[Limitedmoon06]

I'd first like to say hello to everyone... this is my first post on this forum I've been interested in politics and government my entire adult life and I have just recently identified my views as libertarian.

Health care has been in the news lately as Republicans attack the PPACA. This caught my attention because I have recently found work in the health care industry and have a better-than-average understanding of the law's provisions. While I typically side with Republicans on the issue of providing health care and agree that the PPACA really doesn't do much to help, the Republicans really aren't attacking it for the right reasons. The typical sound-byte produced during these attacks go something like this: "Barack Obama wants to mandate what health care you will receive," "Obama wants to ration your health care," or "The President is forcing you to take coverage X regardless of whether you want to or not."

My first beef with these attacks are that they're really not true. No where in the law does it dictate what treatment you receive. Rationing of care is a very unlikely outcome (insurance premium hikes, however, seem much more plausible). The PPACA should (in theory) even improve the selection of coverage you can choose through it's exchange programs. So what should we really be up in arms about?

Basically, the PPACA doesn't attack any of the real problems with high health care costs. Americans pay something like $5,000 per capita for health care services and something like $500 for administrative (read: insurance overhead). Both numbers are roughly twice as high as the next most expensive country. Why are we focusing on the second when we can make so much more progress on the first?

The answer to this is because there really is no good way to do it. Medicare has attempted in the past (late 70s) to apply pricing pressure to keep costs down by forcing hospitals to use DRG codes on their claims in order to get paid. The idea was that if every procedure was codified, they would be easier to track and analyze and they would therefore be able to set better prices. Well, instead of this lowering costs, it ended up raising costs because hospitals simply go around the system: they generate procedures that are unnecessary and tack it on to the hospital encounter. They also cherry-pick certain procedures or supplies that cost more than they should and charge these more often than they should (anyone ever gotten a bill for $2 cotton swabs).

What about legislation? Couldn't the government step in and say "you cannot charge more than X for a hospital stay" or "hospital encounters need to only contain medically necessary procedures...?" Well, in the first scenario hospitals go broke because the cost of care will always increase as the quality of care increase (that and certain procedures will always cost far more than others). In the second, hospitals would just get around that in some other way, either by skirting around the "medically necessary" requirements or by jacking up prices on their procedures.

I believe a Libertarian solution really is best in solving the health care cost problem in our country. We simply have way too many people requiring health care, and the high prices are a result of this high demand. If we collectively used these services less, theory has it that the lessened demand would cause prices to fall. But we cannot just break from our commitments: we have promised our seniors that we would provide for their medical needs. And what of those who desperately need medical care now? What about those who can't afford the care?

These problems cannot be erased over night. No amount of sound-byteing or legislating can solve the essential problem: we, as Americans, are unhealthy. We don't take care of each other. We don't value health in this country, and as a result we rely on health care providers to fix us. In order to change our behavior (using health care services too much), we must change our attitudes. It must become unacceptable to lead an unhealthy lifestyle. In order to change our attitudes, we must change our values. We must embrace healthy lifestyles. I believe a great way to do this is to simply make it more difficult to be unhealthy. Phase out Medicare. Phase out Medicaid. Set an age (35) where you are no longer eligible for the program. Give back tax money taken from those who are younger and no longer are eligible. Create new, far smaller programs that support only those that truly need it: the disabled, and those who no fault of their own cannot support themselves. Knowing that their is no safety net to pay for all of their medical needs, people will live much healthier lives. They will save for future medical expenses. And knowing that the government will no longer be writing out the checks, hospitals will be forced to become more efficient and charge less: you can only expect to earn what others can afford to pay.

Now, lower taxes would certainly help individuals with that plan. But it's all probably too much to ask for (especially the lower taxes )

Let me know what you all think!

[Dr House]

I think the libertarian solution to pretty much anything is exactly the fucking same, and the only thing that changes in yall's argument is the exact reasons why the exact same solution will work no matter what the problem is. Which is boring, because as a former libertarian I already know all your arguments and I already know where they work and where they don't, and why not.

[Eran]

Welcome to the forums!

The parts of Obamacare which mandate coverage do tend to make health insurance more expensive than it needs to be. They incrementally exacerbate an already unfortunate situation in which a growing fraction of people's health care consumption is covered by pre-paid plans (erroneously called "insurance"). The situation is primarily caused by tax-code distortion that makes employer-provided health care (but not other kinds of health-care expenses) deductible.

The upshot is that end-consumers have little or no motivation to try and control cost or rational consumption levels.

To that, as a libertarian, you should add a host of government interventions that tend to make health-care more expensive than it needs to be:
1. Mind-bogglingly complex regulation of every facet and aspect of health-care provision
2. Prohibition of selling health-insurance across state lines
3. Professional licensing laws limiting supply of medical services
4. Very expensive drug and medical device regulation regime
5. Prohibition (in some states, and soon federally) on differentiated pricing of health-care
6. Government directly paying for about 50% of health-care costs through Medicare, Medicaid and VA.

As libertarians, we should never lose sight of the deep involvement of government in this industry, despite it being supposedly "private".

Which is boring, because as a former libertarian I already know all your arguments and I already know where they work and where they don't, and why not.

The purpose of these forums is to have civilized discussions around disagreements.

If you are bored, you are certainly under no obligation to read our posts.

If you disagree, please feel free to be more specific.

[Dr House]

I may get around to exposing a refutation later. I just felt like responding directly to the final question the OP posted meanwhile.

[Limitedmoon06]

I think the libertarian solution to pretty much anything is exactly the fucking same, and the only thing that changes in yall's argument is the exact reasons why the exact same solution will work no matter what the problem is. Which is boring, because as a former libertarian I already know all your arguments and I already know where they work and where they don't, and why not.

Feel free to add something meaningful to the conversation.

1. Mind-bogglingly complex regulation of every facet and aspect of health-care provision

Removing Medicare would actually do a world of good for this one: once payors are free to use their own codes, a standard will eventually be adopted and the billing process will become far simpler. As far as other regulations go, I have to assume that if a hospital consistently underperformed people would no longer go there for their health care needs. Other health care providers would offer better services and the facility would eventually fail. The difficulty I see in switching to a free-market model like that is that while all this is happening, people could be dying from poor care. I think gradually removing regulations would be a good approach.

2. Prohibition of selling health-insurance across state lines

It's pretty easy to see why this exists now: coverage provided by the government in one state may have dramatically higher value than another, and the ability to selling insurance across lines would create a secondary market on insurance that would take advantage of this. The government, being unable to respond to prices as fast as the free market, would lose lots of money. Getting government out as a payor would make this issue irrelevant.

3. Professional licensing laws limiting supply of medical services

I don't see anything particularly wrong with licensing. Any independent source (i.e., not on government payroll or owned by a company with conflict of interests) that has expertise in the field and is willing to provide accreditation would be providing a valuable service. This is a great way for a doctor or group of physicians to advertise their expertise.

4. Very expensive drug and medical device regulation regime

This is due more to government regulation than anything else. If products were left to succeed or fail in the open market, products would be of higher quality and would be cheaper. Reputable and well-run health care facilities would not use untested equipment or drugs.

5. Prohibition (in some states, and soon federally) on differentiated pricing of health-care

This needs to just be done away with. Setting rules with regards to pricing will just make insurance needlessly more expensive for more people. We need to develop a culture that expects (and is prepared for) higher medical costs as we age and require more services.

6. Government directly paying for about 50% of health-care costs through Medicare, Medicaid and VA

See the OP, and thanks for the welcome!

[Eran]

The difficulty I see in switching to a free-market model like that is that while all this is happening, people could be dying from poor care. I think gradually removing regulations would be a good approach.

I suggest a quick transition as follows:
a. Retain current regulatory bodies, but change regulation to certification. Only hospitals, doctors, drugs and medical devices that pass current regulations would be entitled to display a logo indicating they are "Federally-Certified"
b. Privatize Federal bodies (such as FDA) and state agencies engaged in certification. Hospitals, doctors and drug companies would have to pay the cost of certification. At the same time, open the certification business to competition.

The first step can be done virtually instantaneously, with the only delay being associated with changing everybody's web sites and marketing material to include the logo in question.

As the move will be publicized, the vast majority of patients will initially be uncomfortable with consuming any services from a body that does not display the logo. Competing certification agencies (or service providers who choose not to be certified) would have an up-hill battle to build confidence in the buying public.

Getting government out as a payor would make this issue irrelevant.

I think you are confusing private and public insurance. I am talking about the right of a California resident to purchase a completely private insurance policy issued by a Nevada-based health insurance company. No government funds are involved. Rather, the issue is that those companies based in states with lighter regulatory burden would flourish.

I don't see anything particularly wrong with licensing.

I think you are confusing licensing with accreditation/certification. The key difference is that the former is mandated by government, with licensing being controlled by a monopoly agency, invariably populated by members of the profession protecting their turf. The latter is, as you suggest, a valuable service with which I have no issue.

This is due more to government regulation than anything else. If products were left to succeed or fail in the open market, products would be of higher quality and would be cheaper. Reputable and well-run health care facilities would not use untested equipment or drugs.

Exactly. Further, risk-benefit analysis is highly personal. Forcing all patients and doctors in the country into a single standard, inefficiently, monopolisticly and bureaucratically administered is a terrible idea.

[Kman]

I think the libertarian solution to pretty much anything is exactly the fucking same, and the only thing that changes in yall's argument is the exact reasons why the exact same solution will work no matter what the problem is. Which is boring, because as a former libertarian I already know all your arguments and I already know where they work and where they don't, and why not.

Sorry for not advocating crazy schemes that are not gonna work.

[starcraftzzz]

Basically, the PPACA doesn't attack any of the real problems with high health care costs. Americans pay something like $5,000 per capita for health care services and something like $500 for administrative (read: insurance overhead). Both numbers are roughly twice as high as the next most expensive country. Why are we focusing on the second when we can make so much more progress on the first?

Heres a list of cost cutting measures in the PPACA
IMBD board
Invests in community health centers
Invests in computerized health care records, and other new technology.
Reduces drug patents by 2 years.
Requires health insurance companies to spend more money on benefits and less on profits and administration fees.
Invests in comparative effectiveness research.
Creates a completive insurance market for those without employer based health care.
Switches to a payment system that is bundled, and based on the quality of care received instead of the amount of care.
Puts a Pigovian tax on tanning booths
Requires food companies to put accurate and seeable food labels.
Universal health care

The answer to this is because there really is no good way to do it. Medicare has attempted in the past (late 70s) to apply pricing pressure to keep costs down by forcing hospitals to use DRG codes on their claims in order to get paid. The idea was that if every procedure was codified, they would be easier to track and analyze and they would therefore be able to set better prices. Well, instead of this lowering costs, it ended up raising costs because hospitals simply go around the system: they generate procedures that are unnecessary and tack it on to the hospital encounter. They also cherry-pick certain procedures or supplies that cost more than they should and charge these more often than they should (anyone ever gotten a bill for $2 cotton swabs).

Medicare is 40% cheaper then private health care...

I believe a Libertarian solution really is best in solving the health care cost problem in our country. We simply have way too many people requiring health care, and the high prices are a result of this high demand. If we collectively used these services less, theory has it that the lessened demand would cause prices to fall. But we cannot just break from our commitments: we have promised our seniors that we would provide for their medical needs. And what of those who desperately need medical care now? What about those who can't afford the care?

Europeans, use more health care then Americans yet they have costs that are around half of Americas, so people using to much health care isn't the problem

We must embrace healthy lifestyles.

Democrats do try to make lifestyles more healthy, examples including tobacco taxes, tanning taxes, regulations that reduce pollution, menu labeling, health lunches for schools and trans fat bans, republicans mostly oppose all this.

I believe a great way to do this is to simply make it more difficult to be unhealthy. Phase out Medicare. Phase out Medicaid.

Given that Medicaid and Medicare are 20-40% cheaper then private insurance phasing them out would result in increases costs.

[Eran]

Medicare is 40% cheaper then private health care...

I'll address this one now, though the other so-called "cost-cutting" are mainly wishful thinking. Reduction in drug patent duration is, I can agree, a step in the right direction.

Medicare is "cheaper" as measured by comparing overhead cost as a fraction of disbursement.

This is a false metric.

Insurance companies incur overhead, in part, to verify that claims are legitimate. A profit-seeking insurance company will try and balance the expense associated with filtering claims against actual savings in reduction of illegitimate claims.

Medicare is under no similar pressure. Thus, it can "afford" to reduce any oversight of its claim process. It can do so because it need not demonstrate profit - its costs are coerced from tax-payers.

This doesn't make Medicare cheaper - it makes it more wasteful.

[starcraftzzz]

I'll address this one now, though the other so-called "cost-cutting" are mainly wishful thinking. Reduction in drug patent duration is, I can agree, a step in the right direction.

Medicare is "cheaper" as measured by comparing overhead cost as a fraction of disbursement.

Um no. Literally Medicare costs have increased 40% less overall since its inception compared to private insurance.
Also when republicans created Medicare advantage it allowed private issuance companies to compete against Medicare, those private companies ended up with 20% higher administration costs with no real benefits seen from the increase costs

Insurance companies incur overhead, in part, to verify that claims are legitimate. A profit-seeking insurance company will try and balance the expense associated with filtering claims against actual savings in reduction of illegitimate claims.

So according too you Medicare doesn't check to make sure claims are legitimate. Meaning I could make a claim that my doctors needed to spend 20million for antibiotics and it would go through.Can you source this?

Medicare is under no similar pressure. Thus, it can "afford" to reduce any oversight of its claim process. It can do so because it need not demonstrate profit - its costs are coerced from tax-payers.
This doesn't make Medicare cheaper - it makes it more wasteful.

Plz explain how spending a larger share of its money on actually benefits is "more wasteful".
Also when you compare health outcomes and quality measures Medicare rates higher then private insurance.
http://prorev.com/2009/05/study-finds-i ... icare.html
http://content.healthaffairs.org/conten ... 1.abstract
http://www.cms.hhs.gov/NationalHealthEx ... tables.pdf
http://www.nationaljournal.com/njonline ... --20090629

[grassroots1]

I don't think people are unhealthy in this country because they are aware they can receive health care. I think this has more to do with cultural tendencies and a lack of proper emphasis on health and nutrition as a society. Personally being somewhat healthy and in shape is something I do for its own sake, and even if health care was 100% free I would still want to be healthy. This life is the only one we have, after all. The problem here is a consumerist and individualistic culture that has convinced so many people they should live convenient and self-indulgent lifestyles when all this does is make us soft, amorphous blobs of flesh. It is no way for a human being to live. People are physically and mentally sick in this country and my personal opinion is that this stems in no small part from runaway concentration of wealth, corporate food production, and consolidated control over media. We are dumb and fat because we are easier to control when we are dumb and fat.

[Eran]

So according too you Medicare doesn't check to make sure claims are legitimate. Meaning I could make a claim that my doctors needed to spend 20million for antibiotics and it would go through.

I didn't claim Medicare makes no checks. Rather, it may well make fewer checks than private insurance companies. Their incentives are different - the management of an insurance company is held accountable to share-holders over their ability to control costs.

No similar accountability mechanism exists in the public sector.

Plz explain how spending a larger share of its money on actually benefits is "more wasteful".

Because it encourages wasteful over-consumption of medical services. Because seniors don't need to pay out-of-pocket for the medical services, they have no incentives to try and economize. The result is waste.

http://prorev.com/2009/05/study-finds-i ... icare.html
http://content.healthaffairs.org/conten ... 1.abstract
http://www.nationaljournal.com/njonline ... --20090629

Naturally, if you don't need to bear the cost (and Medicare insured indeed have no such burden), you would like your free insurance better.

All these studies are showing is that people prefer that others pay for their costs.

http://www.cms.hhs.gov/NationalHealthEx ... tables.pdf

Many tables with lots of numbers. What is the point you claim they make?


Now for previous "cost cutting measures" in the PPACA.
With the exception of the drug patent duration reduction, could you please explain why we should expect any of them will actually reduce costs?
To be clear, it is easy to see why each of them could cut costs in an ideal world. But we don't live in an ideal world. Please take the latter fact into account when crafting your answer. For example, you could try and discuss the motivation or incentives of the people managing each of those measures, as well as the tools available to them to actually measure both expected and, in retrospect, realized cost savings.

Another good way would be to point to past "cost cutting measures" undertaken by government health programs, and demonstrate that they have, in retrospect, proven effective.