By leelefever on August 17, 2009 - 9:12pm
We often get requests to make a video about healthcare reform. Unfortunately, it's a subject that's very fluid - by the time finished a video, it may be out of date.
Thankfully, our friend Dan Roam (who wrote the book Back of the Napkin) has stepped up to the challenge and created a simple way to explain healthcare/insurance reform. Check it out:
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Nice Explanation, but...
Nice explanation, I suppose this is a more political thing. Hmm, insurance loves this but the business doesn't: preventative medicine. About eating healthier foods, finding exercise/physical excretion that could actually be fun (remember sports?), stress reduction techniques, getting enough sleep.. etc. But how to actually get lots of people to do that? It will take some creativity, but I sure think it's worth the money.
A little levity
Not to minimize the importance of the debate, but did anyone notice the typo above "...exercise/physical EXCRETION that could actually be fun"? Perhaps that was a Freudian slip...or not...
Prevention isn't just "eat
Prevention isn't just "eat healthy and exercise." I'd also suggest practices such as looking both ways when crossing the street, following traffic rules, and keeping common sense in mind when using sharp objects or electrical appliances.
If only your analysis were true
Sorry Dan Roam but you've got it wrong. Health insurance is expensive because health care is expensive. It is easy - and politically correct - to demonize the insurance companies but they are not the reason that Medi-Care is going bankrupt in 8 years. The US government has many single payer plans: Medi-Care(for seniors and disabled people); MedicAid (for the poor); SCHIP (for children); Tri-Care (for the military); Veterans Administration (for Vets): Federal Employee Health Plan (for federal workers) - and ALL OF THESE PLANS ARE GOING BROKE. The failure of these government plans is not the fault of insurance companies. It is because health care costs too much. You seem to think government is the answer - which is great until they run out of other people's money to pay for their expensive systems. It is the cost of care that is the problem - not who pays for it. You should put that on a napkin.
BIG government = BIG cost
You have gotten to the root of the health care cost problem here as you point out the coming demise of costly government programs. I fully agree - I'm in a couple of them!
I recall, when I was a young lad back in the late 40s & early 50s, that we went to the doctor and paid him with cash from dad's meager salary. It worked very well.
Then in the late 50s the government crept in with Medicare. Costs began to go up. Both we and the doctors were burdened with buearacratic rules and requirements, and healthcare has deteriorated ever since. Physicians, who used to be dedicated servants of a healthy society, became business men looking for profit. Bid pharma sprang up and told doctors not to give us vitamins but instead statins and NSAIDs and other profitable inventions which caused nearly as many health problems as good. And, yes, insurance became a mega business.
Now if the government had just left us to pay our doctors in cash, and our doctors had kept improving health instead of treating symptoms and being shills for big pharma, we wouldn't be in this mess.
My analysis is true to the debate on the table
Sorry Bruce, but you miss the point of my napkins. I didn't begin by deciding I wanted to advocate any particular point of view; I began because I wanted to understand what the various parties were talking about. As I *read the legislation being proposed* and *listened to the perspectives of the debators*, certain themes emerged:
First: the reform being proposed has very little to do with health care and very much to do with insurance companies. That's not my point of view; that's simply what's contained in the legislation.
Second: private health insurance companies are primarily answerable to one constituent group: their shareholders. These companies exist for only two reasons: to keep costs down for their members and to keep profits up for those investors. That's it. They've failed at the first but continue to do well at the second.
These are not my analysis; these are the facts that anyone looking at the elemental pieces of the puzzle would see.
As public options continue to be removed from the table by the White House, it is these private insurance companies who stand to come out of this in the best financial position. This is exactly the opposite of the original intent of reform. According to this week's issue of BusinessWeek, "The insurance companies have already won... and stand to make trillions of dollars as all Americans are obligated to become their customers... with no public option of any sort."
That this has happened again, (as it did under Teddy Roosevelt in 1912, Franklin Roosevelt in 1934 & 1938, Kennedy in 1962, Nixon in 1971, and Clinton in 1993) attests to the remarkable power these few private insurance companies have to shape the debate to their own terms.
I have worked as a consultant with private insurance companies in the past, and I can say that in my experience they are more secretive in their processes and more effective in creating intentionally difficult language than the medical profession, the technology industry, or the armed forces.
Insurance companies may be bad but government is worse
Dan, every company must make a profit or it goes out of business - including your company. That you make a profit does not make you a bad person - nor insurance companies evil.
The reason for health care reform is that the cost of health care is out of control - government can't control it and rapacious insurance companies can't control it.
Look at Medicare and Medicaid. Both are single payer, government run systems. No insurance company is involved. The cost of both is unsustainable. That is why this is a national crisis.
Look more closely at Medicare and you will see that it is a giant Ponzi scheme: currently employed people pay for the retirees. Once baby boomers retire the system will collapse. Also, the Medicare tax is 2.9% (1.45% employer/ 1.45% employee) of every dollar a person earns his entire life. Multiply 2.9% times 50 years of work and each American works more than ONE ENTIRE YEAR for Medicare. If a person lives to age 65 and is able to receive benefits, he/she then sees how little Medicare pays: Part A $1068 deductible for the hospital; Part B requires people to pay more in premium plus has a $135 deductible and only covers 80% of costs - with no cap on a patient's liability; no Rx unless you pay more for Part D which has holes in coverage. Medicare recipients must purchase a supplemental policy from a private insurance company to close all of the holes in Medicare - despite paying a huge amount for this government run program.
Look at Medicaid and you will see that it only pays doctors and hospitals 60% of the cost of care. Underpaying for medical services is not "cost containment." Underpaying is cost shifting from the government to the private sector.
Health insurance companies may not be all that you want them to be, but at least they pay doctors and hospitals better than the government. They offer better benefits at a significantly lower price when compared to Medicare and Medicaid. This is the reason the public option is gone and that reform which kills insurance companies will make a bad situation worse.
I encourage you to do a napkin analysis of Medicare and Medicaid. Analyze how much they cost; describe the benefits to recipients and compare the compensation to hospitals and doctors to compensation providers receive from health insurance companies. I think that you will find that the private health insurance companies offer much better benefits at a much lower cost.
healthcare reform
Sorry, I don't agree with your point of view.
First of all, I don't believe that a Government run healthcare plan is even constitutional to begin with, and even if it were, the plan that I've read, sounds like the end result would be it, putting the medical insurance industry out of business, making the government a health care plan a monopoly, which I think, would put the governmennt in violation of it's own anti-trust laws.
Second, our government's track record of managing our tax dollars absolutely stinks. There's no way, that I would entrust those goofballs up in Washington to manage my healthcare.
Why the doubt?
In New Zealand Government funds almost all health care. They pay the Doctor subsidys directly and Doctors part charge around $7-$40 for each visit (its free for kids). Prescriptions are $2 per item for most items. Hospitals are free. Sure sometimes you have to wait for an operation but not if it is urgent and at most operation waiting times are around 6 months. If you have an accident you cant sue regardless who is at fault but you will have 80% of your income paid to you if you need time off work - no fault, 24 hour scheme regardless where or why the accident happened. Our top tax rate is 38 cents in the dollar. Education is also almost all state funded. Collectively New Zealanders pool their money through tax and pay for our health services - no one "clips the ticket" on the way through particularly not insurers. I live feeling very confident that working or not working, my family and I will get the health care we need - put that on a napkin!
One should take care of
One should take care of health. Prevention is always better than cure.
Health Care Reform
I agree with your point of view. Thank you for your precise explanation & clear summary. If only all those crazy people at town halls would view this...
I saw this presentation on
I saw this presentation on the Fox Business News channel and lost respect for the hosts of the program because they did nothing to question this poor attempt to explain the problems in the system. Possibly the time contraints limited their abilities in this regard.
Writing a book and knowing a doctor does not make you an expert. Its nice that you were a consultant to insurance companies at one time....my guess is you were contracted to help with sales.
Your explanation is very simplified and lacks accuracy. Insurance company profits in health care are 3% to 4%. Modern private insurance plans do much more than pay claims for sick care. The wellness initiatives in these plans have been continually improving over the past 5 years and are making a positive impact on the health of members. These plans are now very robust and getting very effective. The Disease Management programs also help members manage chronic illness and live a better life, not just incur less in health care expenses.
Stating that insurance companies only answer to their shareholders is also rather simplistic. In a competitive environment, if your customer is not happy, they purchase the product or service you provide from a competitor. Shareholders would not be real happy with the result either.
More physicians refuse to accept Medicare due to the low reimbursement rates. Public sector plans continue to have the highest claims per member levels reflecting their lack of effective wellness and disease management programs. It also shows lack of concern for expenses when you are using other peoples money. All of these deficiencies created by government add to the cost of private insurance.
You missed a few parties on the expense and benefit napkin. You fail to mention tort reform. The cost of frivolous litigation and the practice of defensive medicine add significantly to the cost of health care in the United States.
Care provided to those who walk into an emergency room that are not legal citizens or residents of the United States is a significant expense and it is not optional to provide.
The low provider payment rates in government programs such as medicare and medicaid create cost shifting to the private insurance plans. In effect, the government is taking money out of the system to create a lower cost to fulfill its promise of providing benefits. The government also taxes insurance companies. One of the taxes is a tax on insurance premiums paid to the state which is typically 2% to 3%. The government is pointing at insurance companies with one hand while it uses the other to take money out of the members premium payments.
The United States health care system has paid for the substantial improvement in health care technology for the world over the past 20 years. Government run health care will take away the incentive to continue this process. How much less would medicine be if we were using technology from 20 years ago.
Single payer system proponents point to Canada or, in a post on this site, New Zealand. The population of New Zealand is about 60% of the population of Missouri. The single payer system in Canada (population about equal to California) is imploding and it does not even cover prescription drugs. If you take the number of Canadians on a waiting list for services and interpolate that into the U.S. population, 10 million citizens would be on a waiting list. Is this the health care environment we want?
The cost of health care is driving up the cost of health insurance. And the government has never been effective at reducing the cost of anything. Competition in the private sector must be included in this change for it truly to be efficient and effective.
Cheating Insurance Companies
Since cheating insurance companies has become such a fairly common practice, many insurance companies are cracking down by investigating the “injuries” much more thoroughly than ever. Some insurance companies hire private investigators to keep surveillance on those they think may be cheating their company. This can be a pretty effective way of cutting down on insurance fraud since most people don’t expect an insurance company to go out of its way and fork over even more cash to have them investigated. Therefore, the people who are actually cheating the insurance companies freely enjoy their newfound money or free paychecks and make it much easier for the insurance companies to bust them.
Trying to buy health insurance on your own and have gallstones? You’ll automatically be denied coverage.
Jacob William
stickgames
The United States health care system has paid for the substantial improvement in health care technology for the world over the past 20 years. Government run health care will take away the incentive to continue this process. How much less would medicine be if we were using technology from 20 years ago
stick games
hi
i agree with u..we should have to be alert.
Why is this so hard?
I ask why is this subject so hard to understand.Thousands in the US are hurting right now, they either can't afford there co- pay, primiums or just don't have any insurance at all because there uninsurable. I watched the movie SICKO. I've never been a Michael Moore fan at all but his docs that he has come out with turn out to pretty much run true. Yes me and my husband watched it and was amazed how other countries handled there health care. I have to tell you I was impressed and these were gov. run socialized health care. OMG when you went to the hospital to have a baby they pay you to be home for a certain amount of months with your baby. An inhaler that cost us $100.00 cost there $15.00. Sure we may have to wait for a month to for an appointment but I have to do that now...come on we have been getting ripped off for years and Im SICK of it!!! I agree with the poster here commenting on New Zealands healthcare 100%. The very ones in this country that dont want this are either involved in losing money by the gov reform, meaning ,the insurance companies, pharmaceutical companies or they are wealthy and can afford to pay for there own private insurance provider. The wealthy or well off could afford a $1,800.00 co pay before you can be admitted in a hospital, well I cant, thats all that comes into my house monthly. Obama is trying to put something together to make it work for us, you cant beat him up over that. Its apparent that its not working for us now, I mean ALL of us. This plan may not be perfect and down the line can be readjusted but im for it because Im tired of the Dr's, insurance companies and pharmaceutical companies bleeding us dry. They scratch each others backs. My Dr prescibes meds to me only because the REP came in and wants him to pawn off some new meds so Im being told to take these meds so he can get alot of freeby meds in return in his office. Then he is sending me off to have bogus MRI's and etc...Its a vicious cycle and we are caught in the middle. They are sucking the life right out of every american. And I also have to say there are way to many politicians, and they too are a serious problem. It doesnt take that many to help per county/township/district/state. Our country has gone to the crapper big time. If having a so called socialized medical program works for other countries why not ours and so what if this means a little more taxes for us. You pay out the behind as it is on primiums/co-pays, and prescriptions so whats the difference. Its money coming out of citizens pockets either way , but this way the Drs, insurance companies and pharmaceutical companies wont have the upper hand. Its obvious you cant have this many people living in the US and us all agree on a subject but just because we are the USA doesnt mean we cant have a socialized medical program, that doesnt mean we arent for our country. When this country was founded ...ummm there wasnt so many people here, only the east coast was populated and when the word freedom was written down they weren't looking 200+ years into the future ...we have grown and times have changed. There is no more real freedoms, and Im getting tired of the rich making the rules and putting me deeper in the crapper. Im not a Reb, Dem , conserv, liberal, green or any political party...Im me and I pick whats best for me no matter what party or who you are. Im sick of the labels you people put apon yourself and you sit behind the suits that run your party. Step up and get some nads for a change people.
You Nailed It!
I, too, have been struggling with understanding the debate and issues of heathcare. And, in all I read, it is very clear that we are really talking about Insurance reform - very much needed. Dan's napkin showing how the insurance companies have moved to be in between me and my provider is on target. How many times have we been required to get an OK from our insurance carrier for a procedure? How about when your insurance carrier rejects reimbursement for a certain drug? Anyone ever been part of an HMO - where the insurance company can force you to change providers? Do you know that when companies have to spend more on health insurance for its employees it comes out of the same pool as salary increases (meaning less raises)? We are so wrapped up in "socialist" medicine, that we are not seeing what is clearly in front of our eyes.