The Business Of Health Care
I like Philip's idea about specialized health courts to get us past the casino of malpractice litigation (and the expensive "defensive medicine" that inspires). But the biggest dead idea in health care is that employers still insist on being at the center of our system of providing coverage - -even thought the skyrocketing costs are killing them -- and the fact that people can't get access to group insurance outside the job context means folks stay in jobs (or decide not to start new businesses) because they're afraid of losing coverage . Bad for business, bad for the economy, bad for people. So my question for TPMCafe readers and my colleagues is this: why on earth does business NOT want to get out of the business of being the main health care source for all of us? If they made it their goal to shift much of this financing burden to government, wouldn't they (and we) be better off?
Because ideology trumps logic. Next question.
March 26, 2009 4:18 PM | Reply | Permalink
They know that the only way to provide universal health care to the American people is through the government via a single payer plan of some kind and our business leaders are short-sighted, selfish fools.
March 26, 2009 4:19 PM | Reply | Permalink
Employment-based health insurance = economic stupidity. In a society with our pro-business culture that ought to be enough all by itself if basic common sense played any part whatsoever. It will hardly solve all of the problems with our healthcare non-system. But it is a necessary step to get to sanity.
Where are the opinion leaders who will make what should be the blindingly obvious pro-growth, pro-business case to the public, and the organized business support whose aggressive advocacy is probably necessary both to get enough Democrats to move on this and "encourage" enough Republicans to get the **** out of the way by supporting cloture on the Senate filibuster?
March 26, 2009 4:49 PM | Reply | Permalink
Who says, "employers still insist on being at the center of our system of providing coverage"
March 26, 2009 4:55 PM | Reply | Permalink
Who says, "employers still insist on being at the center of our system of providing coverage"
Really! I wish Mr. Miller would answer your question! This post struck me as very much making a disingenuous "dead idea straw man," and makes me suspect anything else he has written about "dead ideas." I found it pretty outrageously misleading. If most employers wanted to be in health coverage, they would have started a health insurance business and not the business they are in. They do it because it is the system the government created with its tax deduction and because unions thereafter demanded it, which happened because competitors in the labor market offered it because of the tax deduction.
More than a few employers recently are desperately trying ways to get out from under it all by themselves, by doing things like switching employees to health care savings account related programs and the like. I think some labor negotiators could also recount stories about how hard some are trying to get out of it. A couple of blocks away from me, there's been a strike going on at a large commercial bakery since last summer, regarding dropping health coverage. There is apparently a sufficient number of scabs who don't expect employer provided coverage keeping the place running. That they are currently often trying to get out from under it is indeed part and parcel of the whole messed up system.
March 27, 2009 12:23 PM | Reply | Permalink
I read the book and thought it was interesting, but like all books of the genre, it simply does not address the fact that the system itself is broken and needs mending.
It doesn't matter in the least if we think of new ways to bandage the patient if the patient is hemorraging, it just postpones the inevitable. We can rethink the health care system until kingdom come, but since we have no true and transparent accounting, no way to gauge the efficacies of any system, then what is the point? We don't know how good or bad the system is performing because we have no true costs as to how much the system is costing now.
We should rethink social security? I'd like to know why - is because there is not enough money in the system, because we are paying too much in benefits, are we not taxing enough to sustain it, will the burden truly be 50Trillion in arrears in 75 years, or is that 50Trillion in arrears if we do nothing over the next 75 years?
Should school boards be eliminated and schools funded and administered by the federal government? What makes that a good idea? Schools are subject now to federal standards and it doesn't seem to be working any kind of magic reform that we can meaningfully measure, nor are there any comprehensive studies that would demonstrate how any kind of reform works.
Frankly, I didn't find any of his ideas dead as much as they're being murdered by people misidentifying the ideas themselves. Local school control isn't a dead idea, it is a dying idea because people don't care or even know they do have local control. The idea of old age pensions is a good idea and the social security program is very successful. Is the health care system broken? Who knows, we have no idea as to the true costs of health care in the United States, mainly because no one wants to sit down and do the heavylifting of figuring it out. Add a new court system to a court system already overflowing with work? Why not repair the court system that we have and allow the people to continue to appeal to the gevernment for a redress of grievances?
How can we know what ideas are dead when no one knows what the ideas are in the first place? It's as if an Andy Hardy movie is on a continuous loop in this country where we all become enthusiastic about putting on a show in the barn and by the end of the movie we don't even remember why we put on the show. (Although the barn looks like a million bucks when the show is over.)
March 27, 2009 1:03 PM | Reply | Permalink
Bev,
Very strange, after I read your reply, I went to an appointment in the Washington Heights section of New York. It is a heavily Hispanic neighborhood north of Harlem, working class and immigrants mixed in with Columbia students. There was a very noisy and angry protest there in front of little P.S. 128 (an elementary school about 100 parents with their kids, and a megaphone, handmade signs (in English), chanting (in Spanish) and marching in a circle, stopping for short speeches (in Spanish, with hoots and cheers) and marching and chanting again.
It took me a while to figure out what they were protesting. It is that the New York school system wants to put a High School Detention Center across the street, where problematic high schoolers (from the upper Manhattan area, basically from the wider 'hood, not from allover the city) will attend classes. They don't want it there because they think it will make their elementary kids less safe. The signs said things like "keep our kids safe!" I checked on the net, found that they have been at it at least since March, so they are very passionate.
Yes it is NIMBY-ism, working class style.
And that got me thinking, doesn't "local control" combined with "community activism" lead to things like NIMBY-ism? How is society to come up with innovative solutions to things, like dealing with wayward youth, if the majority in a community doesn't want to deal with the problem at all? Where does innovation to solve problems really come from? I wonder how helpful "democracy" without leadership and without a wider spread is to breaking out of the old ways of doing things. (To put it in an entirely different context, what kind of innovation would you get out of a "democracy" formed only of Israelis in the settlements?)
March 27, 2009 6:40 PM | Reply | Permalink
correction: they have been at it least since mid-March.
March 27, 2009 6:46 PM | Reply | Permalink
I think it's lack of control and lack of democracy that leads to NIMBYism. Here we have a group of people who are powerless to control the school system, who have not been part of the process, who have no say and no doubt have no more information than we do at this point, organizing a futile (which it almost always is) protest against a process that began quite a long time before it came to site selection.
In my opinion, school boards in big cities are managing areas that are too big, a better answer would be to break up the district and manage it with more school boards who are answerable to local neighborhoods, whose members are local neighbors and who are accessable to parents and students. It takes a Herculean effort to get many parents involved in the school system (for whatever reason) so taking away any control is probably the worst thing that can be done. Good schools, rich or poor, have a very high level of parental involvement in those schools.
Perhaps instead of taking more and more control away from people, we might change the idea that people do not have control, they do not have a part in it and they have no responsibility to help.
People in this country have no part in what is happening to us. We're often helpless to effect change, we're lied to so much that we don't know whom we can believe, the people we elect to office have no responsibility to us but to a monied constituency who paid for the campaign - the solution isn't to rethink how we think about the system, the solution is to fix the system itself. No one wants to hear that though, they would rather discuss ideas and how we think and how we should think and they want us to forget that they have as much a vested interest in keeping the system afloat as those who run it.
March 28, 2009 11:13 AM | Reply | Permalink
Employee retention, especially for large corporations.
The current system makes it prohibitively expensive for people to leave their employers and to compete with them as entrepreneurs or as independent contractors. Health care is, in effect, a shackle. A costly shackle but one that our business leaders have decided is worth the price.
March 26, 2009 5:36 PM | Reply | Permalink
Another element may be control issues in workman's compensation negotiations. If the health care providers are no longer contracted to the company, then whatever control corporations can exert in such cases goes away.
March 26, 2009 8:58 PM | Reply | Permalink
Good pointed
March 26, 2009 9:02 PM | Reply | Permalink
I guess I don't blame employers for being cautious until they see the fine print. Unless the plan is truly universal, we could wind up further undermining employer paid plans without the commitment necessary to sustain providing healthcare under a different system. Employers are wondering what it's going to cost them and we should be too. We need to be sure we understand who the winners and losers are going to be particularly since the lower end of the middle class seems to be doing most of the losing these days.
March 26, 2009 5:59 PM | Reply | Permalink
Joseph Schumpeter talked about how capitalism calls for creative destruction - basically new businesses arise while old businesses fall by the wayside. I think for this creative destruction to be workable there has to be a safety net of which universal health care with a single payer would be a major component otherwise people are going to dig in their heels at this creative destruction. Why is there is there such a rejection of universal health care? I think the opinion leaders of the rightwing are basically followers of Herbert
Spencer. The weak must fall by the wayside so the strong can march ahead. The problem with universal health care for the rightwing think tankers, who business leaders follow, is that the poor and disadvantaged are going to be assisted and that can't be allowed to happen as the poor and the disadvantaged must be allowed to be trampled over. The fact that that this doesn't make any econonmic sense is irrelevant. Univeral health care would be cheaper and more effective. It is just policy among the rightwing 'big brains' that the downtrowden should be ground into the dirt even if doing so doesn't make economic sense. It fits in with their 'values'.
March 26, 2009 6:11 PM | Reply | Permalink
That makes the most sense.
March 27, 2009 11:13 AM | Reply | Permalink
It's a two-edged sword that gets used twice against the employee/citizen. First, many businesses use health care as a carrot, while reducing wages and other benefits. Second, large insurers have all the incentive in the world to practice bias against individuals who aren't under a large group insurance umbrella.
March 26, 2009 6:11 PM | Reply | Permalink
That's right.
March 27, 2009 5:34 PM | Reply | Permalink
I(f you had single payer the problem is solved by capping lawsuits and increasing penalties on doctors through medical boards. Since the government is the payer in a single payer system and the service being provided as public good it would make sense for participants to want to cap the lawsuits. ie: You are the payer as a taxpayer - how much do you want to sue yourself for? Not much to keep costs low. But systems like that do have to seriously increase penalties on negligence - and both in the case of negligence and in the case accidents (they do happen through no fault of providers at times) would not become get rich schemes either. Also, by capping the lawsuits the government could cover the costs of it as the insurer, providing even more savings.
I am sure you get the basics of what I am talking about since this actually works, right now, in other countries. (Go figure?)
Would you give up the right to be able to sue for unlimited amounts of cash to be able to get affordable care? Would doctors be willing to take harsher board penalties if they knew insurance would be no longer an issue? (And insurance costs for Doctors' practices is a serious issue)
March 26, 2009 7:06 PM | Reply | Permalink
It's much simpler than that. If you have single payer, in most cases you dramatically reduce or eliminate the cost of future medical care from the claim for future damages.
Malpractice lawsuits are already capped in most states, sometimes at very low levels, for non-economic ("pain and suffering") damages. Capping people's economic damages - their actual out-of-pocket expenses - is a hard sell.
March 26, 2009 9:04 PM | Reply | Permalink
I did not know they had caps already. In Connecticut, private practice insurance cost is driving some specialists (OBGYN is one of them, I think? There are others.) out of state.
March 27, 2009 8:19 AM | Reply | Permalink
Doctors flooding to other states? That's what "they" say. The truth tends to be more complicated.
But "they" say that about Michigan as well, and Michigan has long had malpractice reforms favored by the insurance industry, including damages caps. Consider again that damages caps relate to non-economic damages. An Obstetrician, facing liability for a case in which a baby has suffered catastrophic injury, is looking at an economic damages claim for a lifetime of care - nursing costs, medical equipment, doctor bills, etc. You cap that and somebody else gets stuck with the tab - the child, the child's family, the taxpayer.... In nations where the taxpayer is already picking up the lion's share of medical costs through a national health plan, the claim for damages is reduced.
Is it more fair for the taxpayer to subsidize the costs necessitated by the doctor's injury, or for the doctor to be directly liable? There are a lot of public policy issues that would factor into a debate of that question. But I think most would agree, either is more fair than sticking the innocent victim with the bill (which will usually mean the taxpayers end up sharing the cost anyway, through Medicare, with the child and child's family struggling to cover the shortfall.)
March 27, 2009 10:42 AM | Reply | Permalink
I'd say the better way to phrase this question is why don't employers get behind government take over of the responsibility for financing insurance coverage for employees. They'd love to get out of covering employees in general I think, but their very leery of a government solution. The reason, I'd hazard to guess is they'd prefer to be in control of the situation and the attendant obligations. This way they can still implement cost cutting measures such as increasing copays, deductibles and the employee share of premiums, on top of negotiating with insurance carriers. If there's a government solution, they may get slapped with an employer mandate (their biggest nightmare since then they'd be on the hook for certain kinds of benefit packages with limited ability to restrain costs or alter the benefits structure). They probably feel the same way about a payroll tax split between employer and employee. I'd say it's mostly about autonomy and control. Plus there's just a general leeriness of being seen to endorse a public sector role here when they object so strenuously in other arenas. I wouldn't sit around waiting for business to rally around single payer health care, a pay or play mandate, or any kind of publicly financed system/reform.
March 26, 2009 8:12 PM | Reply | Permalink
.
Why don't you get out . . .
. . . and ask the employers this question?
Hello my fellow Angeleno.
Please understand Mr. Miller that is not a snide remark. It's a plain and simple request. Then you can get back to us with the answers.
But just off the top of my old gray head, I'd venture to say that it's much easier to be distracted by ranting and pointing of fingers than it is to develop and foster bold new ideas.
And I would really like a response from you in this thread to see if you're truly interested in our responses. That'll verify if you're really interested in us, the "TPMCafe readers."
I prefer Cafe member. I -- like many here have been reading and blogging here since 2005.
By the way, I did read your book, The Two Percent Solution. $280 billion is a bunch of bucks.
Thanks for coming.
~OGD~
March 26, 2009 11:29 PM | Reply | Permalink
I'm not sure that's a 100% accurate assessment. The only reason our company handled health benefits was because nobody else would if we didn't ... and we wanted insurance for ourselves and our team. It's something we were proud of doing, but not something we would have chosen.
We were small enough so that it was horrible. Almost every year they would jack the rates and send us back into the market. We were spending a full quarter or more each time just pricing plans and doing the HR stuff. Ultimately, this overhead led us to contract with a staff-leasing company that finally provided stability. So in reality, we fixed our problems by offloading them on someone else - and it wasn't cheap.
I think you might be overstating the love small business owners have for being saddled with this responsibility.
March 27, 2009 12:41 AM | Reply | Permalink
Rising health care costs are a convenient excuse for employers to not offer cash raises. Just tell people how much their health insurance cost went up, and they suddenly don't demand so much. As long as the health insurance premium increases by less than whatever cash raises the employees would've demanded otherwise, employers are effectively pocketing the difference.
Say I pay my employees a $60,000 salary plus $15,000 of health insurance. Say their insurance premium goes up 10%. I tell them I'm sorry guys but your premiums went up 10 percent! I've done all I can to hold the line, but I'm afraid I can't afford any cost of living increases.
So the $1500 I shell out for their increased premiums only amounts to a 2% raise. Meanwhile, my workers are grumbling at the health insurance company while I look like the good guy. I say I got off pretty cheap because otherwise, I would've had to fork over 3 percent raises just to keep anyone from quitting.
March 27, 2009 4:28 AM | Reply | Permalink
There you go. Drop health benefits, the workers might demand a payraise.
March 27, 2009 11:31 AM | Reply | Permalink
The book promotion tour continues, but that's fine. The question of why businesses don't want to get out of health-care is a little misleading, as others pointed out already. They do want to get it of health-care. We should be asking them why they don't. And the answer is simple - again, as already alluded to.
Health coverage by en employer is considered a benefit. A perk. Business will only get out of it if they have confidence that ALL business get out of it. As soon as you have some companies that provide it and some that don't, you will see talent migrating to those who provide.
March 27, 2009 9:08 AM | Reply | Permalink
Remember how we got here. During WW2 employees were tough to find and jobs were plentiful. Employers used Health Care Coverage to recruit and retain employees and the government policy helped them out. It makes no sense in today's world.
As a former small business owner this system is especially erogenous - cost way too much so employers go without. It also is way too burdensome on the self employed. I don't understand why Congress can't see this? I guess it's all about money.
March 27, 2009 9:26 AM | Reply | Permalink
Of course it is about the money. They talk about creating jobs for Americans, then tax these jobs with payroll tax.
March 27, 2009 10:34 AM | Reply | Permalink
Now here is another idea that should be dead, but is continually resuscitated by the press - malpractice lawsuits are akin to casino gambling.
The average trial win rate in medical malpractice suits for death and permanent injury is 27%, compared to 52% in other tort cases. The average award is 432,000. An average of 87,000 claims are filed every year out of a population of 380,000,000. It is estimated that 195,000 people die each year because of hospital negligence or error. 400,000 are injured because of maladministered drugs.
How can we gauge whether an idea is dead or a new idea will work without correct information? We read or hear something and we just assume that it is correct without first researching and checking that information. So 86,000 claims are filed each year out or a population of 380,000,000 and we need a new court system? Why don't we first address the problem at its root - error and malpractice are preventable. Simple handwashing is a start and costs one hell of a lot less than a new court system, just as double checking drug administration is so much easier. Sanitizing rooms, including operating rooms will do more to save lives, as Florence Nightingale pointed out in 1850, than a new court system. Isn't saving lives the idea?
Everyone loves to propose new ideas but no one wants to do the heavy lifting of reforming the system itself.
March 27, 2009 11:28 AM | Reply | Permalink
Please help us put pressure on Congress to pass single payer health care by joining our voting bloc at http://www.votingbloc.org/Health_Bloc.php
March 27, 2009 12:22 PM | Reply | Permalink
Unfortunately, Congress isn't going to do any such thing for the foreseeable future unless you can somehow convince this guy who seems to have made up his mind against it:
REMARKS BY THE PRESIDENT AT "OPEN FOR QUESTIONS" TOWN HALL
(Editor's Note: This transcript was provided by the White House on March 25, 2009.):
Don't you think that to further your goal eventually becoming a reality sooner rather than later, right now reality is: best to make sure that what they do end up passing has a public option to compete with the private plans, rather than ending up with nothing towards the goal at all?
March 27, 2009 12:50 PM | Reply | Permalink
okay, I am a liberal and a lawyer and generally I cringe when someone says "tort reform." but then I had to get a job. in the toxic tort industry. Blech!
but really, here's the truth: it's all a big freaking racket. not so bright and hard working plaintiffs attorneys round up plaintiffs and sue a million companies without doing any homework. inevitably, it's cheaper for most of the companies to settle than to pay lawyers to defend. so plaintiff lawyers get their payday, and defense lawyers get a job, and all the lawyers are happy and the plaitiff is: (1) screwed out of the big payday she deserves; or (2) really happy to get a bunch of money for getting sick and old after smoking 2 packs a day for 50 years. Yay!
the really sad part of the whole thing is that the real culprits go bankrupt really quick, such that real plaintiffs with real lawsuits don't have anyone to sue anymore. and they can't find a decent plaintiff lawyer who will do more than press mild extortion on a complacent defense bar.
and maybe none of this would be a problem in the first instance if we had decent health care for sick old people.
March 27, 2009 3:57 PM | Reply | Permalink
No offense - you sound like somebody who has never represented an injured client, and really knows nothing about the subject.
What type of law do you practice?
April 2, 2009 9:53 AM | Reply | Permalink
Who says, "employers still insist on being at the center of our system of providing coverage"
Because there are huge profit-making enterprises serving those employers. Blue Cross/Blue Shield--what's it gonna do if people don't need its price-gouged products anymore?
There are office buildings stuffed with people whose job it is to make profit for HCA or BCBS or any of the other acronymic or euphemistically named (LoveLifeCo! HealthHealHelp of America!) health-insurance corporations.
No one whose "we don't cover that, sorry, or that either--and no to the other procedure as well" desk job is affected by national health insurance wants to make a change.
March 29, 2009 9:45 AM | Reply | Permalink
Are you uninsured in America? You should check out the website http://UninsuredAmerica.blogspot.com - John Mayer, California
April 13, 2009 6:04 AM | Reply | Permalink