Archive for the ‘Healthcare’ category

Which Consumer’s Interest In Mind?

February 14, 2020

If one can read and ask relatively simple questions, one can realize that not only is American healthcare expensive, it is so by a factor of 2, the most expensive healthcare in the world.  About 15% of this healthcare expense falls on drug expenditures.  Hmmm. 

When Obamacare was being debated, pharmaceutical companies lobbied long and hard that (1) their proportion of healthcare costs was small, (2) their profits were necessary to maintain the army of researchers working to find new cures, and (3) pharmaceutical companies would do all that was possible to keep drug prices as low as possible… so don’t attack drug prices in Obamacare.

Twelve years later the evidence points to drug prices as the most egregious part of the unseemly high overall healthcare cost.  Maybe a case can be made for sky high prices for newly developed wonder drugs, but drug companies have engaged in all sorts of schemes aimed at raising drug prices and extending the time these drugs were under patent protection.  So much for Mr Nice Guy.

How much is too much profit?  In a free and open society that is a question beyond definition.  Capitalism demands any company to price their products for maximum profit (units sold x profit per unit).  So what can a free economy do to reign in this predatory behavior?

Here are three ideas.

  • Patent Protection.  This is the shot across the bow to get the industry’s attention. Patents are granted by governments, giving monopoly status to the drug company for some period of time.  Shortening the monopoly period will bring on competition and competition normally lowers prices.

 

  • Offering/withholding government money.  This is the carrot and stick approach to gaining more favorable industry behavior.  The US government could offer universities and drug companies grants to underwrite drug research.  For example, in addition to making funding available or not, government could make the grants contingent upon drug selling prices no higher than “X” in return for government financing.

 

  • Worldclass pricing.  This is the hammer where Government enters the pricing decision.  Government funded healthcare plans should expect the lowest price available “in the world” for a specific drug.  Drug companies would have the choice (1) raise the prices of their drugs sold overseas or (2) lower the prices charged in the US.  Most Americans do not realize the US companies sell the same drug overseas (Canada included) for less than the charge US citizens. 

Any plan to reduce the overall US healthcare cost must proceed deliberately but cautiously too.  HOverall healthcare represents over 1/3rd of the US economy and unforeseen consequences could materialize if draconian measures are used as solutions to the overall healthcare cost dilemma.  Further, healthcare availability varies across the US and “one size, fits all” solutions could adversely impact many Americans. 

On the other hand, drug prices can more easily be done in a “one off” manner.

Pharmaceutical companies have been very righteous in their advertising.  Their advertising strategies reflect the industry as dedicated life savers  The opioids tragedy showed the underbelly of the industry where greed and profits ruled. 

It is time for no more Mr Nice Guy. 

Next Stop Iowa

January 8, 2020

Today, Elizabeth Warren scored a lot of minutes on MSNBC.  Warren was gratuitously tossed some softball questions which allowed the Senator to share her ideas on major campaign issues.  She did well, IMO, and provided believable scenarios, but missed the point with healthcare.

Healthcare should be a slam dunk for Warren or any Democrat.  Today American healthcare is the most expensive in the world and still does not cover all Americans.  US healthcare cost twice as much (per capita) as two dozen other industrial countries and delivers mediocre results when compared to these countries.  Most galling is that medications produced by US companies are available in other countries at lower prices than in the US.  Hmmm.

Warren, however, emphasized how she would provide universal coverage (Medicare For All) with out raising taxes on the middle class.  Taxing wealth Americans and Corporations was her prescription.  In otters words, Warren offered the same high priced healthcare with no new taxes.  Hmmm.  IMO, Warren is missing the point on healthcare.

All Americans find the cost of healthcare too expensive.  Many Americans find they can not afford prescription drugs.  And too many Americans find healthcare is not available due to pre-existing conditions.  Focusing on solving those defects will garner votes.  How to pay for it is a detail.

Elizabeth’s Pickel

October 18, 2019

Senator Elizabeth Warren has drawn some criticism for her performance at this week’s Democrat Debate.  The criticism centers on Warren dodging the answer to the question “will taxes increase for middle class families if Medicare For All is adopted.  There are many answers Warren could have given but none that fit the frame work of a televised debate with 11 other hopefuls.  Here’s Warren’s problem.

The most fundamental question should be “is healthcare a right” or “is healthcare a privilege”?

If healthcare is a privilege, then the path forward leads to “the best healthcare money can buy”.  If someone has the money, they can have access to the best healthcare available in the US.  If someone does not have the money, then the healthcare available is to be found in whatever safety net programs Employers and Congress enact or at the Emergency Room.

If on the other hand one believes healthcare is a right, then the question arises what is the best method to deliver healthcare.  And here begins the pickle.  Healthcare is not free and must be paid for.  And, healthcare will cost middle class Americans more next year regardless of whether there is a “Medicare For All” option or not.  

So how should Warren have answered the question?

How about, “I don’t know but I am sure asking if taxes are going up is the wrong question.  Income taxes could increase but middle class Americans’ healthcare costs might go down”.  “Here’s why.  Medicare For All is an aspirational proposal whose goal is to provide healthcare to all American residents at existing quality levels or better and at steadily reducing costs.  Under Medicare for All, there should be no exclusions for pre-existing conditions or life time monetary limits on benefits.” 

And why not, all other modern industrialized countries provide their residents basic healthcare with health outcomes equal to or better than the US, and experience a national expenditure that is one half what we spend in the US, so why can’t the US do the same?”

Warren could have said, “And even if there are reasons we can’t achieve a 50% reduction (and still provide equal or better care), there is a lot of room to cover the costs of the 20% of Americans under or uninsured.”

These “best in class” healthcare delivery systems which cost about one half what the US pays have (1) a far greater emphasis on preventive health care, (2) negotiate healthcare providers costs nationally, and (3) offset much of the actual healthcare costs with a consumption based tax (VAT) which involves all of its residents in sharing the healthcare cost burden.   

Finally, Senator Warren might have said, “healthcare costs are bankrupting America.  Over two dozen other countries have found ways to deliver equal or better healthcare outcomes at one half the total amount the US spends.  Why can’t we do the same.  If you do not think healthcare should be a right (which of course must be paid for), I can only say I sincerely disagree with your view.  If you hold this view and are relaxed because you receive your healthcare insurance from your employer, I have bad news for you.  Global competitive market pressures are slowly making your employer uncompetitive and over the coming years more and more companies will be ending healthcare coverage.

So the wiser goal is not just insuring all Americans, but rather insuring all Americans at a cost approaching one half of what we are paying today insuring 80% of Americans.

Shh, Who’s In My Pocket

September 30, 2019

Amid all the ruckus this week over the Trump extortion-like telephone call with the Ukrainian President, there was a Kaiser Healthcare news release picked up by most newspapers including the Wall Street Journal which quickly became “below the fold” news.  The article revealed the continuing rise in employer provided healthcare insurance cost, this time topping the $20,000 a year cost tag.  Hmmm.

The article went on to point out that on average the insured paid about 1/3rd of this cost through deductibles and co-pays.  That means that on average, Americans who obtained their insurance through work were paying about $6000 per year.  Hmmm.

As is always helpful in these matters, US minimum wage is $7.25 per hour or $15,080 per year.  So if one is employed at minimum wage, healthcare cost would amount to 40% of your “before tax” annual salary.  The average annual income is $59,039, so healthcare cost for those earners is about 10% of “before tax” income.  Hmmm.

These are just interesting statistics unless you believe healthcare is a right.  I mean a right like access to water, clean air, and safe streets.  Healthcare is not free just like water, air, and safety.  Everyone must pay in some way.  But it should be clear that with healthcare everyone cannot afford to pay the same amount.

Some politicians would suggest the problem lies with “high cost” insurance and Americans ought to be able to buy stripped down policies.  Really!!! How does buying less healthcare with second class healthcare insurance make everyone equal?

If one has “employer provided” health insurance, the new $20,000 threshold represents another hand in ones pocket.  The employer isn’t paying for the employees health insurance, the employee is.  The employee’s wages are artificially lower by the amount the employer pays not just the amount co-pays and deductibles represent.  And why is that important?

Healthcare spending in the US is twice as much as two dozens other modern industrial countries and the healthcare outcomes are no better.  With people thinking that healthcare is free (since healthcare insurance comes with their job), who cares.

Basic healthcare has become a right for most people’s expectation.  What’s needed is for Americans to realize that not all Americans are covered, the quality of healthcare service varies widely across the US, and the price Americans are paying for healthcare is increasing each year at a pace far greater than the rate of inflation.

It is time to realize, “who’s in my pocket”?

Healthcare’s Inconvenient Truth

August 20, 2019

Democrats have been trying to make “healthcare” the 2020 Presidential election campaign theme.  “Medicare for All” and “Public Option” have been packaged as the banner the party should hoist against President Trump.  But for many, these words evoke fears of what they might be giving up if the Government is asked to provide healthcare for all residents.

To be sure there is no guarantee that an expanded “Medicare” healthcare system would provide trouble free healthcare for all.  Maybe the question should be “would Medicare for All be worse than the patchwork of private insurers currently providing healthcare”?  And, if America is such an exceptional country as so many conservative proclaim, why would it be that 20 or so other countries including Germany, France, the UK, Canada, and Japan provide excellent healthcare for all the residents at half the cost per person than the US?

In a recent Kaiser Family Foundation report, the average cost of healthcare coverage for a family of four was $22,900 per year.  Think about that.  The minimum wage of $7.50 yields and annual income before taxes of $15,600, and the proposed $15 per hour yields $31,200 (after paying healthcare insurance cost, where’s food and lodging costs?).

The Kaiser Family Foundation report also said the $22,900 cost had increased 56% from 2008! Do you know anyone who pay has increased 56% in 10 years?

There are clearly three issues with US healthcare,

  • what’s covered (like pre-existing conditions), 
  • who’s covered (universal coverage or only if one can afford insurance), and
  • cost (can someone afford the premiums, co-pays, and deductibles).  

Until the cost is addressed, what’s covered and who’s covered will drive up uninsured Emergency Room usage (which ironically drives up the overall healthcare costs further).

In a few words, healthcare is about providing healthcare services at world class cost, qualify, and availability.  That should be a banner all Democrats could run under.

Speaking About Life

May 12, 2019

On Friday, another pro-life protest broke out in Philadelphia.  The site was the center city “Planned Parenthood” office and as has happened so often in the past, pro-life demonstrators were “praying” and then “calling out” (respectfully they say) to strangers who appeared about to enter the Planned Parenthood office.  A Philadelphia State Senator happened to be present and went into a tirade against a pro-life mother and daughter telling them this was none of their business.  Bad form to be sure and not very smart since his tirade got onto social media and you guessed it, more pro and against people arrived.

Seizing the opportunity the Catholic Archbishop (Chaput), called out for protecting the unborn.  I wonder whether the Bishop was aware of the irony of his words.  The Bishop is someone who has stonewalled the investigations into priest child abuse and yet he feels compelled to speak out on women’s rights.  Hmmm.

There is no question in my mind that many pro-life advocates genuinely feel that abortion is wrong.  To this group the fetus is life and is destine to live in suburbia, go to great schools, and when an adult, saves the world.  Unfortunately, life is not that way.  Planned Parenthood deals mostly with middle class to the very poor Americans who lack the means and knowledge to prevent unwanted pregnancies, or sadly learn that the fetus is defective or likely to be a risk to the mother herself.

The Catholic Church speaks of love yet until very recently shunned LGBTQ community members and still speaks of them in “defective” terms.  Wouldn’t it be far more loving for the Church to welcome pregnant women and if the pregnancy is unwanted, to provide options including moral and accepting ways to end the pregnancy?

There should be no concern that “well to do” women will need the service of Planned Parenthood.  Abortions for the well off are safe and widely available if you have the money.  It seems life of the unborn is only a problem for the poor.  

Healthcare All Over Again?

March 29, 2019

Like a flash brush fire, the subject of US healthcare has blazed anew.  Dumbing the complex healthcare situation down, the President and loyal Republicans are chanting for the ACA’s elimination and good things will follow.  The President has promised the best healthcare ever, one with “pre-existing” coverage and no individual mandate.  Of course the President wants first the ACA repealed, or ruled un-Constitutional in the courts, and then… “trust me”… the GOP will introduce a beautiful new healthcare bill.  Hmmm.

The silver lining of this “bad dream again” issue is that there are compelling reasons to reopen the healthcare “can of worms” again.  The ACA represented an honorable, ethical, and moral effort to improve upon what existed in 2008 and provide access to basic healthcare for all Americans.  Republicans tell us that ACA is not so. 

The inconvenient truth about US healthcare (the current ACA or the version before ACA) is that

  • healthcare spending per capita is twice that of other developed countries,
  • does not still cover everyone (estimated 20 million more however), and
  • mediocre healthcare outcomes compared to many other countries.  (Healthcare available through institutions such as the Mayo Clinic, Johns Hopkins, Cleveland Clinic and most major University teaching hospitals are as good as there are in the world but those located in the suburbs, depressed inner city areas, and the rural areas across the country are not delivering on the highest standards. And, not to be overlooked, US healthcare is not affordable or not available to too many Americans.)

Affordability, and availability rise above the partisan solutions such as “Medicare For All”, “the replace of Repeal and Replace”, and “keep government out on my healthcare”.  There is no known credible reasons to justify current US healthcare cost and outcomes. 

  • Drug prices are non-negotiable for Medicare.  How is that possible? 
  • A growing number of Americans are learning that they can buy prescription drugs in Mexico or Canada the exact same medications they currently purchase in the US for substantially less.  Why would the Government not demand the best global price? 
  • Republicans have embraced private sector solutions built around private healthcare insurance. Let the insurance companies police costs, the GOP says.
  • Insurance is based upon pooling risks. .  So how can the GOP fight to eliminate the individual mandate? Without the individual mandate the insurance revenue pool will shrink.  In addition, individuals without insurance will go to Emergency Rooms where they will, by law receive treatment.   In essence, no individual mandate means a free pass for those who do not wish to buy insurance, cost everyone more, and makes everyone else a sucker.  How does this make sense? 
  • Estimates put US healthcare spending at 18% of the approximate US $20 trillion GDP (almost $4 trillion).  If the actual spending was on a parr with 20 other major world countries, there could  be $1-2 trillion savings each year extra for investment in infrastructure or paying off the national debt.  What are Republicans thinking?

President Trump and Republicans are disingenuous about healthcare reform.  Democrat candidates who are singularly focused on insuring everyone and overlooking the inexplicable cost differences with other modern countries are destined to make the GDP cost even larger.  The US deficit can not be reduced or brought under control without first dealing with healthcare costs.  Even more dangerous, in the world of income inequality, unless basic healthcare is made affordable for all, there is destine to be social upheaval.

Medicare For All

January 30, 2019

As the 2020 Presidential Campaign season begins to bud early, a few candidates are stepping forward testing the publics reaction to them.  Elizabeth Warren and Kamala Harris have amped their entries with the battle cry “Medicare For All”.  Two unannounced candidates, Howard Schultz and Michael Bloomberg, have dismissed “Medicare For All” as too expensive.  No surprise then that Schultz and Bloomberg position themselves as “centrists”,  Hmmm.

T0 be successful, the accepted theory seems to be the Democrat candidacy must be more than simply “anti-Trump”.  Democrats must be for something, not just against the current President.  Hmmm.

Healthcare is, for sure, a mess and capitalism is stinking up the house.  Morally, it would seem unconscionable that any reputable healthcare insurer could put forth the notion of “pre-existing condition” as grounds for not insuring someone. And the well worn line of “don’t put the government between you and your doctor” seems ridiculous if the other options is putting the insurance company between you and your doctor.  What are people thinking?

The public’s demand for transparency of medical costs touches on another evil.  Hospitals are unable (and unwilling) to put numbers on the table.  Hospitals claim that there are insurance company discounts which means the patient never would pay the hospital full charge (if the hospitals knew what their costs were).  Drug companies use the same thinking to justify their greedy price increases.

What cannot be denied, however, is that Americans spend, without universal coverage, more than twice as much as anyone else in the world.  And if anyone googles healthcare, one can quickly determine that in comparison to other first world countries, Americans pays twice as much and receives only mediocre healthcare outcomes.  (Of course those Americans who utilize the Mayo Clinic or similar world class health care center, pay the high prices but do receive outstanding medical care.  These world class medical facilities serve only a small slice of Americans).

Schultz and Bloomberg’s “Medicare For All is too expensive” reaction may be missing a point.  Health care today is already too expensive for the average American.  Harris and Warren’s off the cuff reply that the rich will have too pay is just as out of touch with reality.  In fact taxing the wealthy is sure fired way to stimulate even higher healthcare costs.  (Free enterprise just loves situations where there is a payer.)

Healthcare systems found in Japan, Canada, Germany, or France, for example, emphasize preventive care, cost controls, and largely a national sales tax to fund the healthcare system, not taxes on a single segment of society.  The national sales tax (value added tax) coupled with negotiated health care services and drug costs keeps “cost control” front and center, and reminds everyone that healthcare is not free.

The 2020 campaign season does not get into full swing until later in 2019.  Hopefully by that time the candidates will have sharpened their stump speeches and gotten real about what’s possible.   

Is Socialism A Real Fear?

January 20, 2019

Recently I got into a discussion with friends over what danger some of the new Democrat Congress members posed.  “Why that woman from New York wants free college education for everyone” one friend said.  “How is the country going to pay for it?”  The person added, “that woman wants to tax the rich to pay for it and that means we are going to have to pay more in taxes”.  Hmmm.

Where does one begin?

The friend making that statement probably lives in the 90th% income bracket which is about $150,000 in yearly income.  The couple probably have a pension, social security, and some income from investments.  They own a home and a vacation house.  They live comfortably but certainly not extravagantly.  Compared to average household income of $61,000, they are doing well.  So why the fear of free college?

My friend did not stop at having to pay higher taxes.  My friend quickly added, free college education would take the US to socialism.  And another friend said, “from socialism, communism was next.  And just look at Russia, Venezuela, and Cuba”  (I guess they had never visited China.)  Hmmm.

These two friends are both educated, well spoken, and otherwise reasonably charitable people.  From where could this disconnect from logic and reality come?  That’s a “foxy” question I think.

I wonder whether my two friends have thought why someone would advocate for free college education in the first place?  I wonder whether they realize that educated people are a resource just like rivers, roads, and electricity.  An educated work force drives prosperity.  In the US, unemployment, average income, and home ownership are all correlated to whether one has a college education or not.

Of course the likely reply would be, “I had to pay for my college education, so should the kids today”.  Hmmm.  I would quickly agree to that if there were options for kids to borrow at no interest the money to pay for their college education and depending upon what profession they chose or where they applied their college education, there were “forgiveness” provisions.  

In many respects, the free college education argument is a red herring with respect to the risks posed by socialistic regulations and laws.  And the connections between socialism and communism are faint if at all.  Socialism arises invariably to counter the excesses of capitalism.     Hmmm.

Most people are surprised to see how much in our daily lives is a form of socialism.  Public roads, libraries, and utilities are starters.  Social Security, the VA hospital system, and the host of consumer protection agencies are socialistic in nature.  All our discrimination laws, rent protection, and FHA loans in some way overcome excesses of unfettered capitalism and are a bit socialistic.

The question of why unfettered capitalism is not dangerous is deceptively difficult to answer.  Unfettered capitalism opens a world of possibilities for those who seek to succeed in business and accumulate wealth.   But given time, the entrepreneur becomes very wealthy and for most everyone else, life can become a little (or a lot) less good.  

In a wealthy country, like the US with abundant natural resources and protection from enemies by the Atlantic and Pacific Oceans, great wealth can be amassed though hard work and intelligence. Question… if all it took was hard work and intelligence, why would these entrepreneurs not go to the Sahara Desert or the North Pole and put their skills to work?  Capitalism’s success has a lot to do with the inherent natural resources, which in some way belong to everyone, and how these natural resources are harvested by the risk taking capitalist.  A hard working, risk taking socialist should be just as successful under similar circumstances, I would think.

But, one might ask, why aren’t socialist Venezuela and communist Cuba successful countries?

Does anyone think that if Venezuela or Cuba simply said “unfettered capitalism” is the way of the future, that life would change?  IMO, history has shown that all that would change is who the rich people were.  The poor would remain poor.  

There is no simple formula for accumulating national wealth.  Clearly abundant raw materials play a big role.  So does motivated entrepreneurs and an educated and skilled work force.  And, don’t forget “guns and butter”.  A country consumed with defending itself militarily will not have the time or ability to concentrate on economic development if it is preoccupied defending its borders.

With Venezuela and Cuba there is another factor which IMO outweigh all the others.  These countries lost their way when they cast aside “democracy”, rule of law, and free speech/free press.  Graft, corruption, and incompetent leader escape the natural consequences of their decisions when free speech and free press are suppressed.

One last observation.   Countries like Japan, Germany, France, the Netherlands, Denmark, or Canada all utilize more socialistic laws and regulations than the US.  None of these countries are teetering on the edge of communism.  And all these countries offer their citizens healthcare costs roughly 1/2 or less that the US with healthcare outcomes uniformly better.  Hmmm. 

The Common Man Quandary

December 16, 2018

“Americans want… (fill in the blank)”, Senator Leader Mitch McConnell and House Speaker Paul Ryan are prone to say.  “Americans have spoken and we are listening”, McConnell and Ryan chirp.  I often wonder just who those Americans are?

“Americans” is a clever way to mask who ever is the object of McConnell and Ryan’s words.  If you are informed and following Congressional debate, then it is clear “you” are the “Americans” McConnell and Ryan are speaking to.  The best part is that even if you have no idea what the debate is about, for example, you are just a “common man”, “Americans” means you for sure.  Most of America’s population resides in the common man category.

A Federal District Court Judge in Texas issued a ruling yesterday pronouncing the Affordable Care Act was now un-Constitutional, null and void.  What Constitution was he referring to since the ACA had already withstood two Supreme Court challanges?

McConnell and Ryan think the 2017 tax cut was just what “Americans” were looking for. The tax cut, however. gave most of its tax reductions to corporations and the very wealthy, and in effect, most “Americans” (who ever they are) were being played for suckers. I guess the notion that corporations and very wealthy people who were getting the tax breaks must be the “Americans” Mitch and Paul were talking about. 

But what about the “common man”?

The “Common Man” for the most part does not pay income taxes.  The “Common Man” earns too little to pay income tax although he pays other taxes like social security, Medicare, and sales and property taxes.  But the “common man” is in for a surprise.

The 2017 tax reductions zeroed out the tax on those who do not have health insurance.  Unbelievably, “Americans” who choose not to buy health insurance (even though they could afford to), and instead game the system by using the Emergency Rooms when they get sick, thereby allowing the rest of their fellow Americans to pick up the cost, have been encouraged and rewarded by the 2017 tax cut.  This bill contained language which eliminated penalty taxes on those who did not have health insurance.

But there is more. The “common man” is in for another treat.  The 2017 tax bill is unfunded.  That means the tax cuts are bringing in too little tax revenue to cover government spending.  Hmmm.  That means the government must borrow money and thereby increase the Federal debt level which at some time in the future, the “common man” or his children must pay back.  Oh, and as the debt grows, interest payments will squeeze out other government spending like fixing roads, bridges, etc and if Republicans have their way, the “common man” will receive less Medicare, Social Security, or any other government safety net benefits.

One need only look to France and the “yellow vest” demonstrations to observe what “Americans” might be in for given the current Republicans views on taxes.

Americans are mostly composed of “common men”.  The wealthy are few, so tax breaks for the wealthy means problems for others.  This makes it imperative that tax policies are carefully considered.  The wealthy can’t pay for everything but paying less than their fair share, especially in an environment of income inequality, catches the “common man” in a vice of rising costs and fixed income.  The “common man” is our society, and when our society breaks, bad things happen.

I wonder whether McConnell and Ryan are thinking this way?