Short piece on health care costs

Cancel 2016.2

Cancel 2016.2

The Almighty
http://www.american.com/archive/2010/january/the-high-cost-of-no-price

"In 2008, consumers were only directly responsible for 11.9 percent of total national healthcare expenditures, down from 43 percent in 1965, according to new data from the U.S. Department of Health and Human Services. This means that someone other than consumers pays roughly 88 percent of all healthcare costs, giving consumers little incentive to mind costs and much incentive to over-consume."

... and we wonder why health care costs are increasing. The above highlights one of the big problems. (note: I am NOT suggesting or implying that this is the ONLY big problem... I am saying it is ONE of them)

*awaits dungs obligatory attack on the source rather than the point*
 
Superfreak said:
http://www.american.com/archive/2010/january/the-high-cost-of-no-price

"In 2008, consumers were only directly responsible for 11.9 percent of total national healthcare expenditures, down from 43 percent in 1965, according to new data from the U.S. Department of Health and Human Services. This means that someone other than consumers pays roughly 88 percent of all healthcare costs, giving consumers little incentive to mind costs and much incentive to over-consume."

... and we wonder why health care costs are increasing. The above highlights one of the big problems. (note: I am NOT suggesting or implying that this is the ONLY big problem... I am saying it is ONE of them)

*awaits dungs obligatory attack on the source rather than the point*
Click to expand...


I've seen the chart and I don't dispute the source. I only note that the bulk of the decrease in consumer spending since 1965 is in Medicare and Medicaid, not necessarily private insurance. While shifting the costs onto the poor and elderly would result in less healthcare consumption and lower costs, I don't think that the public would want the resulting negative health for the poor and elderly that would result.
 
NigelTufnel said:
I've seen the chart and I don't dispute the source. I only note that the bulk of the decrease in consumer spending since 1965 is in Medicare and Medicaid, not necessarily private insurance. While shifting the costs onto the poor and elderly would result in less healthcare consumption and lower costs, I don't think that the public would want the resulting negative health for the poor and elderly that would result.
Click to expand...

Source??? LINK???

:cool:
 
Superfreak said:
I did read it and it does not suggest what you did. So do provide the portion you think supports your statement.
Click to expand...


Just look at the chart:

Chart_1-11-10.gif


Medicare and Medicaid increases are substantially larger than private insurance increases.
 
NigelTufnel said:
Just look at the chart:

Chart_1-11-10.gif


Medicare and Medicaid increases are substantially larger than private insurance increases.
Click to expand...

They are larger percentage increases because they started from ZERO.

When you look at the decrease from 46% to 11%... a large portion of that is because people are paying less directly for their insurance and they are typically seeing low deductibles or small copays as the only out of pocket (at least that they see). You are correct that medicare and medicaid are also a large component, but in no way are they the BULK as you stated. There was a huge shift to the corporate plans after 1965. A shift from individuals paying entirely for their plans to the corporations paying bigger and bigger chunks. (that trend has obviously reversed as health care costs simply got too expensive for companies)

So, as the article states, as people pay less out of pocket at the time they go to the doctor, they tend not to pay attention to the costs. Nor do the doctors tend to tell them what the costs are outside of their copays.

Think of it like credit cards vs. cash. People tend to be more willing to spend $100 on a credit card than they are if paying with cash. It is psychological as they do not 'feel' the direct impact.
 
Superfreak said:
They are larger percentage increases because they started from ZERO.

When you look at the decrease from 46% to 11%... a large portion of that is because people are paying less directly for their insurance and they are typically seeing low deductibles or small copays as the only out of pocket (at least that they see). You are correct that medicare and medicaid are also a large component, but in no way are they the BULK as you stated. There was a huge shift to the corporate plans after 1965. A shift from individuals paying entirely for their plans to the corporations paying bigger and bigger chunks. (that trend has obviously reversed as health care costs simply got too expensive for companies)

So, as the article states, as people pay less out of pocket at the time they go to the doctor, they tend not to pay attention to the costs. Nor do the doctors tend to tell them what the costs are outside of their copays.

Think of it like credit cards vs. cash. People tend to be more willing to spend $100 on a credit card than they are if paying with cash. It is psychological as they do not 'feel' the direct impact.
Click to expand...


First of all, out of pocket costs does not include individual premiums for private heath insurance. It only includes co-pays, deductibles and items not covered by private insurance. Premiums are included in the costs of private insurance on this chart. With the explosion of growth of private insurance since 1965, naturally you would see an explosion in private health insurance expenditures on premiums alone.

Second, yes I am correct that Medicare and Medicaid have are make up the bulk of the shift. Private insurance expenditures (including premium payments) have increase a mere 12% since 1960 where as Medicaid and Medicare have increased 35%. That is the bulk.
 
Superfreak said:
They are larger percentage increases because they started from ZERO.

When you look at the decrease from 46% to 11%... a large portion of that is because people are paying less directly for their insurance and they are typically seeing low deductibles or small copays as the only out of pocket (at least that they see). You are correct that medicare and medicaid are also a large component, but in no way are they the BULK as you stated. There was a huge shift to the corporate plans after 1965. A shift from individuals paying entirely for their plans to the corporations paying bigger and bigger chunks. (that trend has obviously reversed as health care costs simply got too expensive for companies)

So, as the article states, as people pay less out of pocket at the time they go to the doctor, they tend not to pay attention to the costs. Nor do the doctors tend to tell them what the costs are outside of their copays.

Think of it like credit cards vs. cash. People tend to be more willing to spend $100 on a credit card than they are if paying with cash. It is psychological as they do not 'feel' the direct impact.
Click to expand...
I think the less people pay out of pocket compared to total expense is a factor in people not complaining too much about rising health care costs. But I do not think it is the reason or even a significant factor for costs going up. Health care industry profit margins are no better than any other industry type, so there is no indication they are taking some kind of unfair advantage of indirect sales. There are other factors involved with the way health care has shot through the roof, including, but not limited to people getting multi-million dollar settlements because their toenails were improperly trimmed, and government regulations adding several hundred million dollars to the costs of getting new drugs on the shelves and new treatments in the clinics.
 
Good Luck said:
I think the less people pay out of pocket compared to total expense is a factor in people not complaining too much about rising health care costs. But I do not think it is the reason or even a significant factor for costs going up. Health care industry profit margins are no better than any other industry type, so there is no indication they are taking some kind of unfair advantage of indirect sales. There are other factors involved with the way health care has shot through the roof, including, but not limited to people getting multi-million dollar settlements because their toenails were improperly trimmed, and government regulations adding several hundred million dollars to the costs of getting new drugs on the shelves and new treatments in the clinics.
Click to expand...

I certainly agree that defensive medicine practices (which stem from those lawsuits/awards) certainly are a major factor in health care increases. I also agree that health care profit margins are not any better than most industries and in fact are lower than average for S&P industries.

That said, the shift from individuals paying for their own plans (and thus having to qualify for the coverage) are without question a major factors in rising health care costs. The plan offered by my company has three options... one of which is the exact same plan I purchased individually. The company plan costs (which include what I would pay and the company would pay) are a little over 2.5 times the amount I pay for my individual plan. When you have guaranteed coverage... costs skyrocket... everyone pays the higher premiums to cover the worst case scenario. Given that the pressure was on to lower the deductibles and copays etc... that too put upward pressure on the premiums. People who do not pay directly out of pocket tend to go to the doctor more frequently than those who have to pay by the service. As stated, it is very similar to the credit/debit card vs. cash. People will tend to be less focused on the overall costs because they do not feel the immediate impact.
 
The price for health care is expencive because of the drug and insurance companies keep the price high. Its time to tell them no more price gouging.
 
wanderingbear said:
The price for health care is expencive because of the drug and insurance companies keep the price high. Its time to tell them no more price gouging.
Click to expand...

I will guarantee you one thing....

the profit margin of your MJ dealers is far far far higher than that of the insurance and pharma companies.

The profit margins of the industries are far lower than average.
 
Superfreak said:
I certainly agree that defensive medicine practices (which stem from those lawsuits/awards) certainly are a major factor in health care increases. I also agree that health care profit margins are not any better than most industries and in fact are lower than average for S&P industries.

That said, the shift from individuals paying for their own plans (and thus having to qualify for the coverage) are without question a major factors in rising health care costs. The plan offered by my company has three options... one of which is the exact same plan I purchased individually. The company plan costs (which include what I would pay and the company would pay) are a little over 2.5 times the amount I pay for my individual plan. When you have guaranteed coverage... costs skyrocket... everyone pays the higher premiums to cover the worst case scenario. Given that the pressure was on to lower the deductibles and copays etc... that too put upward pressure on the premiums. People who do not pay directly out of pocket tend to go to the doctor more frequently than those who have to pay by the service. As stated, it is very similar to the credit/debit card vs. cash. People will tend to be less focused on the overall costs because they do not feel the immediate impact.
Click to expand...
Okay, if I understand you, you are talking about one of the pressures driving insurance costs upward. And that is true. But consider that if health care cost themselves were not so out of control, people would not be so scared of facing the possibility of not being covered for every little thing.

I am focusing on the factors driving the costs health care itself through the roof, as I believe that is the crux of the entire health care crisis. IMO, almost every thing else having to do with our health care affordability crisis stems from the fact that there are uncontrolled factors driving health care costs upward at many times the rate of inflation can account for. If health care had stayed even with inflation the last few decades, we wouldn't even be bothering with this discussion.
 
Good Luck said:
Okay, if I understand you, you are talking about one of the pressures driving insurance costs upward. And that is true. But consider that if health care cost themselves were not so out of control, people would not be so scared of facing the possibility of not being covered for every little thing.

I am focusing on the factors driving the costs health care itself through the roof, as I believe that is the crux of the entire health care crisis. IMO, almost every thing else having to do with our health care affordability crisis stems from the fact that there are uncontrolled factors driving health care costs upward at many times the rate of inflation can account for. If health care had stayed even with inflation the last few decades, we wouldn't even be bothering with this discussion.
Click to expand...

It was a much larger factor as the shift occurred. We were discussing more the long term driver (meaning since 1965's Medicare/Medicaid). In the past decade (or two) it has not been as big of a factor as the chart indicates it leveled off.

As for what is driving it I agree with your assessment earlier. I believe the greatest need is to reduce the lawsuits (which should lead to lower malpractice premiums), then follow with making sure there is a reduction in defensive medicine (which combined with lower malpractice premiums should reduce the health care bill). Reducing the health care bill in turn should see a reduction in individual (or group) premiums.

In addition to the above, we as a country need to get our obesity rates going back down. It is insane how unhealthy we are and how we continue to get worse. We need to have a greater focus on how to eat healthy (no matter the budget) and introduce a wide variety of ways to get exercise.
 
You must log in or register to reply here.
Back
Top