quinnscommentary

What a travisty. Under a deal with the administration the 40% surtax on high value plans will not go into effect until 2018 for collectively bargained plans. In addition, the limits are initially raised to $8,900 and $24,000.

To pay for this gimmick there is talk of more fees on medical-device makers. The changes reduce the revenue projected by $59 billion over ten years.

In addition, it is being reported that beginning in 2017 unionized workers could buy insurance through the new exhanges, yet another back door entry into centralized health insurance.

We are seeing more and more cost shifting onto the average American with health insurance and more special deals for special interests, interests aligned with the Democratic party.

Will anyone be surprised when health costs are not contained over the next ten years? What we are doing now with all these gimmicks guarantees that the cost of health benefits will keep rising and indeed accelerate.

I suspect the unintended consequences may not be so unintended.

If any member of Congress thinks they are not creating havoc and hurting millions of Americans with their version of health care reform they should read this (with more to come no doubt):

Public Service May Drop Retiree Drug Benefits

Jan. 14 (Bloomberg) — Public Service Enterprise Group Inc., the owner of New Jersey’s largest utility, may drop prescription drug benefits for retirees if the U.S. passes health-care legislation that changes certain tax subsidies, its chief financial officer said.

Employers receive a tax-exempt subsidy to sponsor prescription drug coverage for retirees over 65 years old, keeping them off of the government’s Medicare plan. Under a possible health care bill, the subsidy would become taxable, causing company health-care costs to rise and forcing employers to take charges against their financial statements, Caroline Dorsa, Public Service’s CFO, said in a telephone interview.

“We are supportive of health-care reform overall and of the bill in general, but this particular provision would cause us to have to reconsider offering the retiree drug benefit,” Dorsa said. “This is something we can’t manage around. That’s the problem. The only way you manage around it is not to offer the benefit.”

Newark-based Public Service has about 10,000 retirees and dependents, whom it provides with prescription drug benefits. Another 5,500 current employees and dependents will be eligible in the future. Employees who joined the company after about 1996 do not take part in the plan.

At Public Service, medical and prescription drug costs total about $1.1 billion in future liabilities, or the amount it will have to pay out. Prescription drugs account for about 45 percent of that, Dorsa said.

If Public Service kept funding the retirees’ drug benefits it would have to take a charge against its income statement and another one against its shareholder equity in the same quarter the law is approved, Dorsa said.

The charges would have “material impact” on the company, Dorsa said, declining to give specifics. The charges would also increase the company’s financing costs.

Public Service fell 23 cents, or 0.7 percent, to $32.82 a share in New York Stock Exchange composite trading.

According to the US Chamber and others a deal has been reached with organized labor to lessen the impact of the 40% excise tax on high cost plans, that is for collectively bargained plans. 

Unions Exempt? – We are hearing that a “compromise” has been reached between the Senate and the House committee chairs (remember, the House folks were arguing on behalf of unions). What they may have agreed to is raising the exemption from the “Cadillac” high-cost insurance tax to $23,000 for a family of four – as well as exempting collectively bargained plans that negotiate their contracts before 2013. In practice, this means that non-union workers will pay the Cadillac tax, and union workers will not, until probably 2015 or 2016.

What a way to run a health care system, deal upon deal whether it be doctors, unions, drug companies, hospitals, the AARP, Ben Nelson and who knows who else?  Remind me again who said the days of lobbyists in Washington influencing legislation are over?

A New Yorker article entitled The Bell Curve provides some very interesting food for thought for anyone who is serious about health care reform and quality.  What you think you see, may not be what you actually get. 

How do we assure that all Americans have access to the highest quality health care and equally important, how do they find that care?  That is what health care reform should be about.

National health care spending up $222 billion over the next ten years under the Senate health care reform bill, so estimates the Chief Actuary of CMS.

Nobody said what would happen after ten years.

Not that this is unexpected, but it is also not something the politicians are prone to talk about as they prefer to think only in terms of the federal budget and not the rest of America. The reason for the increased spending is simple, more people covered, more demand for health care services and (I will add) an increased lack of concern for health care costs on the part of individuals.

The reason the numbers work for federal budget purposes is because they are using ten years of increased revenue and six years of expenses in the first ten years plus there is a tremendous amount of cost shifting to the states and to individuals.

Here goes, I think the entire process of discounted fees, networks, drug rebates, etc. is nonsense and serves only to distort the true cost of health care and raise the costs for all Americans. 

Not only do those who cannot take advantage of the discounts get hurt by paying more, but one has to assume that prices are inflated to partially offset the cost of giving discounts and rebates.   My wife recently had a sleep study, the fee charged was $6,000, the fee accepted as payment in full was $1539.00  What sense does that make?  What is the true cost?  Is my discounted fee offset by some poor soul paying the $6,000?  Is the $1539 the result of good negotiating or leverage on the part of the plan administrator, does another plan pay $2,500 or some other “discounted” fee?

The federal government forces drug companies to provide rebates if they want to sell drugs to government entities, is that a true savings or does the price of the drug increase to make up the loss via the rebate?

Who has whom under control?

I don’t know all the answers but I do know that when you squeeze a balloon it simply expands in another direction.  Is there any reason to believe that trying to artificially squeeze the price charged for health care by any number of different government entities and scores of health insurance companies provides any different result?  I think not!

What we need are national fair price schedules adjusted for any number of factors by areas of the U.S.  This doesn’t mean that fees are fixed by the schedules, but rather that a fair price including profit is a guideline so everyone can see whether they are receiving a fair deal, a good deal or are being ripped off.  Let’s say the fair geographically adjusted price for anesthesia in New York City is $300 per fifteen minute interval for X procedure.  Consumers and insurers will expect to pay that fee, if they are charged less than that physician is more competitive, if they are charged more they make the decision to use or not use that provider.  There are no participating or non participating providers, a patient will always be on the hook for fees above the schedules.  If they pay 20% of a charge they pay 20% of the actual fee charged, at, below or above the scheduled fee.  If the participants in a group plan fail to select providers at or below the guidelines, then their premiums will be higher than other groups.  The power shifts from the provider or insurer to the patient.  In the case of employer plans, employers could set their contribution using premiums that are adjusted based on the use of the fair price schedules.  Thus the plan participants would pay more out of pocket and more in premiums if they do not exercise discretion in selecting providers.

Needless to say the fair price scheduled fees would be widely published and available to all and regularly adjusted, but at rates closer to general COLI. 

All providers, including hospitals could maximize their profits by becoming more efficient, by charging less than the guidelines they could attract new customers, those providers who believe they add additional value for higher fees could make their case and attract customers that way.  The vast majority of providers would be free of the hassle of networks, discount negotiations, contracts and the like as would insurance companies who would also have an increased incentive to compete on their own efficiency and not external  pricing structures.

Are there gaps in all this, probably.  Will it take time for providers and consumers to adjust, certainly.  However, it can’t take any longer or have more faults than our current versions of health care reform, plus it appears to provide desirable incentives for all participants in the health care system, and it puts consumers in the “affordable” drivers seat.

blogsurfer.us

Do Americans get it, the real nature of the health care problem in America? Probably not as evidenced by this letter to the editor of the New York Times.

To the Editor:

In this corrupted bill every citizen is compromised. We asked for health care reform free of those rapacious insurance industry practices that have plagued our health and welfare for decades. Instead we watched helplessly as special interests contorted the proposed bill into health insurance reform that codified the very practices we wished to stop.

It victimizes the poor and punishes the middle class and taxes those lucky few who actually have reasonable insurance coverage. It’s a blatant act of theft, where our tax dollars and our premiums will vanish into a system that has no intent to insure our health or cover our medical costs or guarantee that we will have access to medical services.

Senator Mitch McConnell of Kentucky said the bill was “a monstrosity full of special sweetheart deals.” He was right. Unfortunately, Congress loves industry more than it does its constituents.

Sadly, even our president will go along with this underhandedness. It seems that he still has his audacity but has taken away our hope. I’m left bereft as I watch the radical agenda of big business finish reshaping America into an impoverished and broken version of our founding fathers’ dreams.

John Thomas Ellis
Kentfield, Calif., Dec. 20, 2009