From: fyl@fylz.wa.com (Phil Hughes)
Newsgroups: pnw.general
Subject: Re: Trust Me - I'm from the Government to help you
Date: 9 Jan 93 18:10:08 GMT
Organization: FYL
X-Newsreader: TIN [version 1.1 PL6]

Walter Bright (bright@nazgul.UUCP) wrote:
: In article <1993Jan07.183331.2421@ssc.com> fyl@ssc.com (Phil Hughes) writes:
: /The more I read the more I realize people just don't understand how a
: /single-payer health care system works.  It has nothing to do with having
: /the government "responsible" for health care.  It only has to do with
: /how the bills are paid.
: 
: Whoever pays the bills pulls the strings. If the gov't pays the bills, the
: gov't calls the shots, and is responsible. I don't see how this can be
: separated.

And right now private insurance companies pay the bills.  I would
rather not think of them as "responsible" for health care.  They are
responsible to their stock holders and their mission is to maximize
corporate profits.  There is no way that can be in the best interest
of someone who needs health care.

: /Yes, I know the government doesn't know how to do that but look at
: /the alternative.  Right now there are thousands of insurance companies
: /in the business of providing health care insurance.  They are all in
: /the game to make a profit.  Their business expenses are those of
: /processing claims plus marketing -- convincing the consumer that they
: /are better than the next plan.
: 
: This is not different from any other free market industry. The interesting
: question is why is this a problem for health care, but not for others
: (like bread?). Wasn't it Karl Marx who postulated that "profit" was the
: excess of what was charged for over what the worker produced, and therefore
: the profit was essentially stolen from the worker?

Much different.  Bakeries make and sell bread.  There is a free
market.  Quality, location and price dictate their sales.  This is
true as well in the health care *provider* industry and it pretty much
works.  The difference is that the health care *insurance* industry
doesn't provide care.  Their only business is offering overhead; much
the same as any insurance.  This would be similar to you buying "bread
insurance" and then, every time you wanted a loaf of bread you went to
the bakery and had them bill your bread insurance company.  Yes, there
could be competition among the insurnace providers but the goal of
each one would still be to maximize their profit, not make sure you
had bread.

The obvious question is, why is insurance ever desirable?  The answer
is to distribute to costs.  Whether it is a car accident, your house
burning down, something stolen or health care, the person buying the
insurance can't come out ahead.  An individual may come out ahead but,
over all, more money (both payments to companies and any profits the
companies make from investments) goes in to insurance companies than
is returned in the form of insurance claims.  With this in mind, if
you want insurance, there are two things you need to do:
   1. minimize the overhead of providing it
   2. maximize the size of the insured base

The reason for #1 is fairly obvious.  Number 2 can be debated.  After
all, if you are an insurance company and you manage to provide
insurance to those that don't ever use it, your costs are lower and
thus the rates for your customers are lower.  Auto insurance companies
do this.  But it is still to their advantage to get the largest number
of these low risk ratepayers so a claim has the minimum impact on the
costs to all.

: /Add to these overhead costs the fact that each health care provider
: /(doctors, dentists, hospitals, etc) have to deal with thousands of
: /different claim forms and procedures.  Thus, doctor's offices spend
: /more time dealing with claims that in patient contact time.
: 
: Last time I did my taxes myself I lost faith in the idea that the government
: can reduce paperwork costs.

I doubt you would find it easier to submit a tax form to 100 or 1000
agencies instead of only one government agency.  This is essentially
what you are asking the health care provider industry to do right
now.

: /Compare this to Canada.  Each province has one "insurance provider" which
: /is the provincial government.  Thus, there are no insurance company profits
: /and there is only one claim form.  The processing cost of these claims
: /is around 3% (vs the 25% in the U.S.).
: 
: The idea that the government doesn't make a profit, so things should be cheaper
: is a seductive one. The Soviets tried it for 70 years. The reality is that
: the government not only doesn't show a profit, it runs a horrendous deficit,
: due to bureaucratic inefficiency and the priority of pork over practicality.

Ok, as I asked before, offer a better alternative.  I see no way that
adding another level of overhead in paying health care providers can
keep costs down.  Right now the insurance providers in the US only
have an incentive to maximize their profit.  Yes, there can be
competition but as long as their part is only overhead (they don't
provide service) you are not going to have any real competition.

: /Additional savings come in the form of one "insurance company"
: /negotiating with the providers on rates.  It must work as Canadian
: 
: And what is the incentive for the *single* insurance company that is
: guaranteed a monopoly? You have all the evils of a monopoly here.

I offer Seattle City Light vs. Puget Power as a local answer to this
question.  Seattle City Light is owned by the ratepayers, Puget Power
by the stockholders.  You could consider both a monopoly.  Compare the
rates.  Seattle City Light, even thought it is government, provides
better service at lower rates.

: /doctors get paid less than U.S. doctors.
: 
: I imagine that this can cause a "brain drain" of the better doctors
: emigrating to the US. Of course, one can resort to putting a wall
: around Canada to keep them in...

This question was asked at the talk I attended.  First, there are more
doctors graduating from med schools in Canada than they need.  Second,
doctors get paid more in the US than anywhere else.  Thus, if the US
established fees similar to Canada doctors would have no where to run
to.

: /Now, does this confilct with free enterprise?  No.  Canadian doctors
: 
: Yes. Legal monopolies are not free enterprise.

You ignored the point.  First, I was talking about health care
providers.  Doctors still work for themselves.  There is no monopoly
in the health care provider industry.

Second, the government does not have a monopoly on providing health
care.  Private insurance companies can, if the so choose, operate in
Canada.  The catch is that everyone gets basic health care and it is
paid for with "everyone's money".  But, if the Canadian "insurnace"
wasn't covering what is needed people are free to buy additional
insurance.  The fact that they don't supports the argument that
apparently the system provides what is needed.

: /are paid fee for service, just like in the U.S.  They pick what they do,
: /patients can select their own doctors and they can pick how much they
: /want to work.  The only limit is that they can only charge the fees
: /they agree to for a particular procedure.
: /The major saving is in elimination of th 25% overhead for someone who
: /has no interest in your health.  They are strictly a middleman.
: 
: I submit that the government has no interest in my health either. Only
: *I* do, and I want the freedom to be able to hand my dollars to whomever
: I choose to for whatever procedure I choose to for my health.
: I don't want my health chosen for me by 43% of the voters who don't know
: or care about me.

Again, you are ignoring the point.  The government is not providing
health care, they are paying the bill.  What you get done to you is by
agreement between you and whomever doctor you select.  The only "rule"
related to this is that you must be refered to a specialist by your
general practicioner.  The bottom line (as the Canadians on the panel
stated) is that in Canada the people see health care as a right and
                -----------------------------------------------
have therefore established a system to make sure everyone has it.

: /Are there waiting queues in Canada for service?  Yes.  Why?  Because
: /there is a fixed budget.  But that budget is substantially lower per
: /person than in the U.S.  Thus, the queues could be shortened or eliminiated
: /(not necessarily a good idea) and the cost would still be less than in
: /the U.S.
: 
: Why are long lines a good idea? A citizen waiting in line is not productive.
: I forget how many hours/week Soviet citizens waited in line, but it was
: so much it was obvious why the workers were less productive.

I didn't say anything about lines.  I used the word _queue_ only to
indicate that you may not be able to, for example, see a specialist
about something immediately.  Emergencies are treated as such but
there may (and probably will) be a wait for a procedure that is not
dealing with a life-threatening problem.

: The vast experience in socialist countries is that if you artificially set
: the price low, then the customers pay anyway in a combination of:
: o	Inferior service
: o	Long lines
: o	Heavy infusion of taxpayer dollars

Do you keep offering Soviet anecdotes because you see some connection
with Canadian Health Care and Communism?  Study the Canadian model.
Talk to people who have been covered by the Canadian system and the US
non-system.  Most people who have experienced both will pick the
Canadian system.  Again, we are not talking about decreasing service,
we are talking about decreasing overhead.

: /I suggest that rather than bitch about single-payer that you offer
: /an alternative.  Personally I can't see a better answer than pretty much
: /what is is Canada.  If you can, fine, present it.  But I am reasonably
: /sure that offering any solution that includes a parasite that eats up
: /about 25% of all the money is going to be better or cheaper.
: 
: Any product you buy on the free market has maybe 25% of its cost wrapped
: up in marketing, many go as high as 60%. These products are *still* cheaper
: and better than those produced by nationalized industries.

But the health insurance companies are not providing the service, the
doctors are.  For the umteenth time, we are not talking about
*national health care*, we are talking about *national health
insurance*.

: Ok, here's some ideas off of the top of my head:
: o	Put a lid on tort awards.
I don't know what is reasonable here or what sort of percentages
we are talking about.  I don't believe that Canada has a limit but
I am reasonably sure tort awards are lower.  This should be
investigated.

: o	Change the mission of the FDA from:
: 	"Treatment shall be safe and effective"
: 	to:
: 	"If the treatment is not recognized by the FDA as safe and
: 	effective then the patient must be so informed and must
: 	specifically authorize its use"
Basically I agree with this but don't really see how this is going
to make a cost saving.

: o	Remove the monopoly power of the AMA to restrict the number
: 	of physicians.
I would expect that having more doctors would increase, rather than
decrease, average medical costs.  Not that I am a fan of the AMA but I
expect that doctors would "discover" all sorts of additional things
that people "should" have done.

: o	Make health insurance and medical expenses fully tax deductible.
Sounds like Socialism to me.  And, again, it doesn't reduce the cost
of anything, it just changes who pays the cost.

: o	Toss the idea that all are entitled to the best health care that
: 	money can buy regardless of cost and individual irresponsibility.
Canada did this and Oregon tried.  I agree that we need to look at the
number of health care dollars as a pool from which to get the most
benefit.  And I think reducing the insurance claim overhead from
around 25% to less than 5% would be a good start.

: Note that the American health care system is a semi-socialized system
: already, so I wouldn't be so quick to blame all its faults on the half
: of it that is free.
: 
: I also note that you live in America, not Canada.

If I lived in Canada I doubt I would have much interest in attemting
to improve the American system.  As a resident of this country I feel
that improving our health care system is in my best interest.
-- 
Phil Hughes - FYL - 8315 Lk City Wy NE - Suite 207 - Seattle, WA 98115 
Phone: 206-526-2919 x74      Fax: 526-0803
E-mail: fyl@fylz.com or nwnexus!fylz!fyl