From: DGS4@psuvm.psu.edu
Newsgroups: alt.politics.bush
Subject: Re: Bush/Quayle's Health Plan -- vouchers?
Date: 12 Sep 92 12:39:46 GMT
 <1992Sep11.183305.27890@CSD-NewsHost.Stanford.EDU>
 <92255.161842DGS4@psuvm.psu.edu>
 <1992Sep11.233217.2784@CSD-NewsHost.Stanford.EDU>
Organization: Penn State University

In article <1992Sep11.233217.2784@CSD-NewsHost.Stanford.EDU>,
andy@SAIL.Stanford.EDU (Andy Freeman) says:

Again, I've deleted some earlier posts to try and reduce the clutter....D

>>The problem is that if providers only accept ANOHC, then you have a
>>single payer system.

>ANOHC isn't necessarily single payer, although it may well have some
>providers who choose to be ANOHC-only.  The distinction won't matter,
>as we'll see below.

>>If not, then ANOHC will either go bankrupt or
>>it will become Andy's Just Like All the Others High Overhead Health
>>Care.  If the provider wants to treat patients from multiple payers,
>>then the provider and payer must set up a system to track patients and
>>their payers.  That is what causes the high overhead.  It becomes even
>>more costly when each system is different.  Any payer who does not
>>set up an administrative system to track patients is in danger of
>>being gamed by the other payers and providers and will go bankrupt.

>ANY payer has to keep track of what's done, if it pays on that basis.
>The Canadian system seems to fit that model; it doesn't pay a fixed
>salary, but reimburses MDs on the basis of what they've done.  (I
>"remember" that the Canadian system allows private payment too, so it
>has to keep private payers from shifting costs to the govt.)

No, A Canadian doctor knows that 99% of his business comes from one
payer who uses the same forms.  Other private payers represent such
a small portion of a physician's business that he/she can determine
the payment methods.



>The only overhead for treating ANOHC-customers is the Canadian form.
>The only "extra" overhead is the "is that a ANOHC-customer?" query.

But, the Canadian form is different from every other insurer's form.  It
requires the physician to train personnel, to staff his office with
extra clerical hours, to fill otu this form for all ANOHC patients.


>>It does matter, if the provider is accepting patients from other payers
>>and Andy wants to identify his patients from other patients.
>
>The Canadian system has the same problem; ANOHC will use the same
>solution.

No, it doesn't.  There is a big difference between a system where 99% of
payments flow to one payer and one where 40% flow to 50 Blue Cross/Blue
Shield plans, 30% flows to 3,000 commercial insurance companies, and
30% flows to 1,500 HMOs, PPOs, or a number of self-insured employers.
If you can't see that difference, then I'm at a loss.

>>Even those predictions have been off by several hundred dollars in
>>when they have been made less than 6 months into the future.
>>Mistakes of that size spell bankruptcy for an insurer.
>
>Yet, those evil insurers aren't going bankrupt in droves.  They
>can't both overcharge and lose money....

Well, I guess I'll have to send you the article I took from Businees
Week several weeks ago.  Several major insurance companies are getting
out of the health lines.  Jon Gable recently had an article in Health
Affairs which showed that only once in the last 6 years have profits
been positive in commercial health insurance.  Health insurance has long
been the least profitable of insurance lines, often provided to an
employer because it was necessary to do so to get the more profitable
life insurance contract.

Insurers are not over-charging.  They are giving Americans the best
insurance that can be provided in a multiple payer system we've set up.
If we want better insurance, we have to change the system.


>What?  They have controls that work?  Then why won't they work
>in the US?  If they won't, then we've found why the Canadian
>system won't work in the US.  If they will, then ....

Because we have a multiple payer system.  Go to a single payer
system and you'll find that it will work in the U.S.

>>Explain to me how you are going to "channel money to providers" without
>>keeping track of when your insureds visit providers, what care was given,
>>how much it costs, etc.  Explain to me how you are going to have no
>>overhead when you have to mail checks to 700 different physicians every
>>month.
>
>Just like the canadian system does.  There's nothing about the
>canadian system that depends on using tax revenues and it has
>to deal with other payers.

Well, there is one good reason why the Canadian system relies on taxes.
It's inequitable to charge sick people more than healthy people, especially
when income and health are so closely related.  That's what the American
risk rating system does.  While I'd prefer a system financed by income
taxes, I'd accept one with community rated premiums.


>>Explain to me how you are going to have no overhead when you have
>>to market your plan to consumers.
>
>That's not going to be significant if the savings are as promised.

I'd suggest you tell that to the typical insurance company that spends
5% on marketing.

>>Will you keep no records of how your
>>insured have used care?  Will you keep no record of how close they are
>>to meeting deductibles or maximum benefits?  In a typical 10-20 person
>>pool private health insurers tack on 20% just for administration and
>>another 8-10% for risk.  THose drop to 4 and 1 percent in a group of
>>10,000

>Yet, the canadian system deals with these same problems, and it
>either has group size 1 or group size equal to the number of
>customers.  ANOHC will work the same way.  If that doesn't
>work in the US....

I really am confused.  You seem to be saying "If administrative costs
are so easy to get rid of, why doesn't an insurance company just do
it and wipe out the compeition."  The point is that in the U.S the
administrative costs are the result of 10,000 insuring agencies times
6,000 hospitals times 600,000 physicians.  In Canada the costs are 1
insuring agency times # doctors times # hospitals.  Yes, Canada has
some private insurers but they pay for such a negligible amount of care,
that you don't set up a whole elaborate administrative system to deal with
them.  One clerk working part-time can do it.  No individual insurer can
simply make overhead disappear, unless they can make all other insurers
disappear.  If you don't see why that is true, then I'm not sure where
this discussion is headed.


Dennis G. Shea, Penn State
<<DISCLAIMER>>
Ain't nobody's bizness but my own. I'll be happy to accept all
the credit for anything I've written.  It's funny, however, how
employers only acknowledge the profitable ideas.
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