The Conservative Delusion on Healthcare

Discussion in 'Politics, Religion, Social Issues' started by vrDrew, Mar 16, 2017.

  1. vrDrew macrumors 65816

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    #1
    Prominent Conservative talk-radio personality Erick Erickson published an editorial in today's New York Times, laying out the Conservative case to not just "repeal" Obamacare - but "utterly abolish" it.

    What does Erickson mean by that?

    And that is the fatal misunderstanding, delusion if you will, that underpins pretty much all Conservative thinking on Healthcare.

    Free-market competition will not make healthcare affordable. It will not reduce the cost of healthcare.

    Erickson's idea is flawed on a number of grounds. The first of which goes to the heart of economics: The goal of the free-market is not to lower prices. The goal of the supplier in a free-market is this: Maximize profits. Nobody goes into business with the goal of selling products and services as cheaply as possible.

    Conservatives seem to think that providing healthcare is like making smartphones or PCs. It's not. And in actual fact, too much "free market competition" is precisely the reason mobile phone service in the United States is so much more costly than it is in most of Western Europe. Too many competing networks results in duplication of infrastructure. And that is one of the things driving high healthcare costs in the United States. Too many competing hospitals, too many competing MRI machines. And with all that excess capacity, investors, doctors, and patients inevitably find a way to use it - often in ways that are ultimately wasteful and ineffective.

    There are many more fatal flaws in the Conservative argument for a "free market" aproach to healthcare: The fundamental asymmetry of information between buyers and sellers. The fact that healthcare spending has virtually no relationship to individual choice (no one decides they are going to undergo Chemotherapy or cardiac surgery just for fun.)

    Until Conservatives abandon this dangerous delusion, we are doomed to a situation where a growing percentage of our population lives under the imminent threat of economic disaster.
     
  2. Desertrat macrumors newbie

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    #2
    Sure, maximize profits. But that's where competition among providers enters the scene. Can't charge higher prices for the same services that the competition offers.

    Without government favoritism in the marketplace, profit margins for large corporations tend toward an after-tax average around four to six percent. If you make less than that, it's not worth the effort. If you make more than that, other competitors enter the market.

    We survived before Obamacare, although as government increased its involvement in medical affairs, costs rose. (Even as late as 1984 I was paying $15 to $25 for minor-problem office visits.) I see no reason that the public at large wouldn't survive a total repeal.

    If nothing else, the idea of being forced to pay a $2,500 annual fine if you don't buy medical-treatment insurance is maggot-gagging. Evil. Bad-nasty product of diseased minds.

    Drift: There's no such thing as "health insurance". Health is an individual matter, involving such life-style features as tobacco, booze, balanced diet and physical exercise. Obesity, e.g., is voluntary.
     
  3. NT1440 macrumors G4

    NT1440

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    And why would the industry, which is dwindling in competition (mergers left and right), not just price fix? There is no ability for a small company to pose any threat, as no one is going to invest in a small health insurance startup, so why in gods name would we expect a small number of companies with outrageous amounts of power to not take advantage of the absurd amount of leverage they have?

    Do you people really expect bought and paid for corporate politicians, and the agencies being gutted by the GOP that are responsible for preventing such collusion, to prevent such behavior? If so, I've got some great swampland you may want to invest in.

    As for "individual matters", what say you on child cancer? What personally responsibility or "lifestyle features" do children partake in that should subject their life-saving options to the whims of for-profit companies?
     
  4. Eraserhead macrumors G4

    Eraserhead

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    Actually we have four interchangeable networks with national coverage.
     
  5. Desertrat macrumors newbie

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    #5
    The mergers occur because government laws/rules/regulations make it profitable to do so. Before such actions, mergers were few and far between.

    Enlargement of a corporation does not require much enlargement of executive staff/pay or clerical staff/pay. Overhead per customer is reduced. Many corporations, however, do indeed become top-heavy in management personnel and perks and thus degrade profitability. (Always a problem with a pyramidal hierarchy.)

    In general, any would-be start-up with a good business model has a chance of success.
     
  6. NT1440 macrumors G4

    NT1440

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    How.

    Explain this to me. Who in their right mind is going to startup a health insurance company, which would require billions in seed funding and years to set up networks and get off the ground, let alone turn a profit, when Aetna can just squash it like a bug. Explain to me how anyone with any business sense at all would invest in such a thing? It's an insane amount of risk with no payout for decades into the future. Who the hell would start that company?

    Mergers happen to consolidate power, thus increasing leverage to squeeze more profit out of the industry. How in the hell would you prevent such a thing when every member of the GOP is bought by this industry, or doesn't believe it should be regulated in the first place? Screaming "the government let it happen" doesn't mean jack **** when "the government" is those politicians owed by the industry in the first place.
     
  7. Mac'nCheese macrumors 68030

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    Letting insurance companies sell their plans across state lines will probably not help. Three states already allowed it and not one insurance company has jumped into the new markets. Also, an insurance company might offer lower rates in one state because medical care in that state is lower. If they are allowed to offer plans in a state with higher medical costs, they would have to raise their rates in that new market to cover the extra costs.
     
  8. NT1440 macrumors G4

    NT1440

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    That ACA already made it legal to do so....crickets from the industry. Why the GOP continues to lie on this point is beyond me.

    All a full rollout is going to do is exactly what happened in the credit card industry, they'll flock to whatever race to the bottom state allows them to get away with the most ****. South Dakota, in relation to credit cards, is a case study in this.
     
  9. Mac'nCheese macrumors 68030

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    Oh, thanks, I didn't know that.
     
  10. Desertrat macrumors newbie

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    NT 1440, thank you for making my point about government interference in the marketplace.

    I think back to January of 1963, when AG Robert F. Kennedy stated that any corporation with 50% of the market was de facto a monopoly. (At the time, GM had 53% of the US car market.)

    We see the M&A problem in the news media and in the telecoms: Ever fewer, ever larger.

    Where's Teddy Roosevelt when we really need him? :D
     
  11. vrDrew thread starter macrumors 65816

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    When was the last time you saw a list of prices for various services on the wall of your doctor's office?

    If your doctor tells you that you need a colonoscopy, do you go home and start calling around to find the best deal? And if DID do that, would you be able to explain why Clinic ABC might charge considerably more than Hospital XYZ? Is the lower-priced provider leaving something out (like the cost of the anesthesia or other medications that are usually part of the procedure?)

    That's ONE of the problems with the "free enterprise" approach to healthcare: Information Asymmetry. Regular normal people simply don't have, and can't have, the sort of information needed to make the sort of rational purchasing decisions we do for most other products and services.

    But getting back to the notion of doctors listing prices for various services: Even if they did do that, the "list price" they charged individuals who walked in off the street would inevitably be very different from the prices they negotiate with health insurance companies, or with Medicare and Medicaid.
     
  12. Huntn, Mar 16, 2017
    Last edited: Mar 16, 2017

    Huntn macrumors G5

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    #12
    Great post!
    As I've said previously, the GOP is up **** creek without a paddle, dispite hating government involvement in trying to control health care costs for average citizens, they've campaigned and lied to their electorate pretending they care, pretending that an unfettered market will lower costs, and that their plan will be better for average Americans whose primary goal is to have more income in their pockets today (not 10 or 20 years from now) and not be one illness from bankruptcy.

    The pesky problem is profits, the GOP's Golden Calf that they worship while trying to keep it hidden in the basement. And the real problem is an gullible populace who keeps voting these highway men into leadership positions. Forrest Gump's Mom said it best: Stupid is as stupid does.
     
  13. vrDrew thread starter macrumors 65816

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    Yes. But in Britain

    That, in a nutshell, is why British mobile phone plans are roughly 40% cheaper than US ones - despite all the "competition" we have in the USA. But just as having a half-dozen different, overlapping networks of cellphone towers and backchannel traffic cables adds greatly to the overall costs of phone networks, so too does having multiple "competing" MRI systems and walk-in clinics in the same small town add to the overall cost of healthcare in the US.
     
  14. A.Goldberg macrumors 68000

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    I'm not sure redundancy in healthcare is our issue. Currently MRI's are in very high demand- which is why many places start their MRI's at 6 or 7 AM and go as late as 10 PM. We definitely have a shortage of doctors. I think most hospitals would tell you they always feel like they could use more of things, not less. I had to have an MRI last year, if I wanted to get it at the local medical office, it was a 2 week wait. Going outside of that it was like 2 days.

    I think to some degree there is conflation the competition of insurance companies and the competition of healthcare systems. Two different concepts, but I agree Trumps plan to "increase insurer competition" is just nonsense.

    If you look at our current situation, massive hospital networks in areas are actually driving up costs. Take for instance Massachusetts- our biggest hospital network is Partner's Healthcare, which owns Mass General, Brigham & Womans, Boston Childrens, McLean Hospital, Newton-Wellesley Hospital, BW Faulkner Hospital, Cooley Dickinson, North Shore Medical, Martha's Vineyard Hospital, Nantucket Hospital, Spaulding, and some other entities I'm forgetting including at home and community care. Partners employs over 6000 physicians. Something like 30-40% of Massachusetts residents get hospital treatment within this non-profit hospital network.

    These hospitals (especially MGH, Childrens, B&W, McLean) are some of the best hospitals in the world with the best outcomes. With their massive marketshare they largely control pricing within the state, and sure enough they charge some of the highest prices in the state for services. If insurance companies don't comply with Partner's reimbursement whims, they will loose substantial business. Partners has singlehandedly been attributed to making healthcare much more expensive in Mass. Healthcare conglomerates are largely recognized as a major factor in driving up healthcare costs.

    I think massive hospital networks are a terrible, terrible idea- or even a single government entity. Look at the VA system! Some hospital networks are better than others, that's for sure.
     
  15. vrDrew thread starter macrumors 65816

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    I think you are conflating the use of MRI machines with their overall contribution to the positive health outcomes of patients.

    Want an example?

    I don't doubt, for a second, that the MRI machines in many US markets are in high demand. But that is because they are essentially a license to print money for the physicians and investors that own them. And because the people whose bodies slide into that scary looking metal donut are rarely the ones who are writing a check to pay for that service - there is essentially very little restraint upon the use of such machines.
     
  16. A.Goldberg macrumors 68000

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    Without a doubt there is an over utilization of some forms of diagnostic testing, ER resources, etc. But assuming we have millions more people insured we will need these resources.

    Overutilization of services should not be conflated with mega-conglomerates controlling the market. Hospitals tend to make a lot of money of their radiography departments.

    Look at how CVS and Walgreene have consumed the retail pharmacy market... buying up smaller chains and independent pharmacies. Then they both go off an form their own PBMs so they can dictate the terms of insurers in their favor. It's brilliant but it puts the competition out of business and allows them to make their own rules.
     
  17. vrDrew thread starter macrumors 65816

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    There is remarkably little evidence to suggest that a high ratio of MRI machines per million population results in positive health outcomes. Rather the opposite, in fact.

    France has about 12.5 MRI machines per million population. Britain has just over 6. The United States has almost 40. (And the cost of each MRI scan is several times higher, on aggregate, in the US than in either of those countries.)

    And yet, by almost every measure, people in Britain and France live longer, healthier lives than people in the United States.
     
  18. mrkramer macrumors 603

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    When you are taking your child or spouse to the ER are you really going to shop around for the best price before taking them in?
     
  19. A.Goldberg macrumors 68000

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    So the sole outcome of healthcare is MRI technology? Nothing to do with things like lifestyle, obesity rates, etc. You'll see that countries like France have considerable wait times... i.e. 30-40 days according to articles in the past couple years. NBD if it's a non life threatening condition, but quite unacceptable IMO.

    As I mentioned before, MRI's are a massive profit point for hospitals, which is why they charge significantly more than non-hospital clinics. This is usually a result of making up for non-insured patients who are unable to pay.
     
  20. BaldiMac macrumors 604

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  21. Eraserhead macrumors G4

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    Sorry. If you need an MRI scan in an emergency you skip the queue...
     
  22. A.Goldberg macrumors 68000

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    #23
    Yes, but waiting a month or longer is unacceptable. Usually people who have MRI's are not asymptomatic and are looking for answers.
     
  23. Dmunjal macrumors 65816

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    It's an argument against government involvement in health care.
     
  24. poloponies macrumors 68030

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    I have family in Scandinavia. Happier people than anyone I know here; they love the medical care they get and it's 100% true that they will give you expedited treatment if the situation warrants it. Sure, you may have to wait 60 days to get a consultation for you child's FREE ORTHODONTIA, or a few weeks for a colonoscopy, but they will triage patients and give you immediate attention if your condition demands it.
     

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