When you're ready to get private insurance conglomerates out of the system and let the government run the program on a non profit basis let me know. That will release about eight dollar per hundred currently being spent every day in our economy to be spent in other areas and that will stimulate those parts of the market creating hundreds of thousands of new jobs.

“We will accept no less than complete health care for all, for free.”

How do you propose to get “free” health care? Force the doctors and nurses to work for nothing?

I'm just not sure why we need the insurance companies in this scheme. They're loss leaders. Cost centers. Whatever you want to call them. They're making everything less efficient.

Your plan so far involves one risk pool with transparent and unitary pricing. The risk pool should be "Everyone in the United States" pricing should be determined by the buying power of that risk pool, as represented by the government. There's no need for an insurance company in this.

thosethingswesay.blogspot.com

The workman is worthy of his hire. This is true when it comes to people who actually deliver services, like physicians, nurses, and lab technicians. But what value add do the insurance companies add to the equation. You cannot capitalize on someones medical crisis! A medical crisis is not an opportunity to leverage profit! Until we get past this point--change is impossible. Should we let corporations leverage profit off your children's public education? Your need for sewerage treatment? Roads? How about we outsource America's defense to insurance companies? Some things are simply infrastructure. Medical care should be one of them.

"If you talk about it, even the simplest thing becomes complex and incomprehensible." -Herman Hesse

exactly. there is no value added by the private insurance companies. get insurance out of health care. Expanded and Improved Medicare for All.

The advantage of a large risk pool is that other people's risk taking kind of washes out. Yeah, a skydiving accident will be expensive but since not everybody skydives and even among those who do, few are seriously injured, it's no problem. Such things only become a problem in small risk pools.

thosethingswesay.blogspot.com

Why should a law abiding healthy family in your district be paying a penny for the emergency room visit of a gang member in LA?

For the same reason that a couple with no childrens' taxes help fund schools; for the same reason that people who smoke cigarettes don't pay a separate premium to augment the fire department; for the same reason that people who haven't used police services don't get a break on their property taxes the next year:

THE COMMON GOOD.

We can never risk-qualify every person, and we shouldn't.  I had breast cancer, and so now my health insurance won't cover mammograms 100% because they are diagnostic rather than screening.  That, and about a million other things about insurance companies is a travesty.

Get over the idea that you might just pay into a pool that includes someone who eats every meal at McDonalds and follows it up with a smoke.  Someday you may slip on a bar of soap and get a head injury that will require years of physical therapy.  You may have the bad luck of getting cancer (that you didn't contribute to) and your next insurance company will charge you $500 a month for a $5,000 yearly deductible policy.

Unlike the poster above, I don't think it should be free.  I think it is appropriate for us to contribute to our health care, at least in the form of a co-pay (to discourage abuse), but this system where the insurance companies make profits by denying care or raising costs; this phoney "gate-keeper" system is just wrong.

We can look at every industrialized county in the world and cherry-pick their best parts; we can choose the things that go with out life-style and leave out the rest.  We don't have to reinvent the wheel.  Every doctor's office in the country will be able to use the people who are now spending hours on the phone getting "pre-authorizations," etc, to actually deliver care.  What a concept!

Jan

For the record, my husband is a pathologist and his practice charges the same prices, no matter who is paying, be it Medicare, Medicaid, or private health insurance. I don't know if this is common, but it may vary by specialty.

The congressman doesn't seem to have especially large ties to the medical industry as far as I can tell, although the reporting is a big general. From the Sunlight Foundation:

Steve Kagen

Let's assume that his position is based upon his beliefs and experience as a doctor. This means he has to defend his views using data. There is no point in arguing an industry shill, believing the best in people is the way to go.

--- Policies not Politics
Daily Landscape

Finally, we get to the meat of your proposals.

A single risk pool makes great sense. In fact, it is an essential part of every sensible plan and every nationalized health care delivery system. But to go along with the single risk pool we must have universal participation. Then comes the question of costs. What is the cost of the insurance under this plan? How does one guarantee that the cost will be affordable? Who pays? What about the poor, especially the working poor? How strictly monitored are the presumably private providers of this insurance? Will "market forces" alone ensure efficient service and low cost? I doubt it.

If we have a single, nationwide risk pool, or even regional pools, with guaranteed coverage and a uniform schedule of benefits, what then becomes the rationale for having it adminstered by private companies whose motive will still be profit?

Is there some inherent efficiency in the private sector with which government can not compete? Will the private companies be more transparant? Will the payment schemes and authorization procedures be more fair or less burdensome as regards paperwork, etc? Will administrative costs be less? Will redress if someone feels unfairly treated be any easier? I think the answer to all these questions will be "no."

If private insurers are still involved, as in Germany and to a degree, Ausralia, they will need to be heavily regulated in order for the system to work. In that case it approaches single payer national health care, but with a different name and another level of complexity. Still, it beats what we have now. I still do not understand how having for profit organizations, beholden to shareholders and with executives paid tens of millions (if not hundereds of millions) a year, actually adds value to the system.

The only advantage I could see is in some sort of flexibility, in that it may allow certain plans to offer coverage and benefits beyond the mandated minimums, at additional cost, which some might want to purchase because they want private rooms, exceptonal procedures, etc. But then, under any government plan it should be allowed that those who wish to and can afford it should be able to buy supplemental coverage for these types things and services.

The big questions still remain: 1) is it universal, is everybody covered? 2) Is the coverage truly comprehensive? 3) How are the costs covered, especially for the less fortunate (and please don't say tax credits!)? 4) Are employers still the primary purchasers? 5) If so, what about the unemployed and self employed? 6) How efficient will the administration and implementation be?

Still, it is encouraging to get to some substantive proposal, or even part of a proposal. It just needs to go further.

Thank you, oldtree, for entering this discussion.

My initiative will guarantee UNIVERSAL access to affordable care for every Citizen.

Do you disagree with any of the essential elements within The Declaration of Health ? Open Disclosure ? Unitary Pricing ? A Single Risk Pool - with no discrimination against any Citizen due to pre-existing conditions?

Regarding your reference to removing "health care from congress" - I am the only Member of Congress to have refused the health benefits until every Citizen has the identical coverage as the U.S. Congress. (please read the prior postings please.)

Thanks oldtree. Join us, and we will build a better nation for all of us - with no patient left behind.

I think mjshep pinned it down, in that this is the meat, once  supplemented by clear questions about how insurance will be made affordable and available to (and presumably required of) those not now receiving it. I'm looking forward to hearing it.

Sounds, too, like the idea is that private insurers will either wither away, as Krugman thinks likely under Edwards's plan and Maggie M. thinks hopeful, or at least forced to compete under equal and difficult circumstances. While I favor single payer, I gather the idea is to avoid incrementalism in the sense of coverage but allow it in the sense of systemic makeover, on the grounds that Maggie articulated, that a law putting a huge segment of the American economy out of business will be hard to pass. I'm not entirely sure, but I'm open to that argument.

In addition to mjshep's issues, I hope there will also be an additional part to the congressman's series, on how he sees the proposal as differing from that of the presidential candidates.

John 

http://www.haberarts.com/

If you understand the meaning of "risk pool" you understand that we all would pay for everyone's health care bills. Do you get upset when you purchase term life insurance and don't die in time to collect on it? Same process.

Hoppy in Sacramento

Steve Kagen, don't know if you are still reading. But when you talk about a universal risk pool, are you talking about standards not only for what is covered, but what is paid to providers? If not you end up with adverse selection via low compensation of providers who treat the most expensive patients. For example, if your object is to get rid of kidney patients, pay low fees to nephrologists, and low compensation rates for some of the key tests kidney patients require.

So unless your policy includes minimum fees for providers, you really have not established a single risk pool. Of course a standard policy that includes standard coverage, and standard compensation for providers is reducing private insurers to a very small role, and the question then becomes what exactly they are contributing to the system.

Apropos of such research, FAS just released a CRS research report, "DoesPrice Transparency Improve Market Efficiency? Implications of Empirical Evidence in Other Markets for the Health Sector". I'm working my way through its 51 pages, constantly reminded that while I delight in fine-tuning means of healthcare delivery and workflow, I do have difficulty whether I prefer recovering from a root canal or reading economic analysis. Given adequate narcotics, give me the root canal every time.

From the summary,

Despite these complications, greater price transparency, such as accessibly posted prices, might lead to more efficient outcomes and lower prices. Some markets where lifting advertising restrictions led to lower prices also involved complicated products such as eye care, suggesting that the complex nature of health care may not be a barrier to benefits from price transparency. Internet comparison shopping sites
also appear to have lowered prices for many products. Better price information might
allow patients, either directly or through their physicians, to obtain better value for
health care services. Several states and health insurers now provide online data on hospital costs. These price transparency initiatives, at least so far, have had little visible effect on pricing. Public pressure, which in some cases has caused hospitals to curtail aggressive bill collection tactics, might change hospitals’ and health care providers’ pricing behavior. This report will be updated as events warrant.

--
Howard

*I prefer "benefits manager" to "insurer", because the former includes the companies that administer ERISA self-insurance plans. Admittedly, benefits managers usually start as insurers, but the difference is worth remembering.

**No per-test interpretation required in the laboratory, although there must be, for other than the simplest tests, a systematic quality control program run by a graduate-level specialist.

Charges are meaningless.
They are not costs.
NOR are they what is actually received as payment.

Have to charge same amount by law.
Everybody does.

But what insurance actually pays differs, typically medicaid least; medicare in the middle; and private when it pays at all (after multiple denials, dedictibles etc. more.

Congressman:

Are you suggesting that there be a government run health care option that would run in parallel to private insurance? We sort of have this now in Medicare. One can have "traditional" Medicare or go for one of the private plans that offer a slightly different mix of services.

The problem seems to be that the government is subsidizing the private plans. Liberals tend to see this as a wolf in sheep's clothing. If the plans were really to be in competition they wouldn't get the subsidies. So what is really happening is the Bush admin is getting people used to getting their Medicare via private insurers.

I spent the bulk of my career working for a non-profit. There were limits on what we could do, things that could be "better" done by private firms would raise objections to our unfair advantage, since we didn't have to pay taxes.

I'm sure a similar thing would arise if there really was a government run health option in competition with the private insurers.

I like the transparency, but I think it is a minor issue.

I'm not sure what you mean by paying a different price for services than others. Right now Medicare and private insurers have schedules that they use. These take into account lots of factors, most notably local overhead costs. What would change?

I like the national pool, but it only means something if there are changes in the private insurance industry.

I think where the majority of the commentators differ with you is over the need for a private insurance layer at all. You have not discussed this as yet.

I'll make an argument for you (not necessarily one you would chose, but just to get the ball rolling). I call it the Japanese rice example. Japan subsidizes inefficient family rice growers and has limits on imports. This causes rice to be more expensive than otherwise, but the government feels that the social good of keeping these farmers solvent is worth the economic "inefficiency"

One could make the same argument here. We, as a nation, decide that we are willing to overspend on health care by 30% in order to provide employment to the million people engaged in the insurance and allied industries. A sort of neo-Keynesian argument. Since the costs of health care would be higher than otherwise, those paying for it will need to charge more for the services or products they provide.

So the plumber charges $120 instead of $100 to cover his health insurance. The lawyer charges the plumber $120 instead of $100 to make up for the plumber's overcharge and so on. We have many examples of such deliberate economic inefficiencies already in our society. There are oil depletion allowances, accelerated depreciation, crop subsidies and so on.

It's a form of make work, but as long as everyone agrees to it and the case is presented openly I don't see anything wrong with it. Personally I think a revival of the CCC and WPA might help us with some of our persistent poverty problems.

Practically speaking I can only think of one instance where the government closed down a profitable industry. That was Prohibition. It didn't turn out well. It is now more than 50 years since tobacco was shown to be dangerous and cigarettes are still on the market. So given the present climate I don't think there is a high probability that private insurance will be eliminated. They wield too much political and economic power.

--- Policies not Politics
Daily Landscape

We have federal standards for everything in America - in manufacturing, building construction, OSHA, agriculture, air pollution, etc, BUT we do not have a federal standard for the one thing we all value most - our health.

I have a question related to this comparison.  If we take something like air pollution, or for that matter, mileage standards on cars, we notice that states which wish to impose tougher standards (California, for example) run into all sorts of problems.  I'm remembering that California has been sued by automobile manufacturers for doing this.

So what happens if a more "progressive" region wants to include specific practices or procedures which aren't included in the general pool.  For example, my blue cross covers dentures, but not dental implants which it considers "cosmetic". (I just shelled out $7500.00) for these because I'm too vain to want to put my teeth in a glass by bed at night (note to all, floss regularly).  Perhaps I'm not understanding this well, but I'd like to know if the pool sets a ceiling, a floor, or both, for treatment.

aMike

Thanks aMike for your interest.

You may have missed the earlier postings/conversations, but here is the sequence: First - Openly Disclose all prices for all medical services and products in health care; Second - Every citizen shall be able to purchase the same service at the same price as every other citizen or what I refer to as Unitary Pricing; Third - we need to form a Single Risk Pool, where every citizen is included - 300 million strong - to leverage down prices for all of us; and Fourth - as you will read in the morning's posting, we must make a renewed committment to care for those in need.

Every seller can set their own price, but they must openly disclose the price and charge every customer the same.

Thanks again, aMike, for stopping in.

Well I can tell you that the money spent in hospitals, clinics and offices just getting insurance straight is a huge burden.  Your 5.9% is an absurdly low amount. 

I realize that insurance companies are doing their best to parse these numbers, but if you figure in their profits, (which don't even account for their expenses which are completely wasted funds to start with, since they provide absolutely NO service) and add in all the expenses every single medical provider has to spend on insurance pre-auth's, etc, even 30% starts to look small.

Don't fall for the insurance company take on this.  They are pure snake-oil salesmen who have everything to lose, and the American public has everything to gain.  Insurance companies provide ABSOLUTELY NO SERVICE WHATSOEVER!!!  Their income depends on denying coverage or excluding people who need it!  What other industrialized country would stand for this?  Why should we? 

Jan

Dear Representative Kagen,

I really appreciate your ideas and your willingness to answer questions. But, um... I'm a bit confused as to how people debate in Washington, I guess. Seems like every time somebody asks you a specific question like "is it mandatory?" or "what constitutes a medical procedure?" or "Why do we need private insurers in a system like this?" you just reiterate the points in your main post (transparency, unitary pricing and a single risk pool).

I am absolutely sure that everybody here understands your ideas, as you have explained them with startling clarity. The questions being asked are meant to probe beyond the plan as you've laid it out. It's really great that you're ansering people but a lot of your answers aren't addressing the questions that have been asked.

Sorry to criticize but if you take my advice on this, you've got a good chance of winning support for your plan.

thosethingswesay.blogspot.com

Congressman Kagan. You rather seem to miss the point of my post.

Look,transparency in pricing by providers does nothing to prevent insurance companies driving away customers they don't like - which is supposedly what your "one big risk pool" is supposed to do.

Normally if I need a new doctor, I don't call a doctor and ask what they charge. I get a referral from a current physician and call the person I'm being referred to and *find* *out* *if* *they* *take* *my* *insurance*.

So under your system, as now doctors will set a nominal price. Under your system, as now, insurance companies will actually pay only a portion of that posted price. Depending on the details of how your law is written, doctors will either end up with different payments from different insurance companies, or else be required to charge to everybody the lowest payment they accept from anybody. In the latter instance doctors will have an even stronger incentive than they do now to refuse insurance plans that compensate their specialty at too low a rate. So in either case, if your plan is fully implemented, someone with a more expensive disease will be driven into more expensive insurance plans. Yes all the insurance plans will nominally cover the same treatments. But less expensive plan A will not actually be expected by any kidney specialists or oncologists, or whatever type of provider treats really expensive patients, more expensive plan B will have a few such specialists, but not very many, so a kidney patient on plan B will have to wait a long time for access to a kidney specialist. Really expensive plan C will compensate specialists at a high enough rate that most will accept it.

So even with all your points transparency, consistency, one big risk pool, in practice each insurance plan is really its own risk pool, because insurance companies can drive patients out of particular plants by underpaying certain providers. You complain about this with Medicare, but it actually happens with all insurance plans. There is nothing in your plan to prevent it. In fact in may facilitate it, because the transparency will make it easier for providers to determine which plans they can afford to accept or reject. Remember from the insurers point of view, having certain doctors refuse to accept certain plans is not a bug; it is a feature.

Incidentally, this is just one example. There are all sorts of other ways insurers can drive doctors and patients from one plan to another, to basically make sure that either more expensive patients get driven away from the less expensive plans, and ideally away from their company entirely.

This is know as adverse selection. And if you intend to keep multiple insurers you need to figure out how deal with adverse selection. A law intending to establish one big risk pool, and minimum standards for insurance plans won't necessarily automatically do so.

Here is the bottom line. If it were legal health insurers would locate their offices on the top floor of a twenty story office building with no elevator. To apply for health insurance, or renew your policy annually you would have to walk up those 20 flights of stairs. Anyone who did not make it all the way to the top, or who was more flushed and out of breath when they reached the top than the insurance company thought appropriate would not qualify for insurance. More expensive policies would be available on the tenth floor. Really, really expensive policies might or might not be available on the first floor.

Since this is not legal, insurers use other means to accomplish the same thing. Congressman Kagen, remember your real world experience as a doctor, try to understand that it is quite possible for an insurer to craft a plan that meets every criteria you have named, but would still be impossible for you to accept and stay in business. If an insurer decided your patients were too expensive to treat, your bill leaves great gaping holes they can use to drive your patients out of their less expensive plans.

I'm looking at my 2006 edition of Current Procedural Terminology, the guide to describing medical procedures for medical records, and, yes, reimbursement. While I can't count the number of 5-digit codes, it's a 582-page volume from 00100 "anesthesia for procedures on salivary glands, including biopsy" to 99602 "each additional hour of home infusion/specialty drug administration." CPT doesn't give codes for drugs, which are under the National Stock Number series.

I've also built hospital information systems, although I'm more on the clinical than billing side. Still, for every one of the procedures and drugs in a hospital, they may need to negotiate percentage discounts, or per-item discounts, with every insurer, and sub-plan of each insurer.

When the reimbursement for a given item doesn't cover actual costs, the provider has to decide if they can shift costs to cover it. Sometimes, they will drop a procedure completely if they consistently lose money that can't be recovered.

This discussion, incidentally, hasn't even touched the multiple issues in malpractice. Orlando and Denver hospitals, for example, have closed Level I or Level II trauma centers/ERs, because the premium for neurosurgeons was so high that neurosurgeons were not willing to practice there. Other malpractice-related costs come from doing tests to document things that won't affect care, but would be needed to defend a suit.

In the reverse direction, I've been told not to develop a capability, in a clinical system, that could backtrack to the source of errors. While all agreed that I could improve quality in the particular area, our marketing people found that hospitals would not buy a capability that, under discovery, could produce a roadmap of things to attack. Contrasting with this is mandatory no-fault reporting of near-misses in aviation, which the FAA uses in a continuous process of improving collision avoidance.

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

EXACTLY. THEY DON'T PROVIDE A SERVICE!!! This is what people like Kagen just don't get.

All people like Kagen want to do is keep the gravy train rolling for the insurance companies by fobbing us off with some BS compromise before we get up on our hind legs and DEMAND national health insurance.

What I want to know is exactly how many people Congressman Kagen thinks should die to preserve the profits of health insurance companies.

expatjourno2 -

Your post expresses a certain righteous anger which has unfortunately morphed into counterproductive ad hominum and somewhat vulgar attack.

Other than that, I completely agree with you.

Without universal participation and coverage, and a smart plan to make that coverage affordable to all, all the so-called solutions the Congresssman puts forth simply don't add up to anything approaching an actual remedy.

It's not even that complicated.

Just start by making all children under the age of five eligible for Medicare, see how that goes and make adjustments, gradually raising the age until everyone is covered.

Or just choose any other industrialized country in the world and implement what it has. It'll be a vast improvement on what we have.

National health care has already been invented a few dozen times. If American weren't so pig-headed and arrogant, they'd just adopt one of the many systems around the world that works.

Congressman Kagan,

When you write about this being for 'citizens,' do you mean just citizens, or citizens and legal residents of the United States?

With sentences like "If it's in your body - it's covered, and if you're a citizen - you're IN." it seems like it is limited just to citizens.

In that case, my excellent primary care doctor wouldn't be eligible for the healthcare he provides, because he's a legal resident. Nor would several of the nurses at my local medical center.

Nor would many of the hardworking entrepreneurs, engineers, and computer scientists in Silicon Valley, Redmond, and other research centers of the United States. Not to mention many of the scientists and researchers in universities and labs whose discoveries are driving the R&D economic engine of the US.

I'd assume that their not being mentioned is just an oversight, and that they wouldn't be deliberately excluded.

Expatjourno2

Upon further reflection, you're right.

The Congressman's suggestions do come off as half measures designed to keep insurance companies in business at the cost of our health. I never saw a response to the question of universal participation or how to pay for any of this. Lots of what he did spend time on was nothing more than "free market as the bringer of all good and solver of all problems" crap. We all know it ain't so.

Given the state of our health care system and the weak tea of the Congresman's "solutions" vulgarity is called for. I apologize.

Rated up, but, really, Robert, we've been over what we mean by "free."

You can't keep bring up the same old arguments... 

"Thank God George Bush is our president." -Rudy Giuliani

I've been doing some thinking about this and I came up with an interesting plan for national healthcare...

The single payer system I propose is different from every other single payer system in the world because it would have three levels of public insurance, deductible, basic, and premium. Premium public insurance would be available to everyone at a higher tax rate than basic public insurance. All types of insurance would cover all preexisting conditions, prescription drugs, any and all medically necessary tests or procedures, and cover preventive care (Basic and Premium with no deductible). Premium insurance would have lower copays, not require referrals, and have a few other perks compared to basic insurance. Since the cost of premium insurance would be based on percentage of income, not charged at a flat rate, it will be an option for everyone. Deductible insurance is discussed below. In creating several levels of public insurance we solve the debate over lower taxes vs. more benefits by letting each individual chose for themselves which they prefer.

Insurance would be mandatory. Everyone pays a 3% tax for the public insurance program, and a higher tax rate depending on the plan a person uses. If a person has private insurance the 3% is all they pay, because it's not unlikely they would get dropped by private insurance and begin using a public program, and this would act as a progressive tax on the wealthy who would be more likely to have private insurance. Deregulate private insurance, let them drive themselves out of business, pick their insurance pools, drop people at will, etc. Anyone not covered under private insurance is immediately covered by basic public insurance (or their preselected type of public insurance) at a higher tax rate.

I'd also suggest a progressive 5 - 20% tax on corporations (which is less than many of them pay now) to help finance this program. Except the smallest corporations, and corporations with a low profit margin from this tax completely. This money would be distributed among the 3 plans based on the number of subscribers. Deductions could be offered to employers who directly subsidized their employees healthcare.

Each type of public insurance would set it own tax rate based on it's costs. Premium public insurance would be provided for free (subsidized by the general population) to certain groups, such as children, the elderly, the poor (people currently receiving Medicaid), and people with some serious chronic illnesses (including Cancer during treatment). The 3% base tax would be used to help pay for this.

The 3 Levels of public insurance. All levels cover any & all types of medical treatment required for any disease or condition, including mental health coverage.

1) Deductible insurance

? The government pays for medical expense over a 5% of a person's annual income
? A medical savings account containing the deductible would be required for this to prevent people from walking out on hospital bills
? After deductible is reached you continue paying the deductible rate & get basic healthcare, or pay less 2% more of your income (or the difference between premium and basic healthcare, whichever is less) to get premium care. 1 year after you reach you deductible you start paying the normal rate for either of those plans.

2) Basic Public insurance

? Pick your primary care physician, and get a referral to for specialists
? Copays around 20$ for appointment with you PCP (primary care physician)