The Real Cost of Healthcare In The US

[Flopper]

I agree that health insurance should be decoupled from employment. In my opinion, it is the only way to make a stand to lower cost across the board. The government is allowing businesses with under 50 employees to opt out of providing health coverage. There are approximately 30 million people that are employed with under 50 employee limit.

78% of them have coverage right now so it definitely would make an impact if all those employers stopped providing benefits all at the same time. If this could become a reality, the over 50 employee limit would definitely join forces with them.

It is the only way the citizens of this country can demand real change in the healthcare industry and reduce cost that is aligned with our wages. If we don't do anything, eventually healthcare will be stripped down to bare bone coverage with higher premiums and higher out of pocket costs.

Most of the big top ten insurance companies have already begun expanding their market to Brazil and other areas that are not under a government system. They are also beginning to outsource their administration depts which further adds to unemployment rates. They do get tax deductions for overseas market so our government is supporting their efforts. Our premiums are paying for all of it.

The ACA has put requirements on them that they must spend 80% on healthcare expenses but there is no penalties or big fines if they don't. I don't see how it is possible for them to pay 80% when 76% of the workforce population has coverage through their employer group plans with high deductibles annually before the insurance company is obligated to pay on our healthcare expenses.

Insurance companies are worthless to us now that they switched the population from HMO plans where we only had to pay a co-pay to PPO plans that have higher premiums and higher out of pocket cost. The fee schedule allowables always manage to stay under our deductible so we are paying for all of our healthcare at a reduced rate.

There is too much fraud and abuse on all levels in the healthcare industry and we are footing the entire bill.

There would have to be a lot of changes for Americans to accept the idea that individual insurance would be better for them than employer provided insurance. One only has to look at the cost and benefits of individual insurance to see that most employee plans are much better. Employers pay on average about 25% of the premium. Many companies pay as much as 50%. Employee plans tend to be HMO's and PPO's which have much better benefits than individual plans.

The currently available alternative to this employer-based system is horrifying. Individuals buying insurance don't have the same purchasing power as large businesses and end up paying much higher prices to cover administrative costs and risks. They also don't get the tax breaks that employers get for buying health insurance. In most states, insurance companies have the right to discriminate against individuals. It is no surprise that, when given the choice between the employer-based system and buying health insurance on their own, the vast majority of Americans reject the latter.

Current individual health insurance can best be describe as insurance for people who will never needed it or for those who have the financial resources to cover all but the most horrendous cost. With that said, if individual insurance could be offered at the same premium and benefits as employee plans, then I would be all for it because individual plans are portable between employers and there would be choices. Possibly the ACA exchanges will be a step in that direction.

 

[lynn63]

I agree that health insurance should be decoupled from employment. In my opinion, it is the only way to make a stand to lower cost across the board. The government is allowing businesses with under 50 employees to opt out of providing health coverage. There are approximately 30 million people that are employed with under 50 employee limit.

78% of them have coverage right now so it definitely would make an impact if all those employers stopped providing benefits all at the same time. If this could become a reality, the over 50 employee limit would definitely join forces with them.

It is the only way the citizens of this country can demand real change in the healthcare industry and reduce cost that is aligned with our wages. If we don't do anything, eventually healthcare will be stripped down to bare bone coverage with higher premiums and higher out of pocket costs.

Most of the big top ten insurance companies have already begun expanding their market to Brazil and other areas that are not under a government system. They are also beginning to outsource their administration depts which further adds to unemployment rates. They do get tax deductions for overseas market so our government is supporting their efforts. Our premiums are paying for all of it.

The ACA has put requirements on them that they must spend 80% on healthcare expenses but there is no penalties or big fines if they don't. I don't see how it is possible for them to pay 80% when 76% of the workforce population has coverage through their employer group plans with high deductibles annually before the insurance company is obligated to pay on our healthcare expenses.

Insurance companies are worthless to us now that they switched the population from HMO plans where we only had to pay a co-pay to PPO plans that have higher premiums and higher out of pocket cost. The fee schedule allowables always manage to stay under our deductible so we are paying for all of our healthcare at a reduced rate.

There is too much fraud and abuse on all levels in the healthcare industry and we are footing the entire bill.

There would have to be a lot of changes for Americans to accept the idea that individual insurance would be better for them than employer provided insurance. One only has to look at the cost and benefits of individual insurance to see that most employee plans are much better. Employers pay on average about 25% of the premium. Many companies pay as much as 50%. Employee plans tend to be HMO's and PPO's which have much better benefits than individual plans.

The currently available alternative to this employer-based system is horrifying. Individuals buying insurance don't have the same purchasing power as large businesses and end up paying much higher prices to cover administrative costs and risks. They also don't get the tax breaks that employers get for buying health insurance. In most states, insurance companies have the right to discriminate against individuals. It is no surprise that, when given the choice between the employer-based system and buying health insurance on their own, the vast majority of Americans reject the latter.

Current individual health insurance can best be describe as insurance for people who will never needed it or for those who have the financial resources to cover all but the most horrendous cost. With that said, if individual insurance could be offered at the same premium and benefits as employee plans, then I would be all for it because individual plans are portable between employers and there would be choices. Possibly the ACA exchanges will be a step in that direction.

Yes, it would be horrifying if we had to buy individual coverage if employers opted out. The reality is most people couldn't do it and this would cause Obamacare to fail right from the start. If the public really wants changes in healthcare, it has to be a cooperative effort from the businesses and their employees. Initial sacrifices must be made in order for change to occur.

 

[CultureCitizen]

I partially agree with your assessment. There is no doubt that American's healthcare bill is rising but the primary factor is not price inflation. The healthcare price index showed only a 1.7% increase for 2012, and a 2.3% for 2011 and about 2.4%/yr over the last 10 years. However, America's total healthcare cost has been rising at nearly twice those rates. Also insurance companies have been passing more costs to the consumer which explains why personal spending on healthcare is rising so much faster than prices. I think your conclusion that we are delivering more healthcare services is correct and in my opinion is a good thing for the country.

Insurance companies do a good job of reducing prices by contracting with network providers at deep discounts. I'm really not sure what insurance companies do in reguard to quality. I think some insurance companies are more sensitive to quality of service than others. Obviously, providers that keep their patients healthy and deliver effective treatments will reduce claims over the long term. However, some companies have little interest in the long term, because of the rapid turnover in customers.

The bottom line is the cost of healthcare has been rising significantly while healthcare prices have barely kept up with overall inflation. The major reason has been the increase in the volume of services delivered, not price increases. With Obamacare, the number of people covered will increase that volume even more which may or may not significantly increase prices. However, one thing is for sure, we will be spending a larger portion of our GDP on healthcare which is the price we will pay for longer life spans and a healthier nation.


http://www.altarum.org/files/imce/CSHS-Price-Brief_March 2013.pdf

I think we agree on most of the points excepting these :

... and about 2.4%/yr over the last 10 years.

The document you listed shows an increment of 4% above the inflation rate in the last 3 years ( 2007- 2012 ) this means a steady yearly increment of 1.3% . Consider this has been going on during the last 30 years and you get 1.013**30 = 1.47 . So prices are about 47% more expensive right now than they were 30 years ago ( inflation adjusted ).

Insurance companies do a good job of reducing prices by contracting with network providers at deep discounts.

Please read the following article and let me know if your oppinion changed:

Disparity in medical billing - The Washington Post

In any case I will be very interested in hearing out your opinion. ... Maryland makes an enticing case.

 

[Flopper]

I partially agree with your assessment. There is no doubt that American's healthcare bill is rising but the primary factor is not price inflation. The healthcare price index showed only a 1.7% increase for 2012, and a 2.3% for 2011 and about 2.4%/yr over the last 10 years. However, America's total healthcare cost has been rising at nearly twice those rates. Also insurance companies have been passing more costs to the consumer which explains why personal spending on healthcare is rising so much faster than prices. I think your conclusion that we are delivering more healthcare services is correct and in my opinion is a good thing for the country.

Insurance companies do a good job of reducing prices by contracting with network providers at deep discounts. I'm really not sure what insurance companies do in reguard to quality. I think some insurance companies are more sensitive to quality of service than others. Obviously, providers that keep their patients healthy and deliver effective treatments will reduce claims over the long term. However, some companies have little interest in the long term, because of the rapid turnover in customers.

The bottom line is the cost of healthcare has been rising significantly while healthcare prices have barely kept up with overall inflation. The major reason has been the increase in the volume of services delivered, not price increases. With Obamacare, the number of people covered will increase that volume even more which may or may not significantly increase prices. However, one thing is for sure, we will be spending a larger portion of our GDP on healthcare which is the price we will pay for longer life spans and a healthier nation.


http://www.altarum.org/files/imce/CSHS-Price-Brief_March 2013.pdf

I think we agree on most of the points excepting these :

... and about 2.4%/yr over the last 10 years.

The document you listed shows an increment of 4% above the inflation rate in the last 3 years ( 2007- 2012 ) this means a steady yearly increment of 1.3% . Consider this has been going on during the last 30 years and you get 1.013**30 = 1.47 . So prices are about 47% more expensive right now than they were 30 years ago ( inflation adjusted ).

Insurance companies do a good job of reducing prices by contracting with network providers at deep discounts.

Please read the following article and let me know if your oppinion changed:

Disparity in medical billing - The Washington Post

In any case I will be very interested in hearing out your opinion. ... Maryland makes an enticing case.

The article clearly shows a huge disparity between what different hospitals charge. However, what a hospital charges and the total they receive from insurance and the patient is typical much less than the amount charge. Insurance companies contract with hospitals in their network for significant discounts.

For example, my wife was in the hospital in Dec. for 3 days. The bill was $15,500. I paid the hospital $1,100. My insurance company''s contracted amount for the service was $6,800. The hospital wrote off the difference $7,600. I have a PPO. Had I not had insurance, you can bet the hospital would have tried to collect every cent of the total bill.

My son who has an HMO had an outpatient procedure at a cost of $6,800. He paid a copay of $200. The insurance company paid $3800 and the clinic wrote off $2800.

Insurance companies reduce cost by contracting for services. When it comes to paying claims, I suspect that they just pay the claim amount provided the codes are correct and the service is covered.

IMHO, one of the great values of insurance is the contracted rates through their networks. There is just no way for individuals to get the prices insurance companies get.

 

[longknife]

I'm glad to find this. I was going to post the following as a separate thread but it seems to be appropriate for here:

Medical Costs

Wonder why so much $$$$ is spent on healthcare?
Well, I've become quite conscious of reading the statements sent in the mail for my various visits and prescriptions outside the military. The cost of an office visit blows me away. Then, yesterday, a received a statement for prescriptions I had filled at my local pharmacy. My co-pay was $5 for each item.

14 capsules for fungal infection - $91.90 for 14!!!
1 generic cream for severe dermatitis - $69.62
1 generic cream for fungal skin infection - $31.10
Total = $192.62
I can purchase the exact same generic medication across the border in Mexico for 1/3 the price.

 

[kiwiman127]

I'm glad to find this. I was going to post the following as a separate thread but it seems to be appropriate for here:

Medical Costs

Wonder why so much $$$$ is spent on healthcare?
Well, I've become quite conscious of reading the statements sent in the mail for my various visits and prescriptions outside the military. The cost of an office visit blows me away. Then, yesterday, a received a statement for prescriptions I had filled at my local pharmacy. My co-pay was $5 for each item.

14 capsules for fungal infection - $91.90 for 14!!!
1 generic cream for severe dermatitis - $69.62
1 generic cream for fungal skin infection - $31.10
Total = $192.62
I can purchase the exact same generic medication across the border in Mexico for 1/3 the price.

This is an example of how the cost of healthcare is NOT negotiated in America.

======================================
In most other countries, prices for health care goods and services are not negotiated between individual health insurers and individual physicians, hospitals or drug companies, as they are in the private insurance sector in United States.

Instead prices there either are set by government or negotiated between associations of insurers and providers of care, on a regional, state or national basis. The single prices for other countries shown in the chart therefore can be taken representative of prices actually paid there.
Uwe E. Reinhardt: U.S. Health Care Prices Are the Elephant in the Room - NYTimes.com
========================================
The result? These charts show the results of America's approach to not really doing anything about the cost of healthcare.

 

[OohPooPahDoo]

These numbers are mind boggling, and they really do not make any sense, but this is what we are paying.

They DO make sense, however, when you consider that what we get for healthcare today is so much more advanced than what we had in the past. People live longer. They also survive health conditions that would have killed them in the past, and those conditions continue to cost money.

To give my grandpa as example, he survived a serious stroke a couple of years ago, but lost most of his ability to speak and get around. 20 years ago he would have just died, but because of modern medicine he lived - and now it costs even more to take care of him. My grandmother has also survived into advanced age with the help of advanced medicine but has alzheimer's, and since grandpa could not take care of her anymore - this meant full time help - to the tune of thousands per month. Fortunately his medicare and army pension were enough, but the cost is still there and he's spending money that might be spent elsewhere or saved.

That's the double edged sword of modern medicine - we GET so much more for it, but we have to pay the price.

At a certain point it comes down to how much is it worth? If I spent 85% of my energy earning money to pay for health care so I could live to be 125, is that necessarily better than spending 17% to live to 85?

 

[Flopper]

I'm glad to find this. I was going to post the following as a separate thread but it seems to be appropriate for here:

Medical Costs

Wonder why so much $$$$ is spent on healthcare?
Well, I've become quite conscious of reading the statements sent in the mail for my various visits and prescriptions outside the military. The cost of an office visit blows me away. Then, yesterday, a received a statement for prescriptions I had filled at my local pharmacy. My co-pay was $5 for each item.

14 capsules for fungal infection - $91.90 for 14!!!
1 generic cream for severe dermatitis - $69.62
1 generic cream for fungal skin infection - $31.10
Total = $192.62
I can purchase the exact same generic medication across the border in Mexico for 1/3 the price.

If we would open up the pharmaceutical market to suppliers from abroad, we would see the price of drugs in the US plummet. The American consumer is paying for most of the R&D cost of developing new drugs, not to mention the drug company profits while consumers abroad pay practically nothing.

Yes, this would be a very good topic for an new thread however, since you brought this up I'll throw in my two cents. I've been buying prescription drugs from several foreign pharmacies for some years. You're right, you can save a lot of money on your prescription drug needs. My wife and I have 7 prescriptions being filled by foreign pharmacies. At first we only bought the brand name drugs which were a significant savings. Then we started buying the generics which are not available in the US. It might come as a surprise, but most brand name drugs are available in generic form when bought overseas and the savings are huge. For example, I have an asthma inhaler which if purchased from our local drug store is about $300/mo. I can buy the generic version for $36/mo. and it's exactly the same drug and works just fine.

There are few things you need to be aware of before buying perscription drugs from a foreign pharmacy.

• First of all there are scams so you need to be careful.
• Reputable pharmacies will not dispense narcotics via the mail.
• They will require a prescription and may contact your doctor to verify.
• All the drugs we receive are in sealed containers with manufactures packing.
• If buying a generic, you should verify that it is being sold overseas. Many disreputable companies will lead you to believe you are buying a generic when it's really a substitute.
• Lastly, I would make sure that the dispensing pharmacist is licensed.
• One of the best sources of information on a reliable pharmacy may be your doctor. The pharmacy we use now was recommended by our doctor.

As long as you're buying your prescription drugs in small quantities, then you will not have a legal problem. If you are ordering a 6 month supply or less of a drug, then there is regulation or an executive order that protects you. However, the drugs companies are constantly lobbying the administration to prevent people from buying prescription drugs overseas. I think you're safe with the current administration, but this is always subject to change.

 

[longknife]

We NEVER buy drugs via the internet!

I was talking about buy from Mexican pharmacies who had registered pharmacists on duty or could make referral to qualified MDs.

 

[Political Junky]

There are people making a living by going across our Mexican and Canadian borders and buying Rxs for groups of people.
One of the biggest crimes committed by the Bush administration was not allowing Medicare to negotiate prices of prescription drugs. The VA does it all the time.

 

[Flopper]

We NEVER buy drugs via the internet!

I was talking about buy from Mexican pharmacies who had registered pharmacists on duty or could make referral to qualified MDs.

I have had one prescription filled when I was in Mexico and had a number filled in Europe. Although drug costs vary somewhat from country to country, the US drug prices are terribly expensive. I think the main reason is we just don't have enough generic drugs. It seems like every time a brand name drug is due to go generic, the drug company get's the FDA to extend it's patent. Most of the expensive brand name maintenance drugs are available in generic form outside the US. The only reason they aren't available in the US, is the government is protecting the profits of the drug companies. In some cases you can buy the same brand name drug outside the US at half the price you pay at a local pharmacy.

Spirva, a brand name drug used to treat asthma and COPD is sold at pharmacies in the US for $200 to $300 for a month supply. The drug itself is manufactured in India and is sold under the name Sereflo in most countries. In the US it's sold under the name Spriva. The only difference is the inhalation device used to dispense the drug and a 700% markup in price.

 

[Flopper]

There are people making a living by going across our Mexican and Canadian borders and buying Rxs for groups of people.
One of the biggest crimes committed by the Bush administration was not allowing Medicare to negotiate prices of prescription drugs. The VA does it all the time.

That started when Bush was in office. People were bused across the boarder to buy prescription drugs at a big discount. There were some companies that brought them back for you but that didn't last long. The drugs companies went ape and some people were stopped at the boarder. The newspapers were filled with stories about it. There were so many complaints that I think Bush or Obama issued an order that allowed people to bring as much as a 6 months supply into the US for personal use. Now you can order by phone or the internet and have them delivered by mail.

 

[kiwiman127]

There are people making a living by going across our Mexican and Canadian borders and buying Rxs for groups of people.
One of the biggest crimes committed by the Bush administration was not allowing Medicare to negotiate prices of prescription drugs. The VA does it all the time.

It's too bad that Obama caved in to the pharmaceutical companies for their support of Obamacare. He was at one time, going to make the pharmaceuticals start negotiating with their pricing for Medicare, but he backed off for their support.

 

[CultureCitizen]

The article clearly shows a huge disparity between what different hospitals charge. However, what a hospital charges and the total they receive from insurance and the patient is typical much less than the amount charge. Insurance companies contract with hospitals in their network for significant discounts.

For example, my wife was in the hospital in Dec. for 3 days. The bill was $15,500. I paid the hospital $1,100. My insurance company''s contracted amount for the service was $6,800. The hospital wrote off the difference $7,600. I have a PPO. Had I not had insurance, you can bet the hospital would have tried to collect every cent of the total bill.

My son who has an HMO had an outpatient procedure at a cost of $6,800. He paid a copay of $200. The insurance company paid $3800 and the clinic wrote off $2800.

Insurance companies reduce cost by contracting for services. When it comes to paying claims, I suspect that they just pay the claim amount provided the codes are correct and the service is covered.

IMHO, one of the great values of insurance is the contracted rates through their networks. There is just no way for individuals to get the prices insurance companies get.

Apparently , yes , but isn't this really working against the consumer ?
Since hospitals know insurance companies will make a bargain for a lower price , they rise the prices. This creates an inflationary spiral ( prices do not grow very fast but they seem to be growing 1.3% above the inflation).

And more important : Why are healthcare prices in Maryland 1/3 of the national average?

I would really like to know what's different in Maryland.

The quick lesson : if you get sick and you are uninsured go to Maryland.

 

[Greenbeard]

And more important : Why are healthcare prices in Maryland 1/3 of the national average?

I would really like to know what's different in Maryland.

The quick lesson : if you get sick and you are uninsured go to Maryland.

Maryland has had a hospital rate-setting system in place for the past three decades.

See: Maryland Reins In Hospital Costs by Setting Rates - WSJ.com

 

[Flopper]

The article clearly shows a huge disparity between what different hospitals charge. However, what a hospital charges and the total they receive from insurance and the patient is typical much less than the amount charge. Insurance companies contract with hospitals in their network for significant discounts.

For example, my wife was in the hospital in Dec. for 3 days. The bill was $15,500. I paid the hospital $1,100. My insurance company''s contracted amount for the service was $6,800. The hospital wrote off the difference $7,600. I have a PPO. Had I not had insurance, you can bet the hospital would have tried to collect every cent of the total bill.

My son who has an HMO had an outpatient procedure at a cost of $6,800. He paid a copay of $200. The insurance company paid $3800 and the clinic wrote off $2800.

Insurance companies reduce cost by contracting for services. When it comes to paying claims, I suspect that they just pay the claim amount provided the codes are correct and the service is covered.

IMHO, one of the great values of insurance is the contracted rates through their networks. There is just no way for individuals to get the prices insurance companies get.

Apparently , yes , but isn't this really working against the consumer ?
Since hospitals know insurance companies will make a bargain for a lower price , they rise the prices. This creates an inflationary spiral ( prices do not grow very fast but they seem to be growing 1.3% above the inflation).

And more important : Why are healthcare prices in Maryland 1/3 of the national average?

I would really like to know what's different in Maryland.

The quick lesson : if you get sick and you are uninsured go to Maryland.

Networks for the big insurers like Aetna, Blue Cross/Blue Shield, and United are so large that a hospital will lose a lot of business if they don't participate in the network. I think this is the primary incentive for hospitals to join the network. In my area there are about 10 major hospitals. 8 of them are part of my insurer's network. I wouldn't even consider going to the non-participating hospitals because of the additional cost.

I think managing the network, is about 90% of the insurer's cost control. You can bet that any claim from a participating hospital for a covered service is going to be honored. If a hospital's claims get to high in relation to other hospitals in the network, the insurer may drop them which puts some pressure on the hospital to keep their cost down.

 

[itfitzme]

My wife's bill was $140,000 in 1989.

 

[Flopper]

My wife's bill was $140,000 in 1989.

It would be over $300,000 today.

 

[CultureCitizen]

Networks for the big insurers like Aetna, Blue Cross/Blue Shield, and United are so large that a hospital will lose a lot of business if they don't participate in the network. I think this is the primary incentive for hospitals to join the network. In my area there are about 10 major hospitals. 8 of them are part of my insurer's network. I wouldn't even consider going to the non-participating hospitals because of the additional cost.

I think managing the network, is about 90% of the insurer's cost control. You can bet that any claim from a participating hospital for a covered service is going to be honored. If a hospital's claims get to high in relation to other hospitals in the network, the insurer may drop them which puts some pressure on the hospital to keep their cost down.

Any thoughts on why Maryland Hospital prices are so low compared to the rest of the USA ?

 

[Greenbeard]

Any thoughts on why Maryland Hospital prices are so low compared to the rest of the USA ?

Its rates are regulated.

The Health Services Cost Review Commission's (HSCRC’s) enabling statute was enacted in 1971. After a three-year phase-in period, the Commission began setting hospital rates in July 1974. At that time, its authority extended only to the rates hospitals charged to the non-governmental purchasers of care. In 1977, however, Maryland was the first of five states granted a waiver by the federal government exempting the State from national Medicare and Medicaid reimbursement principles. Since that time, all payers pay Maryland hospitals on the basis of the rates established by the HSCRC.