Unagidon is the pen name of an executive from the insurance industry who writes on heath care costs among other things. The following articles are relevant to the area of heath care and capitalism. The first is a fine overview but each of the others develops some aspect of the puzzle.
WHY HEALTH CARE WON'T BE A FREE MARKET
Health
care will never become a true free market—
it
lacks both price and quality transparency.
1.
Insurers and providers collude to keep the public in the dark about cost: Commercially insured patients pay, on
average, about 145 percent of their costs, i.e. they are subsidizing Medicare,
Medicaid and “charity” patients..
2.
Commercially insured patients are subsidizing the other person’s choice of
hospital as well as their basic treatment. Any attempt to find a cheaper
service has no effect at all on the total price.
3.
Big expensive hospitals are buying smaller, less expensive ones, and apply
their big-hospital expensive contract rates to the acquired hospitals.
4.
Co-pays and out-of-pocket expenses are going up to try to offset premium
increases to employers..
5.
We have an (unfunded) law that requires emergency rooms to treat anyone whether
they have money or insurance or not. There is no “free market” for ER services and never
shall be because no one price-shops for an ER.
Unless
we allow the sick to die in the streets, we all end up paying for everyone, one
way or another. We can do so inefficiently and expensively, the way we do now,
or efficiently and inexpensively, the way every other developed country in the
world does.
Why
corporations have such high administrative expenses:
1." Most large national or multi-national corporations are typically made up of a
bunch of smaller corporations, especially if it's an insurance company. My insurance company was made up of over a
hundred. Each corporation was also regulated separately, filing a separate set
of quarterly and annual financial statements to their home state."
2.
There are always problems, and extensive time is spend in dealing with them: "the
main focus was to decide 1) who to blame and not blame and 2) who was going to
get the credit for fixing the problem.
Actually fixing the problem was also somewhere in the agenda. Everyone
wants stuffed fixed. No one wants to
take responsibility for it. People want
credit without doing the work. People
move away as far as they can get away from anything that could go wrong. In a very large corporation, this takes the
form of creating Very Large Meetings, so that one has plenty of forest within
which to hide."
"We
could radically cut costs if we could figure out ways of simply eliminating
corporate and departmental politics from the corporation." The market to which
managers are responding is the internal one not the external one.
Stock
prices of corporations rise even when there are cases of poor management. That is because the management of the
corporation is completely separate from ownership. The stockholders want more
money but they don’t want risk; therefore the modern CEO produces a prediction
for each quarter, and then makeS sure that the corporation makes it.
“What
is at risk for the professional corporate manager is his personal success,
which means promotion and better access to the trough. Actual business failure at a corporate level
is bad, but in my experience at least, when it happens it seems to take
everyone by surprise. Even if it affects whole sectors.
In
theory, the ‘owners’ of a company should be able to fire the managers. But the chances of this happening is tiny,
unless someone does something so bad that it gets out to the general
public. The bigger risks inside the
company is someone getting blamed or someone not getting the credit. This is how it works.”
"Most people think they know what
"pre-existing condition" meant.
But it was far worse and more complicated than most people know. The pre-existing condition problem was part
of an overall underwriting philosophy that covered both individual policies and
small groups (defined as 2 to 50 employees).
The Affordable Care Act not only eliminated pre-existing conditions as a
means to deny coverage, it eliminated the underwriting of small groups, which
had been underwritten in a way that carried the pre-existing condition
philosophy into the commercial group market itself. "
“Death
spirals are very rare insurance events that require something to happen that
causes relatively well people to withdraw from an insurance plan, leaving most
of the truly sick behind. The spiral comes when the insurance company raises
prices in order to pay for this greater proportion of sick people, and this
price pressure causes even more of the healthier people to leave the plan,
which then causes another sharp price increase, followed by more attrition, and
on and on until it’s time to lead old Rover out into the woods for that last
walk.”
“
First, pollution is not an imaginary thing, and pollution abatement is actually
a legitimate cost of production. Second, and more importantly, if pollution
abatement does not enter directly into the price of something, the producer has
no incentive to innovate in the area of pollution abatement to keep prices down
and obtain a competitive advantage. In the absence of regulation, things that
do not enter into price do not enter into the market.”
"Why
should we care if the GOP allows insurance companies to ignore
regulations? There are two general
differences between regulations from state to state..... The first is that
different states require different things to be covered. A big part, if not the major part of the
Republican agenda is to pare down the number of things that Obamacare now
requires to be covered. The other main difference between the states'
regulations concerns the amount of capital reserves that a company must keep on
hand in case it goes bankrupt. One does
not want people to be left holding the bag during treatment through no fault of
their own. "
"The
Republicans are after two pots of gold. First,
Ryan has his eyes on both the Medicare and Social Security programs as sources
of revenue for funding the stock market The other big pot of gold is all that
retirement money that your hardworking grandparents (or you, for that matter)
socked away all these years, plus all their physical assets. The medical system
wouldn't propose balance billing for Medicare users if they didn't think they
could acquire massive profits out of it ".
If you look at the right you will find a Filter by Topic including 39 on the economy and 22 on health care.