Modern Medicine and Let Them Eat Cake Politicians

I finally received a bill for my open heart surgery in April.  See I’m back!

The bill for the initial surgeon’s visit and the operation is $20,280.50.  The five days of hospital stay are not included.  My bill for three-plus hours of surgery after Medicare and supplemental insurance: $50.50!!

What I pay monthly for insurance is $178.90 for Medicare and supplemental insurance plus $83.70 for prescription drugs.  This is deducted from my Social Security.  My wife pays the same amount.

According to https://resources.ehealthinsurance.com/affordable-care-act/much-health-insurance-cost-without-subsidy, individual coverage averaged $321 per month and family plans averaged $833.  The annual deductibles were $4,358 and $7,983.

To pay the individual deductible, a person would have save about $84/week or two dollars an hour.  For the premiums, a person would have to save about $74/week.  Together that is $158/week or $3.95/hour.  At a minimum wage of $9/hour, that doesn’t leave much for food and rent.  Without insurance, a year’s wage of $9/hour would not even cover the above bill.

And lots of politicians and millionaires think these individuals should be happy with what they get.  I don’t wish Marie Antoinette’s fate on these “let them eat cake” thinkers, but someday there will be a widespread realization that the people at the bottom of the economic are being taken advantage of.  Let’s hope they find better “champions” than Donald Trump and his ilk.

Republicans are all for choice except…

“Americans have choices. And they’ve got to make a choice. And so maybe, rather than getting that new iPhone that they just love, and they want to go spend hundreds of dollars on that, maybe they should invest in their own health care.”
Jason Chaffetz, Republcian Rep., Utah

But Republicans don’t want to give people much choice when it comes to transportation.  We should all rely on cars and planes.  Forget trains, buses, and subways.  They would rather build more and more freeways, taking away the tax bases of central cities.

The cost of a cell phone pales in comparison to cost of a car, even a decent used one.  Then there is all the gas, service, and parking places for it.

And the car has destroyed many a downtown because people prefer going where there is “free parking”.  But what is the cost of that free parking: rain runoff (filled with contaminants) and heat radiation.

And what is the cost of health care compared to a cell-phone.    We each pay $238 for medical insurance deducted from our Social Security checks.  We don’t pay anyway near that for our cell phone service.  And the iPhone that is not fully paid for costs only $16.67 per month.

And what is the cost to the rest of us for an uninsured person?  Companies should worry about people showing up sick because they can’t get afford medical care.  All of us should be concerned about somebody who doesn’t get care for a communicable disease.  Did you ever hear about Typhoid Mary who worked in food service?  See https://en.wikipedia.org/wiki/Mary_Mallon.  Although she never became sick from typhoid, she was a carrier who infected many of the families she cooked for.

Health care for all of us means better health for all of us.  True conservatives would want to keep as many people well as possible.

Medical care: Free market or fee racket?

Today I found some links to stories about those who have no insurance pay for medical care many times what Medicare would pay.  A trite example is charging more for a single over-the-counter pill than the hospital's own pharmacy would charge for a whole bottle.

If you have a few hours to gnash your teeth, read

"Bitter Pill: Why Medical Bills Are Killing Us", Steven Brill, Time, 2013-02-20

"Healthcare Isn't a Free Market, It's a Giant Economic Scam", Mike Masnick, tech dirt, 2013-02-22

Quote of the Day - Entitlements

"Social Security and Medicare aren't entitlements. They're subsidies to companies that do not sufficiently cover the health care and retirement needs of their employees."
- Gary Peterson, Letter, Star Tribune, 2012-11-24

But companies often more than sufficiently cover the health care and retirement needs of their executives.  See "Let's Look at Entitlements".

Can Gov. Chris Christie change the Republican Party?

I had my Jon Stewart dose of the day.  In http://www.thedailyshow.com/watch/thu-december-6-2012/exclusive---chris-christie-extended-interview-pt--2, Stewart tries to pin down Christie on why Republicans thinks it's alright for the Federal Government to pay for the aftermath of natural disasters but its wrong for any government to pay for health insurance.  For example, Stewart asks if having cancer and no health insurance is a natural disaster.

Christie spoke about how he tries to work with those with different philosophical ideas to come to some agreement.  I understood his meaning to be that one cannot take a rigid stand.

Will other Republicans follow his lead or will they consider him a RINO (Republican in Name Only)?

Let's Look at Entitlements

Political reporting is full of stories about the need to rein in entitlements, mostly meaning Social Security and Medicare.  Remember these are insurance programs for which people pay premiums.

Consider auto insurance.  Suppose you buy a car and buy collision insurance for it.  The day after you pay your annual premium of, say $1,000, you are involved in a crash that totals your car.  Is the insurance reimbursement an entitlement?  Of course it is.  Is it an unjustified entitlement.  Well, if you've been paying car insurance payments for years and never had a claim, you might think so.  It's your premiums that are giving the owner who had made only one payment the reimbursement.

The question with Social Security and Medicare is if enough premiums are being paid in to cover the payouts, not whether those who paid in are entitled to the benefits or not.  One can question the level of payouts but not the fact that payouts are made.

In both the auto insurance and Social Security cases, the recipients are not determining the benefits.  It is either the insurance companies or the Federal Government.

However, there are other benefits that are being determined by the recipients, not some "disinterested" second party.

Consider CEO salaries.  It is not an independent group of shareholders that are determining the ever increasing CEO salaries.  It is a board often picked by the CEO!

Consider board member salaries and fees.  Who determines that board members will get $100,000 plus for five or six board meetings a year plus expenses?  The board members!  Who determines the stock benefits given to executives and board members to "align their interests with those of the shareholders"?  It's certainly not the shareholders.

Consider the "golden parachutes" given to fired executives.  Do you think a laid-off worker would receive a few million dollars and lifetime high-value health insurance?  If the worker receives any benefits at all, they are often considered entitlements, especially if part of a union contract.  Why don't more supporters of "capitalism" recognize the golden parachutes as undeserved "entitlements"?

Consider that corporations depend on employees  and customers to succeed.  Employees are often treated as costs rather than investments.  Customers are often treated as annoyances rather than supporters and free advertisers.  And too often, executive pay is inversely related to customer satisfaction.  See "Executive Pay and Customer Satisfaction".  That certainly smacks of entitlement on the part of the executives.

Consider that the owners of professional sport teams strong-arm cities and states to provide a larger portion of their increasingly expensive stadiums.  They argue that the newer, bigger stadium will be an investment in the local economy.  I wonder how many of these owners are willing to pay for all the schools, roads, sewers, and so on that modern communities need and provide.  Oh, the stadium will pay for those.  That sounds like a multi-million dollar entitlement to me.

My guess is that the "entitlement" of Social Security puts more money into a local economy than all the corporate entitlements.  My guess is that the "entitlement" of Medicare gives a lot of support to the local health care facilities than all the corporate entitlements, plus the employees of those facilities spend a lot of their wages in the local economy.

In short, an entitlement is something others receive, we only receive what is due us.

A "real" Republican stands up

David Stockman was director of the Office of Management and Budget during Ronald Reagan's first term.  He wrote a sharp criticism of current Republican thinking in "Paul Ryan's Fairy-Tale Budget Plan", New York Times, 2012-08-13.

Among other things Stockman points out that for all the budget cutting in "entitlements", Ryan wants to fund the "warfare state" with a budget twice what Eisenhower thought was sufficient to contain the Soviet threat, adjusted for inflation.  Stockman writes that we have no real credible threat from any "advanced industrial state" and that Iran is benighted but irrelevant.

You might not agree with everything Stockman wrote, but you'll find his thinking is more in tune with reality than what currently passes for conservatism, that is, conserve the entitlements of large corporations and their "right" to raid the Treasury and the pockets of savers.

A little reason for the high cost of U.S. health care

Some months ago I injured my shoulder with repetitive activity.  After it didn't get better for several weeks, I went to my doctor about it.  As I signed in, I paid my $10 co-pay for the visit.  Even though he decided that it was only stressed tissue, he had me get an x-ray also.  Today, my insurance company sent me an "explanation of benefits".

The "amount you owe" is a $9.22 co-pay for the x-ray.

I have two questions.

First, why wasn't I asked to make a second co-pay at the time of my visit?  This also happens when I have the ultrasound check of my heart.  The cardiology department asks only for a $10 co-pay for the doctor visit, but I always get billed for a co-pay for the ultrasound.

Second, how much does it cost the clinic and the insurance company and Medicare to calculate all this, move the information among themselves, and mail me an "explanation of benefits?  I bet it is far more than the co-pay and probably a good chunk of the total cost.

The good side is that I have been getting this care without "prior approval", from the insurance company or Medicare.  Others are not so fortunate.  Read "Deadly Spin" by Wendell Potter.  Some might die because an insurance company came between them and their doctors.

Social Security checks didn't stay the same; they went down

This week we received our Social Security Benefit statements for 2011.  As predicted the "monthly amount" stayed the same, but the deductions went up!

Medicare medical insurance went up $74 per month and the Medicare prescription drug plan went up $4.60.  So, we'll each have $78.60 less every month to spend in the local economy.

We do have other sources of income, but we have saved those to use for big ticket items, like property tax.  For us, this decrease is an inconvenience; for others it can be a major blow.

I sent the above to Sens. Amy Klobuchar and Al Franken and to Rep.-elect Chip Cravaack.

Don't worry, insurance will pay for it!

How often have you heard this remark?  This leads many people to see a doctor for even small problems that may go away on their own.  This also leads many providers to not be cost conscious of the work they do, at least not as cost conscious if the patient was paying out of pocket.

People rarely ask the follow-up question: who pays for insurance?  The answer is that we all do, directly or indirectly.  If we pay the premiums directly, it comes out of our pockets.  If our employer pays the premiums, its money that could go into our pocket instead or its money that has to come from the price of the goods or services sold.  If the government pays, it comes out of our taxes.

Since there are so many payers of health care, there are no real controls on the costs.  So, no controls, no limit on costs.  Up and up they go.

For some more thoughts on this, see "What Happened to U.S. Health Care Costs?" Megan McArdle, The Atlantic, 2010-12-01.

She has an interesting graph showing how U.S. health care costs diverged dramatically from the costs in other countries.

Spending can be saving

Many want to cut government spending, sometimes even if would save money. The AARP Bulletin has a couple of good articles that highlight this problem.

See "Criminals Bilk Medicare of billions each year" online, "Busting Medicare Fraud" in print, November 2009.

Four years ago Congress turned down a request for $300 million to track down Medicare fraud. An inspector general said every dollar spent doing so would return $17. Hmm, so not spending $300 million cost $4.8 billion (300 x (17-1)). Million wise, billion foolish?

If crooks bilk Medicare, it's bad, but we don't want to spend the money to catch them. If businesses bilk Medicare, it's OK because these businesses contribute to our campaigns.

Medicare is being invoiced for wheel chairs on average four times the cost paid by suppliers. "Congress blocked attempts to impose competitive bidding." Hmm, competition is good for schools but not medical suppliers. See "The Case of the Expensive Wheelchair". Gosh, I thought it was bad that my daughter was charged twice the amount for contact lenses that the ophthalmologist paid. I wasn't supposed to know this, but I saw the invoice as the receptionist took the lenses out of the shipping container and put them in a package for my daughter.

Paying another generation's way goes both ways

"Making the young pay for health care", Michael Gerson, Washington Post, 2009-11-03, claims that the young are footing the bill for the health care of the old.

I would not call this a conservative argument against health care, but a simplistic view of transactions. It reduces all transactions to a willing buyer and a willing seller with no side effects (externalities). Very few transactions fit this description.

Most transactions have ripple effects that move through a community and even through an entire society. If I trade a vehicle in for a newer vehicle, an unknown seller now has a buyer for an unwanted car and an unknown buyer has a vehicle that he or she can afford. If I buy a new vehicle, I have indirectly created jobs for those who build vehicles.

Michael Gerson implies that the young are getting a raw deal because they are paying for the health care of older people who get sick more often. But he ignores many major benefits the young get from older people. Who paid for the roads, the bridges, the public buildings, the schools, and on and on that the young enjoy today? It would be impossible for the young to pay for these because they didn't have the money to do so or weren't even born yet.

How often have you heard a senior grouse about paying taxes for schools because he or she doesn't have children in school? But if seniors and other adults don't pay for schools, how are young people going to get an education to become doctors, engineers, lawyers, and on and on to provide services for older people?

So many transactions are of the "pass it on" variety. Many people don't expect tit for tat for small courtesies. Rather than accepting payment for helping a stranger, they request that the helped person pass it on by helping somebody else another time.

This is the actual situation of inter-generational payments. The old pay for the education of the young; the young pay for the health care of the old.

Besides, taking care of the elderly sets an example for future generations when the young become the elderly. Child to parent: I'm going to treat you just like you treated Grandma.

One of the many hidden costs of healthcare

Every month I receive a statement from the medical center we use. Part of me says to ignore it unless it says "Pay this amount". After all, why should I? The agent that sold us the Medicare supplement said, "You will never see another medical bill."

He exaggerated a bit because there are certain optional services that are not covered by Medicare, supplemental insurance, or other insurance programs. Like contact lenses. Insurance will cover glasses, but not contact lenses. At least for us who use them by choice.

In fact, optometrists offices will not turn over contact lenses until the patient has paid for them. I was surprised one year to see that the cost of contact lenses was passed on to Medicare even though I had paid for them. When I called the medical center office about this, I was told that they sent it on for deniability. I gave up trying to argue with a non-profit bureaucrat. Fortunately, this pass on has not occurred again.

However, the cost of the "contact lens evalution" is both not covered and not immediately passed on to the patient. It has run from $32 to $36 over the last few years. One year the medical center wrote it off before even charging me, one year I paid it after a few months without even being billed for it, and other years I wait until I'm billed for it.

On my July statement I was finally billed for the May 2008 contact lens evaluation. I paid the $35 without question. The cost for my May 2009 contact lens evaluation was carried forward on the June and July statements. The August statement is due in a few days. I bet the $36 for this year's evaluation will still be carried forward.

One of the marks of a successful organization is good cash flow. That is get payments due as soon as possible; then you have cash to pay your own bills and invest in new equipment, and so forth. $30-something may not be much in the big scheme of things, but how many of these little charges are floating around without being billed? How many larger charges are waiting on various non-profit, corporate, and government bureaucracies waiting for a judgement?

Here is the first place to "wring efficiencies" out of the system.