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We Need to Design Health Care Reform That Puts Patients Before Profits

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Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#161

Post by kerkeslager »

tptacek wrote: post #139
kerkeslager wrote: post #131

Earlier quoted context omitted.

If we look at the worldwide market, health insurance CEOs salaries stand out even more starkly.

It's not clear to me what CEO salaries have to do with anything. Zero them out, and how much money has the American family saved? I haven't done the math, but I presume it's pennies, if that.

To do that math effectively, you'd have to look at which parts of a health insurance company's structure are essentially waste caused by health insurance being private, and zero all that, and I'd presume that's a large portion of premiums. The CEOs are just the most obvious example.

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#162

Post by kerkeslager »

shsjxjbsbs wrote: post #128
kerkeslager wrote: post #32

Earlier quoted context omitted.

With my skillset (software engineer) I can easily pull low six figures. And I'm confident that doctors provide more value than I do. I'm pretty sure I've never saved anyone's life. So I have zero problem paying doctors 2 or 3 times my pay, which is about what you're saying they get paid. Health insurance CEOs make, in some cases, literally hundreds of times my salary, while literally killing people for profit. I'm go…

There are way more doctors than CEOs. If you’re gonna claim that CEO pay is a more significant factor than doctor pay you should do the math on that.

I'm saying that a doctor's contribution to society is a lot more than a health insurance CEO's and yet that is not reflected in their salary.

It wouldn't surprise me if doctor pay was a larger factor in healthcare costs. But doctor salaries are an inherent cost of healthcare, and while we can certainly lower their salaries, it's not entirely clear to me what a fair salary would be.

Health insurance CEOs, and indeed most of what a health insurance company does, are not only not inherent costs, but active blights on the healthcare system. A fair salary would be zero, with fines for literally killing people. So they're much higher priorities than doctors for the axe.

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#163

Post by jcranberry »

Zelphyr wrote: post #119
jcranberry wrote: post #104

Earlier quoted context omitted.

Are you sure that we should be going after hospitals rather than the insurance companies? I've been told by a doctor friend of mine that the price of treatment in hospitals are often affected by how much insurers are willing to pay. They bill an insurance company X, the insurance company only a fraction of that and the hospitals just have to deal with it. So suppose they get more leverage and they increase how much t…

Except, as I understand it, it's more like this: Hospital bills Insurance Company $XXX,XXX.XX and Insurance Company says, "No, we'll only pay $XX,XXX.XX" so Hospital pays it. What's not mentioned is that it only cost Hospital $XXX.XX for the procedure so while they're complaining that the insurance companies only pay them a fraction of what they billed for the procedure, they're still making a massive margin. That's…

That would imply hospitals are a very profitable business. However, only 18% of hospitals are for profit in the first place, and nearly a hundred hospitals (mostly rural) have closed in the last year. The operating margin of NFP hospitals in 2017 was 1.7%. The average operating margin of the S&P 500 was 10.7%. And id bet insurance companies are looking better than hospitals as well.

Plus hospitals cant just charge for procedures at cost. There are revenue sinks hospitals have no choice to deal with. If someone without insurance and no source of income gets hurt and has to go the ICU, it can cost upwards of 10k a day. Who pays the bill? The hospital. And they cant discharge such a patient until they're healthy.

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#164

Post by tptacek »

thaumaturgy wrote: post #158
tptacek wrote: post #130

Earlier quoted context omitted.

You're using "account for their costs" in a different sense than I think Rayiner meant. When Sanders "accounts for his costs", he means that they've added up the total projected costs of their plan and then accounted for it with tax revenue. That's fine, but it doesn't address the fundamental problem of US health care costs, which is --- regardless of "who pays" --- "why does it cost so fucking much". If all we do is…

> That's fine, but it doesn't address the fundamental problem of US health care costs, which is --- regardless of "who pays" --- "why does it cost so fucking much". A doctor named David Belk set out to find answers to this question. He presented what he found at http://truecostofhealthcare.org/ . You can start with the introduction ( http://truecostofhealthcare.org/introduction/ ) or skip straight to the conclusion (…

I don't have an opinion about profit margins in the US health care system and am receptive to arguments that profits in the system are themselves exorbitant (it's Rayiner who consistently argues for perspective about comparative profits; ironically, Rayiner supports a national health plan, and I oppose it).

My argument is orthogonal: it's that there is a payer side of the system and a provider side, and the national discussion about health care is focused almost entirely on the payer side, with the exception of prescription drugs, which are not the major driver of health costs. If the answer to this problem is "nationalize the profit-seekers", OK, I can hear that argument out --- but it has to be about doctors and hospitals and long-term care facilities, not about "greedy insurance companies".

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#165

Post by kerkeslager »

TheOtherHobbes wrote: post #76
kerkeslager wrote: post #28

Earlier quoted context omitted.

What about chronic diseases that require frequent treatment?

What about them? The point of collaborative health care is that risks, benefits, and costs are spread out, to everyone's benefit. There is no magic market finger threatening to push you into bankruptcy and/or an early grave just because cancer picked you instead of someone else, and your co-pays are higher than you can afford. Ditto for chronic congenital conditions. It's all the same. Yes, you're probably contributi…

It seems you've interpreted my comment as being against public healthcare, when in fact I am rabidly for public healthcare.

I was pointing out that a part-private, part-public solution still doesn't really handle medical care well. We need a fully-public healthcare system.

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#166

Post by TuringNYC »

kerkeslager wrote: post #159
TuringNYC wrote: post #83

Earlier quoted context omitted.

>> With my skillset (software engineer) I can easily pull low six figures. And I'm confident that doctors provide more value than I do. I'm pretty sure I've never saved anyone's life. So I have zero problem paying doctors 2 or 3 times my pay, which is about what you're saying they get paid. There are many problems comparing software pay to healthcare pay. - A large portion of software jobs are in the Bay Area, you ar…

Okay. So maybe the multiplier of my salary to get a doctor's salary is 5 or 6 instead of 2 or 3. The multiplier of my salary to get a health insurance CEO's salary is also now, what, 200 or 300 instead of 100?

Actually, my point was the opposite -- I was noting that software engineers dont make enough compared to doctors and deserve more given the major SWE downsides:

- SWE: Much of the premium might be CoL premium

- SWE: There is a downward slope on earning potential

- SWE: No cartel and constantly expanding pool of workers

I'd argue that SWEs should make more given all these negative aspects.

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#167

Post by thaumasiotes »

tptacek wrote: post #90
c0nducktr wrote: post #86

Earlier quoted context omitted.

I'd wager a nonprofit Japanese restaurant could have provided your meal at a lower cost.

How? Why doesn't anyone open a nonprofit restaurant and outcompete the for-profit ones?

Clearly, because profit-seeking infiltrators would sneak in and corrupt the whole affair.

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#168

Post by tptacek »

kerkeslager wrote: post #161
tptacek wrote: post #139

Earlier quoted context omitted.

It's not clear to me what CEO salaries have to do with anything. Zero them out, and how much money has the American family saved? I haven't done the math, but I presume it's pennies, if that.

To do that math effectively, you'd have to look at which parts of a health insurance company's structure are essentially waste caused by health insurance being private, and zero all that, and I'd presume that's a large portion of premiums. The CEOs are just the most obvious example.

I don't have to do very complicated math to add up (or even wildly overestimate) compensation for CEOs, zero them, and see what that saves. I don't like that CEOs make that much money either, but why would I waste time on them? They're not the problem.

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#169

Post by aaavl2821 »

jcranberry wrote: post #163
Zelphyr wrote: post #119

Earlier quoted context omitted.

Except, as I understand it, it's more like this: Hospital bills Insurance Company $XXX,XXX.XX and Insurance Company says, "No, we'll only pay $XX,XXX.XX" so Hospital pays it. What's not mentioned is that it only cost Hospital $XXX.XX for the procedure so while they're complaining that the insurance companies only pay them a fraction of what they billed for the procedure, they're still making a massive margin. That's…

That would imply hospitals are a very profitable business. However, only 18% of hospitals are for profit in the first place, and nearly a hundred hospitals (mostly rural) have closed in the last year. The operating margin of NFP hospitals in 2017 was 1.7%. The average operating margin of the S&P 500 was 10.7%. And id bet insurance companies are looking better than hospitals as well. Plus hospitals cant just charge fo…

The dynamics between hospitals and payers depend on market and negotiating leverage. A small hospital in a competitive market will struggle, while a large hospital system in an unsaturated market will do very well.

Are hospital failures due to payers, or due to competition from other hospitals? If a payer is getting squeezed by a big hospital system, it may in turn squeeze a smaller hospital or provider.

One of the biggest for profit hospital chains, HCA, generates 20-25% EBITDA margins. Many non profits are very powerful and make lots of money, they just spend more on salaries so their net income is lower. But yes many hospitals do struggle.

Insurance companies must spend 80% of their premium revenue on healthcare services. So their profits are in effect capped.

Re: We Need to Design Health Care Reform That Puts Patients Before Profits

#170

Post by CharlesColeman »

tptacek wrote: post #66

The problem with US health care is that it costs too much. The elephant in the room in US health care costs is inefficiency on the provider side. Payer-side reforms have limited impact, because contrary to rhetoric from both sides of the debate, we could probably zero out administrative costs entirely and still deliver little more than a grocery store discount to American consumers. However we structure payment, we'r…

> The elephant in the room in US health care costs is inefficiency on the provider side. Payer-side reforms have limited impact, because contrary to rhetoric from both sides of the debate, we could probably zero out administrative costs entirely and still deliver little more than a grocery store discount to American consumers.

Certain kinds of payer-side reforms (e.g. single payer) could allow the providers to be bullied by the payer until they're forced to get their acts together.

The only thing that couldn't really address is doctor shortages, but that can (slowly) be addressed by a change in medical education regulation. Right now it's basically controlled by the AMA (basically the doctor's union), which limits the supply of seats to keep graduate salaries up.

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