Hidden Cost Shifting Now Worsening Due to Economic Meltdown The current system shifts the cost of medical care of those without insurance, and with lesser insurance, to the rest of us in a dishonest, hidden way. (An honest way would be to pay in an explicit way where the costs are calculated and announced-- e.g., the government budget with taxes. A dishonest way is just to have it all added to our medical and insurance bills, with nobody knowing what the amount really is. Hospitals and doctors rarely dare calculate the number, because if they have to tell you a third of your bill is really for other people, you might not pay.) The cost shifting is from the uninsured, who are required to be stabilized by law in a hospital whether or not they will be able to pay. Also, it occurs for hospital and doctor "charity" care. It occurs commonly for Medicaid -- when the state governments set doctor and hospital reimbursement rates too low. (And for example, in New York State, they've had a budget emergency due to the meltdown, and announced (11/12/08) a plan to cut the Medicaid payment amounts. So the cost will get shifted to all not-on-Medicaid state residents.) There is also cost-shifting in the patchwork of state government programs designed to help some of the uninsured, with a little too much income for Medicaid, get medical care. Those usually involve some government money, and also often involve an unrealistically low payment rate to doctors and hospitals (often with a law requiring that the doctors and hospitals accept that unrealistically low payment). This is yet more cost shifting, and of course this should get worse as state governments go into budget troubles. YOUNGER PEOPLE NOTE: You may be too young to know that in the early Bill Clinton Presidency years, around 1993, we were on the verge of getting universal healthcare in place when the special interests came in, ran these "Harry and Louise" ads to scare the people away from it. And it worked. (Thus, unlike the current financial meltdown, you can't really blame the government leaders--some of them were alert --you can blame the special interests, and the ability of some of the people to be mislead.) Since you, young people, can expect to have not one steady job, but rather 10 shorter-term jobs, over your lifetime, lets hope your parents and grandparents will let you have reliable and steady health care. Video: Economic Journalist Peter Gosselin and others discuss his book High Wire, about the increased risk of sudden financial catastrophes to families in America due to health insurance and other reasons. Frontline with Full Video on 5 Country's Systems Documentary Showing how well the current system is working for the working poor . The people followed in this documentary are all in the lower-middle and working-poor class. I find it a flaw that they missed the more well to do middle class, which is also at high risk. Though the better-off portion of the middle class has a lower likelihood of having no care or far inferior care most of the time than the working poor, the system still leaves no care and inferior care all too likely. And further, it gets combined with the likelihood of losing say $600,000 worth of savings all at once. (The working poor simply don't have that much in assets to lose.) American Prospect Special Report on Universal Health Care--May, 2008 . The following articles strike me as particularly lucid: Ezra Klein on two of the major proposals and their variants, Marcia Angell on the Massachusetts reform, and Anthony Wright on the California attempt. Cross-Insurer Database of Pre-Existing Conditions: Some people are not aware of it, and think they might give a try at just not putting down a pre-existing conditions. The health insurance industry maintains a large cross-insurer database of pre-existing conditions. Note below, my own policy's privacy statement indicates they can do that, as below, circled. ("Medical underwriting" is precisely pre-existing-condition-screening. The industry prefers that term, because it sounds more innocent, and most people don't know what it is.)

WHY IS HEALTH INSURANCE DIFFERENT FROM OTHER INSURANCE LIKE FIRE AND AUTO?, (that don't need pre-existing condition regulation or subsidies). This is a perceptive question with a compelling answer. A)Pre-Existing Condition Regulations are Needed because the larger part of the cost of a medical event (heart attack, coming down with cancer, etc.) is not the immediate cost of treatment, but rather the future cost of treatment due to conditions which will pre-existing after the event. (Compare: If your house burns, it gets rebuilt and the insurer pays for that, but you can still get insurance on the new house because it is not more likely to burn again. Auto is actually similar -- yes, there is a detail that after an accident the insurer may presume you are a less good driver and raise your rate even 50% for a few years, but this is nothing like the event of a heart attack or cancer, where if you lose your current insurance, or you need to change insurers because your insurance pool gets cherry picked (see box below), your unregulated insurance premium (i.e. expected medical cost) may rise to 10 or 30 times what is was. Another way of looking at the paragraph above is that any truly rational consumer (with assets to lose) will only buy health insurance that covers, for a medical event, not only the cost of treatment now, but the elevated expected cost of future treatment which becomes apparent due to the current medical event. Of course, one reason no individual or job insurance offers this is that only about 2% of people are economics-quantitative analytical enough to see this even when pointed out, and the other 98% are oblivious to this. (Thus, for the health insurance product, consumers are not informed consumers -- rather they are terribly, terribly ignorant consumers for this product.) Another reason the rational-consumer insurance is unavailable is that such truly sound insurance is impossible to offer, based on the unpredictability of future medical advances and costs. Thus, the only available solution for a rational consumer would be to join a non-revocable agreement to pool medical costs with a large number of other individuals. Well, if you make that large group of individuals everyone, this is one form of universal care. B)Subsidies are Needed (even after regulation for pre-existing conditions) because many people simply can't earn enough to pay for the average cost of treating disease. This has much to do with the free-market spirit of U.S. regulations, where those with limited labor market power to garner a high wage (which arises largely because there is not a shortage of people doing the particular work that they do in the absence of unions of much higher minimum wages). C)Regulation Reducing Redundancy and Increasing Administrative Efficiency are not essential, but desirable, because of the extreme waste, partly in the insurance-marketing area. For example, because of so many insurers existing with all kinds of different rules, perhaps 20%-25% of doctor and hospital costs are due to assistants dealing with all the forms and different pre-approval rules for the different insurers. Further, on non-employer insurance, beyond that administrative loss on all health insurance, the insurance company only typically pays out 60%-72% in bills of the premium dollars it takes in. (I actually saw 55% for one individual insurance policy one time.) Thus, we spend 16% of GNP on medical care whereas the other industrialized countries spend 6%-11% or GNP, and many have longer life expectancies than us.

"YOU JUST GO TO AN EMERGENCY ROOM." --G.W.B. (yes--he said it--see below) From researching the (often simply incompetent) provisions at the state level to keep the middle class from going into medical-related poverty, I am afraid I believe now that only Universal Coverage at the National Level would substantially solve the problem. (There are just too many ways for people to freeload on the rest of us otherwise. Often, the freeloading is involuntary -- good people not freeloading pay extra for health insurance to support the freeloaders, then they find that the insurance system that they thought protected them has left them without assets, and they have to start freeloading themselves.) Universal coverage seems possible in a few years, but the country may blow it again -- and it may continue that only the very poor, the exceptionally well off, and the imprisoned can count on stable, reliable, continuous health insurance. The recent George W. Bush advice, "I mean, people have access to health care in America. After all, YOU JUST GO TO AN EMERGENCY ROOM."* is not so hot if you are trying to have something left to lose. If you go to the emergency room, and/or the the hospital, they will track you down and make you pay. Until and unless you have nothing left to lose. That's the problem, the cluelessness, with the Medicaid- or Emergency-Room-Only safety-net system he is touting in the speech. (And let's not forget that those emergency room costs get cost-shifted to everyone with insurance, making their insurance unaffordable.) *Yes, he really said that. Here at this transcript at the White House Site, paragraph 16, the one that starts with "The immediate goal...". The video of available on the top right of that page, and within the video, you can find the President saying that remark at timing 7:05 (i.e. seven minutes and five seconds in).

The Cherry Picking Dynamic (in States Without Community Rating / Modified Community Rating): Suppose you live in a state without community rating or modified community rating. (Community rating and modified community rating prevent what is called "cherry picking".) Say you already have an individual health insurance policy in that state, and your state even has laws say that it can't be cancelled on you, or at least that it can't be cancelled on you unless the insurer stops offering insurance in the state. You might feel pretty secure. There's a way you might get stuck, which you might not expect. Say you do develop a medical condition: a heart problem, cancer, etc., and at the time you currently have private insurance. You might feel secure: you have a policy, you keep paying the premium, and under the laws of your state your company can not cancel your policy unless they decide to cancel all policies in the state. But that sense of security is false. What will happen is this: all of the people who are in your insurance policy's "pool" of people were pretty healthy when they got issued their policy. But over time, a few have gotten sick, but most are still pretty healthy. The small number of sick people in the pool will start to make rates rise a bit. Then other insurance companies, and possibly your own insurance company, will seek out the people in the pool who are still healthy, and sell them insurance that is a bit cheaper, since there are no sick people in that new pool. As they keep doing this, only pretty sick people will be left in your pool, and your insurance rates will get very high. You won't be able to get new insurance from a private company, though, unless they exclude your expensive condition. So, just like people who had an explicit loss of an old insurer, you're stuck, and you really need reasonably priced insurance or you may go broke. (This continuous increase in price due to other insurance companies cherry-picking out healthy people from the pool actually happened to me about 5 or 10 years ago in CT. I had a policy that started at about $1000 a year, and in less than 5 years it went to about $5000 a year, which was more than the cost of the high risk pool for my young age at the time. When I called the insurance company that had issued the policy to ask how high the rate might go, they told me they couldn't say, but then they connected me immediately to their Connecticut agent, who tried to sell me a new pre-existing-screened policy. (That is, they tried to cherry-pick me from their own pool.) At that point, I just took the high-risk pool even though I was healthy, in order to avoid any part in the insane system, and also resolved to leave the state I was in -- CT -- for a community-rated state at the nearest economically opportune time.) (Aside: that insurance company probably had cherry picked other people out of its own pool prior, and that was probably, in part, responsible for my rate rising so high. Whether that is illegal or not -- I haven't checked -- is irrelevant. If they hadn't cherry picked healthy people out, other insurance companies would have. The pre-existing-screened system has that fundamental cherry-picking mechanism for rates on current policy holders to rise, and force them to get a new policy if they are still healthy. Moreover, folks of an economics or mathematical bent will easily see that this product being billed as "insurance", which is supposed to pool risk, actually pools only the risk of costs for a period of time after disease onset, that period of time getting shorter and shorter as the technology for cherry-picking gets better and better. Only restraint on the part of cherry pickers, motivated not by any morality, but rather by not making too obvious the uselessness of the consequent product, prevents them from using computer and internet technology to bring that period of time of being insured down to say 1 hour from disease onset.) Another thing I wanted to point out about cherry-picking is that, although agents and insurers routinely actively pursue this strategy (the agent for a commission that they get from this wasteful churning), without regulations, even if agents and insurers tried to be very, very moral and absolutely stopped trying to do it, the same thing would happen by itself automatically. To see why this happens, say I and 99 oother very healthy pass a pre-existing condition screen and get put in an insurance pool by an insurance company. The rates are low, maybe $1,000 a year because we are all so healthy. Well, in a few years, maybe I and someone else in the pool have a heart attack. The rates for the 100 people in the pool go up to say $1900. a year for everyone, because of the medical bills and likely future medical bills of the two of us. But then 20 of the 98 people who didn't get sick and are still really healthy realize that they can pick up new health insurance for just $1150. (they're a little older than when they got the policy), and they do so. Then just 80 people are paying for 2 sick people in the original pool, so the rates are $2400. a year, and all but the non-asleep of the remaining healthy people in the pool get new insurance. So in just a few years, there might be 5 people in the pool, 2 of them have heart conditions, and so the 5 of us pay $80,000. a year.

WHY ULTIMATELY, EMPLOYER-SELF-INSURED EMPLOYEE HEALTH INSURANCE WILL NEED TO BE DONE AWAY WITH As the famous Walmart Memo reifies for us, large corporations that "self insure" their employees are under increasing pressure (due to globalization competitive pressures, rising stockholder nastiness, and rising health care costs as a percent of GDP) to minimize health insurance costs by selecting healthier and younger employees. Meanwhile, smaller companies can't handle the risk of self insuring, and, to cover their employees, must purchase small group insurance from an insurance company. These typically follow community rating and modified community rating rules (in far more states than the 5 states that community-rate and modified-community-rate individual insurance). Further, universal coverage being inevitible (though perhaps 40 years away--since you indeed can fool most of the people all of the time), premiums will no doubt be based on community rating or modified community rating. I presume here that there is not a single payer, but rather independent insurance companies under community rating or modified community rating rules, with some possible risk-adjustment between insurers. With modest math skill and a single economics course, it is easy to see that what happens if large employers can self-insure and thus form their own pools, is that they save lots of money by organizing their own pools of just healthy and/or younger employees. It is also not hard to see that they gain a competitive advantage for a strategy of hiring just healthy, young employees. This competitive advantage has nothing to do with their economic efficiency -- it just has to do with freeloading on the rest of society by not pooling everyone's risk in their own pool. Thus, they are getting around community rating or modified community rating by having the legal right to form their own pools not subject to such community rating. Obviously, the economically sound solution is that we make Walmart, Target, etc., if they do provide insurance for its employees, buy it from a community rated private or non-profit company. (Obviously, they will likely react by paying for less of the proportion of the cost than they do now, and the difference will be borne by the taxpayer, but this honest accounting removes economic misincentives leading to misallocation of resources, and actually it's zero net lost for the taxpayer when costs are summed up over society. That is, there is an economic net gain, being that the loss from misallocation of resources is cleaned up, and the net other costs: through taxes and cost-shifing adds to 0.)

DOES THE CURRENT INSURANCE SYSTEM MAKE IT HARDER FOR OLDER PEOPLE, AND LESS HEALTHY PEOPLE, TO GET JOBS? See Walmart Memo.

TWO GENERAL SOURCES OF SOME BY-STATE AND CROSS-STATE INFORMATION: is the Georgetown University All-States Health Insurance Site. There is, for individual insurance, a by-state comparison table on the site: Georgetown By-State Table) THERE IS EVEN BETTER STATE-COMPARISION INFORMATION (ABOUT INDIVIDUAL AND STATE SMALL GROUP RULES) AT: kaiser statehealthfacts.org "Managed Care and Health Insurance" subpage.,

DO YOU MISS HARRY AND LOUISE? Well, they are available on YouTube "Harry and Louise" ads here. For the record, lets dissect these 2 ads. The first one points out the minor problem of individuals possibly winding up changing specific health plans, and getting ones "government designed" (rather than insurance-company designed to maximize profits by whatever sneaky means). (Poor stressed Harry and Louise must have a bill for something that the new plan won't cover and they clearly are living paycheck to paycheck and can't swing that extra expense.) They make it sound scary. Somehow the really scary thing, that thanks to the influence of the ad still prevails: the reasonable possibility of having no health insurance at a time when $400,000 in medical bills roll in is out of the picture. (Let's see how Harry and Louise handle that.) Of course, let's not forget that Harry and Louise, by being such scaredy cats, are keeping millions and millions of people who work at jobs without health insurance from getting care for really serious things that will kill or cripple them. [As a concession to the significant minority of Americans who are, like Harry and Louise, pathetic, current reformers like Clinton and Obama have been careful to specify in their plans things like "if you are happy with your current plan, nothing will change".] The second ad in the video is an attack on community rating. The large cost increase that an individual who gets individual health insurance while very healthy is, in fact, realistic in community rated states and modified community rated states vs. the unregulated system. But what Harry and Louise don't say is that the health insurance in unregulated states is just lousy, short term insurance. If the folks in the unregulated state with the cheap insurance do get and stay sick, they will have a pre-existing condition, and their rates will go really high, as insurers cherry pick only the people without pre-existing conditions out of the pool of people with the cheap policy. In community rated and modified community rated states, this doesn't happen. Rates are higher, but the coverage is real long term coverage that doesn't have cost increase on you in the long term if you do get sick. If you have a a serious pre-existing condition in the non-community-rates states that Harry and Louise want to live in, health insurance can be really expensive if available--e.g. now $25,000 a year in CT counting stop-loss in high age groups. And CT is not one of the states where I have put DANGER in my By-State Comparitive Table, for which states there is a real risk of having no coverage at all, or no coverage for the bulk of the expenses of pre-existing conditions. Of course, in ad 2, the image of responsible non-smokers paying for irresponsible smokers in community rating is misleading. Yes, that does happen with community rating. It may raise rates by a few percent for non-smokers. That could easily be addressed by Harry and Louise demanding that community rating states just allow the companies charge more for smokers and prior smokers -- the jump to no community rating at all only follows if you are -- well -- very dumb. Apparently Harry and Louise are not only pathetically unable to cope with any change, but very dumb. By the way, the reason the insurance companies behind Harry and Louise don't like community rating is that it takes away the profitable (society-destructive) business model of many health insurance companies, which is to sell insurance only to very healthy people. Shame on these particular American businessmen. (From Walter Lippmann: But when the chaff of silliness, baseness, and deception is so voluminous that it submerges the kernels of truth, freedom of speech may produce such frivolity, or such mischief, that it cannot be preserved against the demand for a restoration of order or of decency. If there is a dividing line between liberty and license, it is where freedom of speech is no longer respected as a procedure of the truth and becomes the unrestricted right to exploit the ignorance, and to incite the passions, of the people. Then freedom is such a hullabaloo of sophistry, propaganda, special pleading, lobbying, and salesmanship that it is difficult to remember why freedom of speech is worth the pain and trouble of defending it. from Essays in the Public Philosophy)

From Whence Came the Crisis? Back in, say the 60's, (a)medical costs were only about 4% of the GNP and (b)by virtue of America's economic dominance and consensus of the people running the country, jobs could be stable. In the interim, medical technology has evolved, making us live longer, but also quadrupling its cost (there went (a)), and much of the world has recovered economically or started to develop, plus greed has gotten a bit more in fashion, and there went (b). What this has done, is made the formerly manageable inefficiency of the US system get to affect us and our economic incentives much more (due to the price quadrupling and further now cost must be shifted to cover the uninsured). To see the inefficiency: if you wind up with an individual policy, typically only about 75% is paid out in claims (an old policy of mine stated on the application that only 60% is paid out in claims). The inefficiency on individual policies is due to advertising, paying sales-people, the statisticians at the company working on ways to find healthy people to take away from other plans to sell them cheaper insurance, the insurance underwriter reviewing each application and perhaps ordering medical tests to make sure the person doesn't have too many pre-existing conditions, and then paying the lawyers to defend not paying claims if they suspect a pre-existing condition existed. But that was only the added inefficiency of individual policies, which are what policies you get if you don't have insurance through a job. Group policies pay out bills more like 90% of premiums. On these and all policies we still have 20% or 30% of the bills being to deal with all of the insurance companies to get payment. Also, collection agencies, and lawyers for big cases. Further, hospitals and doctors need to be able to attract customers, and so they advertise, and each hospital and medical office gets the latest expensive medical machines, so they can attract customers, even though the machines are most of the time not being used, and could be shared if there were some coordinating force. As well, our system is mostly fee-for-service, and thus there is an incentive for not-really-essential services, especially so the docs can pay back the humongo loans for medical school. Undoubtedly, medical malpractice is some of the cost, and that should be fixed, but it is the smaller part of the costs. If we could muster the political initiative to fix this waste, it would seem we could get to be like the other industrialized countries, where life expectancy is often better than ours, costs are 1/2 to 2/3 of ours, and middle-class people don't live in fear of losing all their money, and don't have their lives revolve around that fear. And in many of those countries are fully democratic, and people are free to read what they like and say what they like. I suspect they may feel freer in that they can move from place to place and job to job without worrying about getting bankrupt over health insurance issues. In all honesty, I can only see that the problem may be somewhat solved only if, in the 2008 election, we get one of the Democrats currently running as a president, and further a strong Democratic majority in both houses. Even so, the special interests may drag out a new version of the "Harry and Louise" commercials, and I can see that it may fail. In any case, the country has so many aggressive special interests, that we certainly won't get something like the highly efficient systems that they have in some other countries. We'll still be paying 16% of the GNP for healthcare, rather than 8% or 10%. But that will have to be O.K.

Who am I? I am Norm Spier, a mathematical statistician (most applied work in the medical area) who lives in New York State.

If you have any comments, or want to point out an error or oversight, please email me at norm@nastechservices.com

Plug for Questia: For those not familiar with it, Questia is a digital academic-type library with about 60,000 fully searchable academic-level books, and some articles.

The collection has some older, out-of-print books, but also many recent books. Though it is not as complete as a decent university library (by far), I've subscribed to this for a few years, and find it an invaluable reference when trying to, say, get some criticism on a novel, or get some details on a historical, social scientific, or philosophical item. The library is not strong on science, but it is decent throughout the humanities. And the full-text searchability -- over all books, or within a book, is really useful.

Thus, I am disappointed at the Questia marketing strategy of gearing towards college students, which strategy becomes apparent as soon as you log onto the sign-up site. I am not disappointed at Questia, but rather that the real world has made it such that a partly-adult-geared strategy won't work. That is, mostly, the people are after the books on the Questia site so that they can go through college. And mostly, they are going through college so that they can get a better job. Anyway, as a 50-year old man who went to college and grad school some years ago, I recommend the site for the intellectually curious. Note Questia often has a free full-service trial.



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Pre-existing conditions and health insurance