Price fixing does not solve cost problems
posted at 9:30 am on October 21, 2009 by Ed Morrissey
Perhaps the leading economists of the US could convene a special remedial course for Congress to explain the difference between price and costs. One might have expected the political class to have learned that difference from the disastrous US effort to fix prices and wages in the 1970s during Richard Nixon’s term in office, but apparently not. Democrats hailed their new, revamped House version of ObamaCare and its $871 billion price tag, based on forcing more providers into existing Medicare reimbursement rates. They claim that this will keep costs low, which is absolutely incorrect (emphases mine):
House leaders have cut the cost of their health-care overhaul to around $871 billion over the next decade, Democratic sources said Tuesday night, and were working to line up votes for the package with the aim of bringing it before the full House early next month.
The $871 billion estimate — well under the $900 billion limit set by President Obama — is the latest of several versions scored by congressional budget analysts, according to a Democratic aide, speaking on condition of anonymity to discuss private talks. The measure would include a government-run insurance plan that pays providers at rates tied to Medicare, the aide added. That so-called “robust” public option is preferred by liberals because it would save the government money and could force private insurers to lower their own reimbursement rates, driving down the cost of health care overall.
But the idea is opposed by many conservative Democrats from rural areas, where Medicare rates are well below the national average. A new insurance plan that paid such low rates would be devastating to their communities financially, these Democrats say. Instead, they argue that any public plan should negotiate rates directly with providers, as private plans do.
Fixing prices does not lower costs. Let me repeat that: fixing prices does not lower costs. “Costs” are borne by providers, who get reimbursed by either consumers (in a rational market) or by third parties (American health care) for their goods and/or services. In a competitive market, providers have to set their prices at an attractive level in order to get business without missing out on profit opportunities, but their prices have to cover their costs — or they go out of business.
Not coincidentally, the latter is what happens when price-fixing is used. When government fixes the price of goods and services, it usually does so to mask costs, not reduce them. This is what Medicare has done for years, which is why doctors avoid Medicare patients now. When the fixed price becomes less than the actual cost to provide the service, the provider is forced out of business.
And what Medicare reimbursement schedule does the House use to show those cost savings, anyway? Would that be the schedule that will start dramatically cutting reimbursements over the next few years? Or will it use the Stabenow bill in the Senate that would eliminate those cuts, and which the Senate also ignored when calculating the cost of the Baucus bill?
Blowback
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Diagnoses and treats diseases of human body, using x-ray and radioactive substances: Examines internal structures and functions of organ systems, making diagnoses after correlation of x-ray findings with other examinations and tests. Treats benign and malignant internal and external growths by exposure to radiation from x-rays, high energy sources, and natural and manmade radioisotopes directed at or implanted in affected areas of body. Administers radiopaque substances by injection, orally, or as enemas to render internal structures and organs visible on x-ray films or fluoroscopic screens. May specialize in diagnostic radiology or radiation oncology. May diagnose and treat diseases of human body, using radioactive substances, and be certified in Nuclear Radiology or Nuclear Medicine.
Yes, you can do this from India if you want to treat people shoddily and lower our standard of care
–You can offshore the reading and have another doctor or nurse do the rest of the job. If you were in business, you wouldn’t want someone costing you $500/hour doing a job that can be done by someone costing you $200/hour or $50/hour.
Jimbo3 on October 21, 2009 at 11:33 AM
this is ridiculous. you think the government is going to ‘improve competition’ it isn’t. you think government is going to improve healthcare..just the opposite many more people will suffer and die needlessly.
and you think you are being ‘compassionate’
but its really about power over other people.
right4life on October 21, 2009 at 11:34 AM
It doesn’t matter what you call it, it still doesn’t work, and that’s the whole point of the posting.
Juno77 on October 21, 2009 at 11:34 AM
So what about Medicare Advantage plans, Juno77?
Jimbo3 on October 21, 2009 at 11:35 AM
Democracy is preferable to other systems; doesn’t mean it’s perfect. Specifically doesn’t mean that bad policies are reversible. See Public Choice Theory and Social Choice Theory.
I won’t cast aspersions on your motivations here, but it seems obvious to me that the Ds just want this thing passed because they know no one will ever be able to uproot it once that happens — and that won’t necessarily have a thing to do with whether it’s meeting the health needs of Americans. It gives them a set of avenues into personal behaviors, and a brand-new cudgel to use on political opponents (“He wants to take your health care away!”), and they covet both those things. It’s political poison, and there are alternatives left unexplored.
DrSteve on October 21, 2009 at 11:35 AM
Jimbo3 on October 21, 2009 at 11:32 AM
They have, but not nearly to the extent of UK hospitals.
Our standards of care and hospital cleanliness requirements will have to be adjusted down as reimbursement is cut. You can’t get something for nothing, despite a Congressional mandate.
NoDonkey on October 21, 2009 at 11:35 AM
If you think you have choice in the insurance market right now raise your hand. Anyone?
If you think you WILL have choice in the insurance market with a public option introduced raise your hand. Anyone?
Do you want choice? Do you want competition for your business? I have the perfect solution.
1. Do away with employer-insurance relationships. Insurance companies do not compete for your business, they compete for the business of businesses who offer health insurance as a benefit. Offer it to every single person anywhere in the country, the risk pools expand, reserve funds rise, and premiums go down.
2. Do away with insurance covering basic care. Can you imagine how expensive your car insurance would be if they paid for flat tires, oil changes, tune-up, etc? You would never know the cost until your EOB came in. You’d only be able to go to those shops who accept your insurance company, even for a $20 oil change, UNLESS, you paid out of pocket. Oh wait, paying for services received is strictly forbidden in the Medical Industry.
3. Eliminate the middle man. Much of the cost of care is tied into overhead required to push paperwork and meet standards set by Medicare/Insurance companies. Not to mention the businesses that just do 3rd party billing.
4. Tort Reform, duh.
Of course, I’m a racist, so you can’t agree with me lest you be a racist too.
uknowmorethanme on October 21, 2009 at 11:36 AM
I don’t see how that’s relevant to whether a private company can stay in business alongside a govt run plan.
Yep that’s actually my biggest concern, especially since Obama said at some point that the “ultimate goal” was single payer, didn’t he?
That being said, providing a cheap, govt run plan which will give people some kind of coverage (even if it’s bad) is a good idea, and it might make insurance companies more competitive with each other as well, and that’s a good thing.
Now, I’d have a problem if they were *proposing* single payer, but that’s not in the bill. If it were in the bill, I’d have a problem. If they say, “Well eventually this will lead to single payer,” I’m concerned but that’s another fight for another day.
Proud Rino on October 21, 2009 at 11:37 AM
These people are idiots
workingforpigs on October 21, 2009 at 11:37 AM
You mean like what Canada does to premature babies it can’t keep alive? Or like British citizens who come over here for cancer treatments, etc? You know, like how the places that have largely government run health care systems do?
bds1976 on October 21, 2009 at 11:39 AM
No, it *does* matter what you call it, because the whole argument is premised on the the action of having this plan being labeled “price fixing.” It’s not price fixing. It’s a “government option.” Has that ever worked? Depends on what you mean by “worked,” but I’d say that having public schools is a pretty good thing, and it hasn’t hindered the existence of private schools.
Proud Rino on October 21, 2009 at 11:39 AM
just amazing stupidity.
right4life on October 21, 2009 at 11:39 AM
more amazing stupidity…obviously it has hindered the existence of private schools…people have their money taken from them in the form of taxes, so they don’t have the money to send their kids to private schools because they are FORCED to subsidise public schools….and public schools are a disaster…
you are pathetically ignorant.
right4life on October 21, 2009 at 11:41 AM
“Reading the MRI/X-ray” is the easiest part of the job.
Radiologists get paid the big bucks because they perform THIS correctly:
Treats benign and malignant internal and external growths by exposure to radiation from x-rays, high energy sources, and natural and manmade radioisotopes directed at or implanted in affected areas of body. Administers radiopaque substances by injection, orally, or as enemas to render internal structures and organs visible on x-ray films or fluoroscopic screens
But where else do you suggest we cut corners? And since your Democrats won’t impose tort reform (which would save more than all of the Democrat’s hare brained ideas combined), don’t you see how what hospitals save will be paid out to lawyers and malpractice insurance premiums (which will skyrocket)?
NoDonkey on October 21, 2009 at 11:41 AM
My point about ideology goes to (1) whether the reforms are being made in good faith; and (2) whether SP proponents, given a brand new set of levers with which to wreck the private insurance industry, will stop before their work is done.
DrSteve on October 21, 2009 at 11:41 AM
Of course they do but well below the levels of British Hospitals.
My real point is Proud Rino’s need to ridicule spelling errors as if that is how to win an argument.
As to your point about sending someone to another hospital to save the costs of back up equipment. What happens when each of those machines are being utilized to capacity? Where do you send them now?
I have to sign off but when I get back I’ll look at your reponses.
chemman on October 21, 2009 at 11:43 AM
Completely disagree.
Every child should be provided with the means to attend school, whether his parents are poor or not, agreed.
But public schools are completely unnecessary. Belgium funds the child, not the school – the parents pick what private school they want the child to attend and the money goes to that school. There are no public schools in Belgium and their outcomes far exceed ours for a far less per capita expenditure.
NoDonkey on October 21, 2009 at 11:44 AM
Do you even read what you write? How in the world can a Public Option be cheap? The sheer name, PUBLIC option, says it will be paid for by taxes on the general public. So it will be cheap for some, but only because everyone else is paying for it.
If you can show me how insurance companies are NOT competitive, I’ll listen. But right now, insurance companies have to do what they do just to stay in business because of the enormous amounts of regulation and restriction placed on them by GOVERNMENT. 3.3% profit puts other businesses out of business. With a liability that is unknown from day to day, you have to keep your reserves up. Gov’t doesn’t understand the economics behind private business and thinks just because you have a sign and a front door, you should be rolling in the money.
Gov’t has never been, will never be, and isn’t now the answer to anything except national security. Any Obama can’t even get that right.
uknowmorethanme on October 21, 2009 at 11:45 AM
So what about them?
Did you not see my discussion on how the government has an intrinsic advantage over private industry?
Or are you also going to claim that ‘The government is bound by the same market forces as anyone else is. ‘
Juno77 on October 21, 2009 at 11:45 AM
So, what is the difference for asking for a single payer system now, or paving the way ultimately for a single payer shortly down the road now?
See, the problem with the later, and with your argument for the cheap govt option here, is that companies and people that CURRENTLY use private insurance companies will dump those quick fast and in a hurry for the govt plan. The reason? Cost. Plain and simple. Businesses are not going to pay more than they have to for insurance if they can avoid it. The govt sets up their plan to be purposefully cheaper than what private insurance companies would go to, which will in turn then run those private insurance companies out of business. This, in effect, paves the way for a de-facto single payer system. Would you disagree?
Highlar on October 21, 2009 at 11:47 AM
Do you see how requiring insurers to provide coverage, without charging extra, for clients who walk through the door with pre-existing conditions would rive them out of business?
BTW, when you end up with a government monopoly on health care, the private plans become illegal. So you don’t have the option to pay rather than wait, at least not unless you’re willing and able to leave the country.
ProfessorMiao on October 21, 2009 at 11:50 AM
Of course they do but well below the levels of British Hospitals.
My real point is Proud Rino’s need to ridicule spelling errors as if that is how to win an argument.
As to your point about sending someone to another hospital to save the costs of back up equipment. What happens when each of those machines are being utilized to capacity? Where do you send them now?
I have to sign off but when I get back I’ll look at your reponses.
chemman on October 21, 2009 at 11:43 AM
–That obviously would be part of the consideration, as would the length of time needed to get a new machine onsite. Businesses used to keep in stock all sorts of backup parts, etc. in case a machine would break. They then discovered the carrying cost for those back-up items was quite large. Now they’ve generally gone to a “just in time” model for many parts, but do consider possible supply chain problems/hickups when making those decisions.
Jimbo3 on October 21, 2009 at 11:52 AM
You are aware that Medicare Advantage only exists because Medicare is so pathetic that it can’t get it right. They had to have private insurers subsidize Medicare provider payments. This is the ultimate catch-22.
You turn 65. Your insurance drops you from primary coverage because you are eligible for Medicare. Sure, you can keep your insurance, but only as a supplement to Medicare, which we see now, is 100% necessary if you want to avoid the “death panels” known as bureaucrats.
Most of the money spent on healthcare is for people at the end of their road. It’s obvious why. What isn’t obvious, is why Gov’t decided that nationalizing the most expensive portion of healthcare would be in our best interests.
The existance of Medicare would lower premiums for everyone else…in theory…in reality, Medicare refuses to pay the cost of service and therefore, private insurance must subsidize Medicare shortcomings passing the cost on to everyone else. Gov’t screws everything up because they don’t think things through, they rush bills through, and, they suck.
uknowmorethanme on October 21, 2009 at 11:53 AM
So what about Medicare Advantage plans, Juno77?
Jimbo3 on October 21, 2009 at 11:35 AM
So what about them?
Did you not see my discussion on how the government has an intrinsic advantage over private industry?
Or are you also going to claim that ‘The government is bound by the same market forces as anyone else is. ‘
Juno77 on October 21, 2009 at 11:45 AM
–Private insurance companies and healthcare companies provide the Medicare Advantage plans, not the federal government.
Jimbo3 on October 21, 2009 at 11:53 AM
–Private insurance companies and healthcare companies provide the Medicare Advantage plans, not the federal government.
Jimbo3 on October 21, 2009 at 11:53 AM
Yes, because Medicare is so pathetic that providers are not accepting new patients and Medicare just flat out won’t pay for certain things (think “death panels”).
uknowmorethanme on October 21, 2009 at 11:56 AM
I’m thinking caps might make your reading comprehension better. Guess not. How many times has it been laid out for you? Private companies cannot “flourish” alongside govt. when govt. controls the market & the price? Hmmm? How? The Post Office analogy was perfect, but not for the reasons you cited. The PO should be out of business. You didn’t even know that they have exclusivity on delivering first class mail. How can you hope to argue coherently when you cite an example that proves not your point but ours? Like your dear leader, you are in way over your head.
JAM on October 21, 2009 at 11:57 AM
“Reading the MRI/X-ray” is the easiest part of the job.
Radiologists get paid the big bucks because they perform THIS correctly:
Treats benign and malignant internal and external growths by exposure to radiation from x-rays, high energy sources, and natural and manmade radioisotopes directed at or implanted in affected areas of body. Administers radiopaque substances by injection, orally, or as enemas to render internal structures and organs visible on x-ray films or fluoroscopic screens
But where else do you suggest we cut corners? And since your Democrats won’t impose tort reform (which would save more than all of the Democrat’s hare brained ideas combined), don’t you see how what hospitals save will be paid out to lawyers and malpractice insurance premiums (which will skyrocket)?
NoDonkey on October 21, 2009 at 11:41 AM
–So if reading X-Rays and MRIs is the highest contribution they make, why have Radiologists do lower value work as part of their job? That’s like having a lawyer do a paralegal’s job. Not cost effective, unless you have an overabundance of lawyers.
–Tort reform is not going to save much, even if adopted nationally. About 3/4s of the states (from the last news I saw) had already changed the “joint and several payee” rule (which means that if you were in any way responsible for an injury, even if only a small amount, you were liable for the whole cost) to a “proportional” fault model. And about 1/2 of the states have already limited non-economic damages. That’s why the CBO though nationwide tort reform would only save 0.3% of overall healthcare costs.
Jimbo3 on October 21, 2009 at 11:58 AM
Price fixing worked so well for Hillary Clinton’s No child left un-vaccinated programme. The gov’t set the price, the companies stopped making the product. That is the democrat way.
daesleeper on October 21, 2009 at 11:58 AM
Proud Rino realizes I am right on this point, but instead of conceding that it is attempting to drag me into an irrelevant argument on terminology.
Apparently, Proud Rino thinks that in it’s imperial Majesty decides what the terms of the debate must be.
In reality, it doesn’t get to decide what terms everyone will use.
Juno77 on October 21, 2009 at 11:59 AM
Has anybody else seen this chart of job losses?
http://hillbuzz.files.wordpress.com/2009/10/scary-jobs-chart.jpg
It sure looks like we’re in a recovery, and that we have another almost trillion to spend.
UnderstandingisPower on October 21, 2009 at 12:02 PM
Jimbo3 on October 21, 2009 at 11:52 AM
You’ll also find that hospitals and health care systems engage in resource sharing, so as to get the maximum benefit out of expensive equipment such as MRIs.
It’s not as if they need the federal government to think of these things for them. They know a little more about running hospitals than Nancy Pelosi does.
NoDonkey on October 21, 2009 at 12:02 PM
“Truly it has a dizzying intellect.” – The Dred Pirate Roberts
Circuitous, illogical, unreasonable and pointless.
JAM on October 21, 2009 at 12:02 PM
Why don’t you answer my original question: ‘Price fixing DOES solve cost problems’?
Juno77 on October 21, 2009 at 12:03 PM
From a June 25, 2007 WebMD article – The prevalence of the drug-resistant staph MRSA in the nation’s hospitals is as much as 11 times greater than previous estimates suggest, according to findings from the most comprehensive study of the infection ever done.
For every 1,000 patients treated in U.S. hospitals, 46 cases of methicillin-resistant Staphylococcus aureus (MRSA) now occur, researchers concluded.
From a recent (I believe) UK survey (see http://society.guardian.co.uk/nhsperformance/table/0,,1266030,00.html):
Hospitals’ performance and MRSA rates
Trust Rate of MRSA per 1,000 bed days Star rating
Guy’s and St Thomas’ 0.45 Three
Addenbrooke’s 0.38 Two
Hammersmith hospitals 0.37 Three
University hospital Birmingham 0.35 Three
King’s College hospital 0.35 Three
University hospital of north Staffordshire 0.35 Two
Royal free Hampstead 0.34 Two
North Middlesex hospital 0.33 Two
University College London hospitals 0.32 Three
Portsmouth 0.32 Three
Epsom and St Helier 0.32 Two
St George’s healthcare 0.31 Two
Plymouth hospitals 0.31 One
Oxford Radcliffe hospitals 0.3 Two
Brighton and Sussex University hospitals 0.3 Zero
Source: SocietyGuardian.co.uk
–These aren’t apples-to-apples comparisons, because they apparently involve different years, but it suggests that the US might have worse MRSA problems than the UK.
Jimbo3 on October 21, 2009 at 12:05 PM
I didn’t write that reading X-rays and MRIs is the highest contribution they make! I wrote that the mere reading is the easiest part of their jobs.
But if they’re going to treat and perform procedures, they are also going to have to read the x-ray’s/MRI’s etc.
And you don’t have untrained, non-radiologist personnel administering chemotherapy and radiation, unless you want a crappy outcome or unless you think that every case is routine and there is nothing more a specialist may possibly contribute.
If Democrats want to dramatically lower standards of care, they should just say so. You will have lower outcomes, more deaths and sicker patients if you outsource care to techs and radioloigists in India.
That’s why the CBO though nationwide tort reform would only save 0.3% of overall healthcare costs.
Jimbo3 on October 21, 2009 at 11:58 AM
Incorrect. Real tort reform would save at least 10% in medical costs and the CBO didn’t calculate the savings that would come from physicians no longer having to order multiple tests (defensive medicine).
NoDonkey on October 21, 2009 at 12:08 PM
Let me explain:
“Price fixing” doesn’t work in a couple senses – when companies try to price fix, it’s illegal and it usually doesn’t achieve their desired goals anyway. If you’re calling “government setting a price floor or price ceiling” price fixing (which it’s not but I see what you’re getting at), then that can occasionally have positive outcomes (particularly in the case of a floor but ceilings too) but you’ll sacrifice market efficiency (at least in the immediate sense).
But “having a government plan” is not the same thing as “price fixing,” and “having a government plan tied to medicare” is not price fixing either. It’s just “having a government option.” Has that ever been good? Sure – I think the public school system has been good – state-funded colleges in the United States are very impressive, and some of them (Michigan and Berkeley for instance) are competitive with any good private school. I’d say having a public mail delivery service in addition to have private delivery services has worked pretty well in the past (but not now), although in that case the public option existed before the private one (but there was no prohibition on private services).
That’s why the terminology matters.
Proud Rino on October 21, 2009 at 12:09 PM
Medicaid Advantage is offered by private insurance companies at rates set by the federal government (as I understand the situation). Yet there seem to be plenty of insurance companies who are willing to offer Medicaid Advantage.
They wouldn’t be willing to continue to offer Medicaid Advantage policies if they weren’t making a profit on those policies, would they? I have no idea what negotiations go on between the insurance companies and the hosptials, but obviously the insurance companies found ways to live within those cost structures and still make a profit, which would suggest that the insurance companies forced their suppliers, the hospitals, to reduce costs. And a Government-set price or price schedule does help reduce the prices paid by consumers in those situations.
Jimbo3 on October 21, 2009 at 12:12 PM
Incorrect, NoDonkey; read the CBO report. The cost of defensive tests was considered by them.
And you don’t have generally have radiologists (as opposed to radiologist helpers/nurses) administering chemotherapy and radiation. You do have a radiologist or other doctor quickly available if something may go wrong, but that can be by phone.
Jimbo3 on October 21, 2009 at 12:15 PM
^ Why our newest couple generations can’t get a foot on the corporate ladder…the lowest rungs are saturated and many of the middle rungs have vanished overseas. Great for the bottom lines of the companies, lousy for us.
Dark-Star on October 21, 2009 at 12:16 PM
Clueless…you think that public schools are doing a good job, at approaching 35% drop out rate?
And just because a few companies survive, doesn’t mean it is successful.
Your example of schools is perfect…the feds do everything they can to stifle competition in schools.
You think if one of two companies exist then competition is healthy…and you think that double taxing people who send their kids to private schools is healthy.
Like I said…one thing is certain, you never took economics in school…and I venture to say you don’t work in private enterprise.
right2bright on October 21, 2009 at 12:17 PM
From the latest CBO report: CBO now estimates, on the basis of an analysis incorporating the results of recent
research, that if a package of proposals such as those described above [which included a $250K cap on non-economic damages and other items] was enacted, it
would reduce total national health care spending by about 0.5 percent (about $11 billion
in 2009). That figure is the sum of the direct reduction in spending of 0.2 percent from lower medical liability premiums, as discussed earlier, and an additional indirect
reduction of 0.3 percent from slightly less utilization of health care services.
–FYI, I only remembered the 0.3, not the 0.2 impact on malpractice premiums. The effect of the lowered malpractice premiums may or may not be passed onto the public.
Jimbo3 on October 21, 2009 at 12:19 PM
Hmmm… by LAW Goverment sets the price it pays for medicare services.
As Medicare covers all our old folk, they are FIXING the price they will pay for services for our old folk. They have a monopoly on basic health insurance for our old folk… ie… by law… and then, by law, set what rates they will pay doctors.
And those rates are not dependent on what COSTS those Doctors actualy accrue. Those Rates are set by an unelected BOARD run by the Government.
Thus, they Government is PRICE FIXING for the Monopoly they have with Health Care for Seniors.
Real problem is that Doctors COSTS are not less… and they then pass the remnants of those costs onto their other Customers, in higher rates.
Now, you want to put MORE people under Medicare reimbursment rates? By expanding those rates to other programs? When it will inevitably drive up the rates of all the folks who hold non Government run Insurance?
Romeo13 on October 21, 2009 at 12:33 PM
the point is that there is NO direct competition for medicare….all those are supplements to medicare…
how can an insurer force a hospital to reduce costs? this is ridiculous…you act as though insurance companies are a monolith like governent.
clueless.
right4life on October 21, 2009 at 12:34 PM
uh colleges are good because students have a CHOICE…that is denied for secondary schools…DUHHHHHHHHHH
right4life on October 21, 2009 at 12:35 PM
No, but for kids who didn’t grow up having the option of going to a good private school (like me) a public school gave me a lot of great opportunities. Sure those opportunities would have been better at a private school, but my folks don’t have a lot of money. I ended up going to some of the best colleges and grad schools in the world, all of which was premised on that public school education. My story is not that unique, either. The fact that people drop out doesn’t mean that many, many more are given opportunities they never would have had otherwise.
It?
Entirely false. I can think of many, many things they could do to stifle competition between private and public schools, like, for example, outlawing private schools altogether, or making public school attendance mandatory.
Only that it could be healthy. You or one of your fellow idiots thinks that because only one or two companies exist, then the market is automatically unhealthy, and that’s just wrong.
Where did I say this? I love the voucher program. I wish they would have done it when I was a kid.
Heh.
Proud Rino on October 21, 2009 at 12:38 PM
the point is that there is NO direct competition for medicare….all those are supplements to medicare…
how can an insurer force a hospital to reduce costs? this is ridiculous…you act as though insurance companies are a monolith like governent.
clueless.
right4life on October 21, 2009 at 12:34 PM
–Insurance companies, are in essence, consumers of health care, just like Wal-Mart is a consumer of TVs. Don’t you think Wal-Mart negotiates with Sony over prices and don’t you think Sony then adjusts its processes so it still makes a profit? Same thing with Insurance companies
Jimbo3 on October 21, 2009 at 12:38 PM
Yeah, just because you can talk about the subject and use the words “price” and “fix” in the same sentence doesn’t mean we’re talking about price fixing.
Proud Rino on October 21, 2009 at 12:39 PM
individuals are consumers of healthcare. this is where your entire argument falls apart. insurance companies are third parties…just as the government is.
medicare underpays hospitals…they can’t cut their costs to meet the payment, instead they cost-shift it onto the young.
so if hospitals can’t cut their costs to match the 800 lb gorilla, then how, and why, would they do it for a single insurance company??? hmmmmm??
right4life on October 21, 2009 at 12:41 PM
Right! They have a CHOICE between a publicly funded option and a private option.
I can’t remember, were you the one that I told to just look at the old post where I called you stupid? Because, if I haven’t, you’re a moron. Please refer to this post after any subsequent post you make so as to keep me from being repetitive.
Proud Rino on October 21, 2009 at 12:41 PM
To India? As in this stint is spurting fluid, doctor, what do I do?
Easier procedures, perhaps but a radiologist is required for most of this work, by any reasonable professional standard.
Unless you’re talking about drastically lowering the quality of care, which is the real objective here.
It will save far more than .3 percent, wrong again.
http://www.foxnews.com/politics/2009/10/09/tort-reform-reduces-federal-deficit-congressional-analysts-say/
NoDonkey on October 21, 2009 at 12:41 PM
big waste of money.
right4life on October 21, 2009 at 12:41 PM
moron, they have a CHOICE between public universities too…duhhhhhhhh…thats why its different than secondary education….the student gets the money…government loans, etc…and decides where to go
pathetically laughably stupid….what a moron.
right4life on October 21, 2009 at 12:43 PM
Please refer to
Proud Rino on October 21, 2009 at 12:43 PM
oh are you as fat as you are stupid?? because I imagine this fat sweaty troll sitting in a basement typing on the computer..after reading DNC talking point faxes…
right4life on October 21, 2009 at 12:44 PM
WAIT A SECOND! Are you saying that the public option is only going to have one hospital for the entire country? You’re right, I don’t like that idea at all.
OR
Proud Rino on October 21, 2009 at 12:44 PM
yeah I know, you’re too stupid to even come up with a new comeback….moron
right4life on October 21, 2009 at 12:45 PM
I got your ‘big waste of money’ right here, loudmouth. The private Christian school I went to gave me many fond memories until the tiny church that funded it simply couldn’t keep up anymore.
6th grade in public school…good Lord, what a horror. Nice neat facility and students with pottymouths to shame a Marine drill sergeant.
Dark-Star on October 21, 2009 at 12:46 PM
you’re only going to have one option on insurance…DUHHHHHHHHH moron.
and then that one option will tell the hospitals what they cover, and what they don’t…DUHHHHHHHHH moron.
right4life on October 21, 2009 at 12:46 PM
Your 54 million is my 0.3 and 0.2, NoDonkey. They’re both from the same document.
————————————–
individuals are consumers of healthcare. this is where your entire argument falls apart. insurance companies are third parties…just as the government is.
medicare underpays hospitals…they can’t cut their costs to meet the payment, instead they cost-shift it onto the young.
so if hospitals can’t cut their costs to match the 800 lb gorilla, then how, and why, would they do it for a single insurance company??? hmmmmm??
–Insurance companies buy a service and then sell it to consumers, just like Wal Mart buys a product and then sells it to the consumers. Insurance companies and Wal-Marts are intermediaries, but they are the one doing the negotiation with the supplier. Look at a recent Explanation of Benefit statement from your insurer. You’ll see that the “stated price” of a service is much different than the rate charged to you as an insured. It’s your insurance company that negotiated that lower rate. Hospitals have been negotiating with insurance companies/HMOs for years.
Jimbo3 on October 21, 2009 at 12:47 PM
Actualy, this whole health care “debate” boils down to the Government ATTEMPT to price fix. They want societal costs of health care lower, but because they are not a real provider, they have no direct impact on costs, just on the rate at which the government is willing pay for those services.
Its an attempt to divorce Cost, from Price, and thus starve the healthcare system until it does, somehow, decrease COST.
But once more, you do not answer the fundamental question… just as they do not.
How do you decrease COST, by decreasing payment RATEs, and still provide the same service?
Romeo13 on October 21, 2009 at 12:47 PM
Not million, BILLION. So that’s where you erred.
NoDonkey on October 21, 2009 at 12:51 PM
Here we have the common tactic of befuddling with BS.
Again these are simply terms of the debate. To most reasonable people,”Price fixing’ is an accurate term.
But ‘Proud Rino’ doesn’t, and as I have already stated, Proud Rino realizes I am right on this point, but instead of conceding that it is attempting to drag me into an irrelevant argument on terminology.
Note from it’s response:
In order to argue the point, it has to start changing what the terminology means. But instead of slipping on the hip boots and wading into the pool of BS, let’s just examine the terms definition:
Why glory be! It says: ‘as by producers or government‘
Now, does that settle that stupid argument or do I have to wade through another load of BS in you’re response?
Juno77 on October 21, 2009 at 12:51 PM
But once more, you do not answer the fundamental question… just as they do not.
How do you decrease COST, by decreasing payment RATEs, and still provide the same service?
–You don’t provide the same service. You change your service. If consumers won’t pay $10 for a dinner out and you’re a restaurant, you drop the parsley, change the ingredients, perhaps advertise a bit, and drop your price while trying to sell more alcohol, appetizers and deserts.
Jimbo3 on October 21, 2009 at 12:52 PM
and of course the point about public secondary schools vs. public universities, which you of course miss entirely because you’re too stupid to get it, is that students have no choice in secondary education…they don’t force public schools to compete with each other…as public universities do…..you ignorant twit.
and private secondary schools are much better, and deliver a much better product, at lower costs. but the government insulates public schools from the competition…thats why commparing private to public anything is IDIOTIC…and only an ignorant moron like you would do it.
right4life on October 21, 2009 at 12:52 PM
CBO now estimates, on the basis of an analysis incorporating the results of recent research, that if a package of proposals such as those described above was enacted, it would reduce total national health care spending by about 0.5 percent (about $11 billion
in 2009). That figure is the sum of the direct reduction in spending of 0.2 percent from lower medical liability premiums, as discussed earlier, and an additional indirect
reduction of 0.3 percent from slightly less utilization of health care services. (That reduction is the estimated net effect of the entire package listed earlier, although some
components of that package might increase the utilization of physicians’ services, as has already been noted.) CBO’s estimate takes into account the fact that because many states have already implemented some of the changes in the package, a significant fraction of the potential cost savings has already been realized.
—
Million was my typo. They are the same figure. See above and remember your figure is a multi-year amount.
Jimbo3 on October 21, 2009 at 12:55 PM
Logic dictates that lower payments means lower service.
How is that supposed to be better?
Juno77 on October 21, 2009 at 12:58 PM
I was referring to the money spent trying to educate proudrino…it was a waste of money…since he/she/it is still a moron.
right4life on October 21, 2009 at 12:58 PM
Maybe I’m missing something, but that’s not price fixing.
No, you’re not missing anything. Morrissey is using the wrong terminology here and muddying up the issue as a result.
“Price fixing” is when competitors collude on pricing — i.e., agree that they will not set prices above or below a certain amount. Price fixing is illegal under antitrust laws.
What the government is proposing is price controls, not price fixing.
Alex_SF on October 21, 2009 at 12:58 PM
But under todays Litigious environment, if a Doctor or facility does not give the exact same service, they will be sued for Malpractice, or some form of discrimination.
Romeo13 on October 21, 2009 at 1:00 PM
Ah, my mistake.
That was indeed a waste!
Dark-Star on October 21, 2009 at 1:03 PM
Ed does mean price controls, or directly negotiated prices, Alex.
Logic dictates that lower payments means lower service.
How is that supposed to be better?
–If a hospital is staffing your case ineffeciently, it doesn’t necessarily have to be lower service. For instance, maybe the hospital has one nurse for six patients and can change that to one nurse for eight patients without really impacting patient’s safety or comfort. Or perhaps physican assistants can be used instead of doctors for many more routine items. The real question is what are you focused on as a end result: Is it successful patient recoveries or time in hospital or reduced cost, a combination of them, or what? Once you know the end result, you can go back and figure out what changes you can make.
Jimbo3 on October 21, 2009 at 1:05 PM
Juno77 on October 21, 2009 at 1:06 PM
Romeo, there is no law I’m aware of that requires doctors or hospitals to give identical treatment to each patient. It wouldn’t make sense to treat someone whose been in a serious car accident the same way as someone with a sore throat.
And I’ve never heard of a malpractice case where someone sued because he wasn’t treated the same as someone else with a different condition. Yes, doctors are supposed to have procedures that they follow in treating conditions, and do get in trouble when they don’t, but it’s not like someone sues because he wanted to spend two more days in a hospital bed and couldn’t.
Jimbo3 on October 21, 2009 at 1:10 PM
That doesn’t answer the question.
How is that supposed to be better?
Juno77 on October 21, 2009 at 1:12 PM
From a legal dictionary:
Price Fixing
n.A method in which businesses who are in competition with each other set up a strategy to fix up prices of particular commodities to avoid price competition.It is a criminal act according to federal laws as it encourages unfair competition and the public is deprived of reasonbale prices. This arrangement can also be made between suppliers and manufactures or distributors.
Jimbo3 on October 21, 2009 at 1:12 PM
That doesn’t answer the question.
How is that supposed to be better?
Juno77 on October 21, 2009 at 1:12 PM
–If you can achieved the desired end result at a lower cost, then that would be better. So, for instance, if you can increase your use of physician assistants or your use of generic drugs and not affect patient outcomes and thereby lower your cost, you’d have a better result.
Jimbo3 on October 21, 2009 at 1:14 PM
The problem is always government.
Libertarian Joseph on October 21, 2009 at 1:16 PM
or perhaps you can just use pliars instead of going to the dentist!!!
right4life on October 21, 2009 at 1:18 PM
@ Proud Rino on October 21, 2009 at 11:37 AM
PR, you ignorant [deleted], it will not be not cheap, it will be invisibly subsidized by taxes.
Troll Feeder on October 21, 2009 at 1:24 PM
Seeing as you are getting into name calling…look who the idiot is.
You don’t think paying for a failing school system and then having to pay for private school is double taxing?
Sorry but you end up arguing with yourself, which is strange.
Yet basic economics escapes you…I have a feeling that you may still be in college, perhaps a community college…which is great.
But you use the argument that the school system proves that gov. allows competition, then cite the example that only the elite are allowed to go to private schools…thus shutting out the opportunity for the average not be able to go to school…once again you argue with yourself.
right2bright on October 21, 2009 at 1:27 PM
The best way of doing that would be to get the government out of the healthcare business.
Or are you claiming that the Government can be efficient?
More efficient that private industry?
If you believe that, would you be interested in buying a unicorn?
Juno77 on October 21, 2009 at 1:27 PM
Problem is that we are not talking about different treatements for different conditions…
We are talking different levels of treatment for the SAME conditions.
If an MRI is available for one patient (whose insurance covers it) in a hospital, if that hospital did not make that MRI available to another patient due to Insurance coverage… ie, a made a fiscal vice Medical decision… and that second patient DIED?
Hospital would be sued in a heartbeat… soooo… the hospiatal does that test… and passes that cost on to patients who CAN pay for that test, by increasing prices.
There is only two ways the Government plan can work… either creating two LEVELS of care for the SAME condition… or by lowering the Level of Care for ALL patients with that condition.
And as to your earlier efficiency argument? About Nurses? You may want to go talk to some nurses. They are already WAY understaffed at most facilities, due to both a nursing shortage AND the fact that most hospitals are already loosing money, and have cut staff to the bone…
Romeo13 on October 21, 2009 at 1:30 PM
Here’s why your analogy doesn’t work.
You provide the same service at less, because the restaurant down the street is providing it for less because the restaurant down the street is subsidized by taxpayers and you aren’t. You reduce your service and keep the same rates, you lose business. You reduce your rates and cut service (because otherwise you can’t make a profit), you lose business.
Soon everyone except the restaurant down the street that is subsidized by taxpayers goes under.
What happens to the only restaurant left in town?
It can ask the government to keep increasing taxes (or the deficit) to subsidize its growing client base in order to maintain the same service, or it can reduce services.
ProfessorMiao on October 21, 2009 at 1:31 PM
That is a sentence I hope to never see again while reading over a serious discussion on economics and/or government. Unbelievable.
anuts on October 21, 2009 at 1:34 PM
The reason most places do not use Physicians Assistants is LEGAL, not Medical.
If a PA makes a diagnosis, and it goes bad… that facility has almost no defense against Malpractice.
Military gets away with PAs (like Navy Corpsman, for which I have great respect) because you can not sue them….
So, unless there was some Legal remedy so you could have some defense when using PAs, it won’t fly… and of course… this is NOT part of any of the bills before Congress…. so its a non starter.
I like that you are looking at actualy trying to decrease healthcare Costs… but the Government is not trying to do that… they are only looking at healthcare PRICE… even when THEY are the once driving up the Cost!
Romeo13 on October 21, 2009 at 1:37 PM
Romeo, PAs are used rather extensively in Texas. And it’s not legal things neccessary driving the use of an MRI. If you can make an accurate diagnosis without the use of an MRI, there’s no reason to use an MRI. If you can’t, then it’s a standard of good practice to use an MRI, and not so much a legal point.
Jimbo3 on October 21, 2009 at 1:44 PM
You provide the same service at less, because the restaurant down the street is providing it for less because the restaurant down the street is subsidized by taxpayers and you aren’t. You reduce your service and keep the same rates, you lose business. You reduce your rates and cut service (because otherwise you can’t make a profit), you lose business.
Soon everyone except the restaurant down the street that is subsidized by taxpayers goes under.
What happens to the only restaurant left in town?
–Professor, my understanding is that the subsidies would be given to the individuals, not to the hospitals.
Jimbo3 on October 21, 2009 at 1:48 PM
Juno, I’m not in favor of the public option. But I don’t see the problem in having the government directly negotiate with suppliers of healthcare products and insurance companies. Wal-Mart does it and prices to consumers drop. I don’t see why the government shouldn’t.
Jimbo3 on October 21, 2009 at 1:50 PM
Or perhaps physican assistants can be used instead of doctors for many more routine items.
Jimbo3 on October 21, 2009 at 1:05 PM
or perhaps you can just use pliars instead of going to the dentist!!!
right4life on October 21, 2009 at 1:18 PM
–Had your teeth cleaned lately? It was a dental hygentist, not a dentist, who generally does that.
Jimbo3 on October 21, 2009 at 1:52 PM
Rush just mentioned this post on air.
Trent1289 on October 21, 2009 at 1:54 PM
Then I don’t think you understand it, because it’s not a very difficult concept. The market is the market. The government does not create the market – it can cause the market to be impacted in different ways, of course, because it makes the laws. So of course if the government says, “Well you have to do _____,” then that’s what you’re going to do, because that’s the law. Additionally, a govt run business is not going to have the same desires a private company might, since it’s going to be less concerned (if concerned at all) with turning a profit.
But that doesn’t mean that all the factors that apply in a free market don’t apply to a government-run business. What I mean by that is, if the government makes a cheap product and that product is better than a more expensive product, then the cheap govt product is going to flourish.
If the government starts a business to compete with other businesses, the government-run business is going to be subject to the same problems all the other businesses might have.
Now you might say, “Oh well but they’ll change all the rules and make it so that their program is the only one people can use,” which in this case would be single payer, but that’s not what the proposed bill is.
If you have a govt run health care plan competing against insurance companies, maybe the govt plan is cheaper (for consumers) and maybe it covers more things, but the fact is that if it takes too long to get service or if you can’t get certain treatment that you would like, then people are going to spend more money and get private treatment.
I don’t understand why this concept is so difficult for you people.
Proud Rino on October 21, 2009 at 1:54 PM
It becomes a legal point when doctors are sued for mis-diagnosis. The fact is, many doctors order test to confirm a diagnosis, whether positive or negative, from a liability standpoint.
ICBM on October 21, 2009 at 1:55 PM
do you do anything other than twist things around? you cannot answer a point..you are a typical democrat…deceptive and sneaky.
go to britian, and find a dentist with your beneficent guvmint health plan….you may end up with Dr. PLIARS…
you know damn good and well what I’m talking about.
right4life on October 21, 2009 at 1:59 PM
Sorry, but it sounds like you do favor government control of healthcare – and that’s doing more of the same that got us into this mess in the first place.
I’m not exactly comfortable with Wal-Mart doing that either – suppliers either have to cut cost somewhere or go out of business.
Does that sound like the best course of action with healthcare?
Juno77 on October 21, 2009 at 1:59 PM
Ummmm…. Insanity = doing the same thing over & over again & expecting different results.
Congress has been oficially insane for decades.
Badger40 on October 21, 2009 at 2:00 PM
I’m not exactly comfortable with Wal-Mart doing that either – suppliers either have to cut cost somewhere or go out of business.
Does that sound like the best course of action with healthcare?
Juno77 on October 21, 2009 at 1:59 PM
–I’ve worked for several large suppliers to Wal-Mart. They learn to be creative and know their business.
Jimbo3 on October 21, 2009 at 2:01 PM
pathetically ignorant..as usual. try econ 101.
right4life on October 21, 2009 at 2:01 PM
It becomes a legal point when doctors are sued for mis-diagnosis. The fact is, many doctors order test to confirm a diagnosis, whether positive or negative, from a liability standpoint.
ICBM on October 21, 2009 at 1:55 PM
–You (I assume) wouldn’t order a MRI if an X-ray or a needle biopsy would be as good and accurate would you? And an X-ray or needle biopsy will usually be much cheaper than a MRI, right?
Jimbo3 on October 21, 2009 at 2:02 PM
Jimbo3 on October 21, 2009 at 12:55 PM
$54 billion is not .3% no matter how you slice it, the whole package is projected to be $900 billion.
And $54 billion is a conservative estimate for tort reform. Eliminating the fear of frivilous lawsuits will reduce the need for unnecessary testing and procedures.
NoDonkey on October 21, 2009 at 2:06 PM
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