Good day, family and friends!
In my past six Healthcare posts, I have been looking at the costs associated with the best healthcare system in the world. Here's what I've discovered:
> It is very expensive to get the best medical training in the world and to develop, learn, acquire, and maintain modern state-of-the-art medical technologies. Doctors start their careers as much as $800K in debt before they ever see a patient;
> While there are clear-cut cases of greed in the insurance industry and instances where profit is placed ahead of the needs of the customers (patients), these cases are in the minority and most insurance providers are struggling to stay afloat. The average profit of the 1300+ insurance providers in 2008 was only 2.2%;
> The abrogation of the Principle of Personal Responsibility from our legal system and the accompanying environment of rampant litigation account for between 19% and 27% of the cost of healthcare every year through increased malpractice insurance premiums;
> The cost of the bureaucracy created to monitor the rules and manage the paperwork of the various healthcare insurance offerings account for between 14% and 32% of the cost of healthcare every year;
> Insurance Fraud perpetrated by both patients and physicians account for between 3% and 10% of the cost of healthcare every year. This has resulted in insurance companies creating "Benefits Coverage Panels" made up of non-medical personnel making medical decisions;
> And the betrayal of trust perpetrated by our elected officials who bow to special interest pressure to create laws and regulations designed to block the normal competition of the free market economy.
These six bullet points pretty much summarize the economic challenges to making healthcare in America more affordable. Just addressing real tort reform, policy and document simplification, and seriously hammering those who intentionally commit insurance fraud could reduce healthcare costs by close to half.
Next time, I'll start in on why the Obama/Pelosi/Reid Healthcare Reform Act is most definitely NOT the answer, then I will propose my own solutions. After all, identifying a problem without offering solutions is just bellyaching.
Until then, best regards...
© James P. Rice 2010
28 March 2010
Intermezzo: Form Follows Function
Good day, family and friends!
Not long ago, as I was watching some C-Span video clips of our Congress in action, I started looking at the chambers of both the House and the Senate and had the thought that it might be time for a little makeover. Don't get me wrong; I love the warmth and classic elegance of the dark woods and leather upholstery that hearken back to the late 18th and early 19th Centuries. I just think that, since our elected representatives are dealing with the issues facing America in the 21st Century, maybe they should be in 21st-century surroundings with access to 21st-century conveniences.
For example, replace the dark wood desks with something functional and sleek that includes integrated technology such as a universal docking station for a laptop computer and a charging pad for portable devices. I would also replace the old wooden lectern with one that has integrated teleprompters for scheduled speeches and presentations. I would also glass in the observation galleries so that the citizens of our great nation can come to watch and listen to their Congress in action, but not be able to disrupt the proceedings.
While we're at it, since the elected representatives are supposed to be representing their constituents and their states, I would rearrange the seating to ensure it is not separated along party lines. In the Senate, I suggest the use of paired "partners' desks" so that both Senators from each state would sit together, regardless of their chosen political faction. In the House, each Representative would have a separate desk, but it would be clustered in a "pod" with all the Representatives from that state. I would further emphasize that no state is more important than any other by randomly assigning the positioning of the states in the chamber at the start of each Congressional session, thereby avoiding the claiming of the "good seats" on the basis of seniority or party ranking.
Finally, I would love to see, evenly spaced around the room, wall panels engraved with aphorisms designed to keep Congress on track. They should be large enough and placed in such a way that every Senator and Representative would be able to see every panel from their seat, if they choose to look around. Some of the reminders I would place in both chambers of Congress, as well as the auditorium used for joint sessions, are:
> "Government is not reason, it is not eloquence — it is force! Like fire, it is a dangerous servant and a fearful master. Never for a moment should it be left to irresponsible action." - George Washington
> "The basis of our political systems is the right of the people to make and to alter their Constitutions of Government. But the Constitution which at any time exists, till changed by an explicit and authentic act of the whole people, is sacredly obligatory upon all." - George Washington
> “Power tends to corrupt, and absolute power corrupts absolutely” - Lord Acton
> You are public servants, not public masters.
> "It would be a hard government that should tax its people one tenth part of their income." - Benjamin Franklin
> Read the Constitution! After all, you swore an oath to uphold it.
> "Just because you can do something doesn't mean you should do something." - American Proverb
> "The road to Hell is paved with good intentions." - H.G. Bohn
> "Secrecy is the beginning of tyranny." - Robert A. Heinlein
> "If we lose freedom here, there is no place to escape to. This is the last stand on Earth." - Ronald Reagan
> "A troubled and afflicted mankind looks to us, pleading for us to keep our rendezvous with destiny; that we will uphold the principles of self-reliance, self-discipline, morality, and, above all, responsible liberty for every individual that we will become that shining city on a hill." - Ronald Reagan
> You are no better than any other citizen of the United States.
> We the People are your bosses; you are not ours.
Just maybe these aphorisms will help to minimize the number of Congresspersons who give in to the pressure of special interest lobbyists.
Until next time, best regards...
© James P. Rice 2010
Not long ago, as I was watching some C-Span video clips of our Congress in action, I started looking at the chambers of both the House and the Senate and had the thought that it might be time for a little makeover. Don't get me wrong; I love the warmth and classic elegance of the dark woods and leather upholstery that hearken back to the late 18th and early 19th Centuries. I just think that, since our elected representatives are dealing with the issues facing America in the 21st Century, maybe they should be in 21st-century surroundings with access to 21st-century conveniences.
For example, replace the dark wood desks with something functional and sleek that includes integrated technology such as a universal docking station for a laptop computer and a charging pad for portable devices. I would also replace the old wooden lectern with one that has integrated teleprompters for scheduled speeches and presentations. I would also glass in the observation galleries so that the citizens of our great nation can come to watch and listen to their Congress in action, but not be able to disrupt the proceedings.
While we're at it, since the elected representatives are supposed to be representing their constituents and their states, I would rearrange the seating to ensure it is not separated along party lines. In the Senate, I suggest the use of paired "partners' desks" so that both Senators from each state would sit together, regardless of their chosen political faction. In the House, each Representative would have a separate desk, but it would be clustered in a "pod" with all the Representatives from that state. I would further emphasize that no state is more important than any other by randomly assigning the positioning of the states in the chamber at the start of each Congressional session, thereby avoiding the claiming of the "good seats" on the basis of seniority or party ranking.
Finally, I would love to see, evenly spaced around the room, wall panels engraved with aphorisms designed to keep Congress on track. They should be large enough and placed in such a way that every Senator and Representative would be able to see every panel from their seat, if they choose to look around. Some of the reminders I would place in both chambers of Congress, as well as the auditorium used for joint sessions, are:
> "Government is not reason, it is not eloquence — it is force! Like fire, it is a dangerous servant and a fearful master. Never for a moment should it be left to irresponsible action." - George Washington
> "The basis of our political systems is the right of the people to make and to alter their Constitutions of Government. But the Constitution which at any time exists, till changed by an explicit and authentic act of the whole people, is sacredly obligatory upon all." - George Washington
> “Power tends to corrupt, and absolute power corrupts absolutely” - Lord Acton
> You are public servants, not public masters.
> "It would be a hard government that should tax its people one tenth part of their income." - Benjamin Franklin
> Read the Constitution! After all, you swore an oath to uphold it.
> "Just because you can do something doesn't mean you should do something." - American Proverb
> "The road to Hell is paved with good intentions." - H.G. Bohn
> "Secrecy is the beginning of tyranny." - Robert A. Heinlein
> "If we lose freedom here, there is no place to escape to. This is the last stand on Earth." - Ronald Reagan
> "A troubled and afflicted mankind looks to us, pleading for us to keep our rendezvous with destiny; that we will uphold the principles of self-reliance, self-discipline, morality, and, above all, responsible liberty for every individual that we will become that shining city on a hill." - Ronald Reagan
> You are no better than any other citizen of the United States.
> We the People are your bosses; you are not ours.
Just maybe these aphorisms will help to minimize the number of Congresspersons who give in to the pressure of special interest lobbyists.
Until next time, best regards...
© James P. Rice 2010
25 March 2010
Healthcare in America: Affordability, pt 6
Good day, family and friends!
Today, we look at the ugliest of the three Cost Sisters...special interest legislation.
I call special interest legislation the ugliest of the three sisters because it is rooted in one of the most morally repugnant actions known to man...betrayal of trust. We the People elect individuals to represent us at all levels of government with the hope that they will do the right thing, protect our God-given Rights, and uphold the law of the land. Yet, time and time again, once they are in office they bend (if not break) the truth, sacrifice their principles, and sell out to the various lobbyists and special interest groups; all the while justifying their actions by declaring, "that's just the way the business of government works. You have to compromise in order to get things done down the road." I believe this to be a contemptible lie.
What does this have to do with the affordability of healthcare? Ask yourself these questions: if there are over 1300 insurance companies and underwriters in the United States offering healthcare coverage, then why in some states are the citizens' choices limited to as few as 4 of those companies? Why are corporations forced to offer different insurance options to their employees, based on the state in which they work? Why is it that a self-employed individual in Texas can get medical insurance for a family of 4 for less than $400 per month, while the same coverage in South Carolina costs over $1400? The answer...special interest groups and lobbyists.
Unfortunately, many of the states' legislatures have given in to the seduction of easy campaign donations and feel-good photo ops. They create laws and regulations that severely limit competition and provide a protected market to a handful of insurance companies. Because of this, the insurance companies in those states have no incentive to streamline their operations and improve their efficiency in order to reduce prices. Not only that, but in many of those cases, requests for rate hikes by the protected companies are given 'rubber stamp approval' by the very officials tasked with protecting the public from inequitable business practices.
One of the most egregious examples of this problem is the state of California. The citizens of California have been saddled with the highest medical insurance premiums in the United States, yet they are only allowed to choose from 4 carriers. At every opportunity, California's state legislature has overwhelmingly blocked attempts to introduce competition into the medical insurance industry.
Another blatant example of special interest protectionism and governmental control happened in New York. In 2008, Dr. John Muney started offering a new program to his patients: $79 per month for unlimited doctor's appointments. He believed that if he could reduce the mounds of paperwork created by health insurance, he could cut his costs and ensure that healthcare was within reach for everyone. It wasn't long before the New York State Insurance Department swooped down and told Dr. Muney that he had to stop offering his low-cost flat-fee program because it was a form of insurance and he was not licensed to sell insurance in the state of New York. It seems that, at least in the state of New York, the only way for a doctor to avoid the hassles of insurance is for that doctor to start his or her own insurance company.
Basically, while your political heroes line their pockets and solidify their power base, you end up paying more every year for medical insurance. They have betrayed the trust their constituents placed in them in favor of catering to special interest for their own personal benefit.
Next time, I summarize the problems I've identified in this series and start looking at the solution.
Until then, best regards...
© James P. Rice 2010
Today, we look at the ugliest of the three Cost Sisters...special interest legislation.
I call special interest legislation the ugliest of the three sisters because it is rooted in one of the most morally repugnant actions known to man...betrayal of trust. We the People elect individuals to represent us at all levels of government with the hope that they will do the right thing, protect our God-given Rights, and uphold the law of the land. Yet, time and time again, once they are in office they bend (if not break) the truth, sacrifice their principles, and sell out to the various lobbyists and special interest groups; all the while justifying their actions by declaring, "that's just the way the business of government works. You have to compromise in order to get things done down the road." I believe this to be a contemptible lie.
What does this have to do with the affordability of healthcare? Ask yourself these questions: if there are over 1300 insurance companies and underwriters in the United States offering healthcare coverage, then why in some states are the citizens' choices limited to as few as 4 of those companies? Why are corporations forced to offer different insurance options to their employees, based on the state in which they work? Why is it that a self-employed individual in Texas can get medical insurance for a family of 4 for less than $400 per month, while the same coverage in South Carolina costs over $1400? The answer...special interest groups and lobbyists.
Unfortunately, many of the states' legislatures have given in to the seduction of easy campaign donations and feel-good photo ops. They create laws and regulations that severely limit competition and provide a protected market to a handful of insurance companies. Because of this, the insurance companies in those states have no incentive to streamline their operations and improve their efficiency in order to reduce prices. Not only that, but in many of those cases, requests for rate hikes by the protected companies are given 'rubber stamp approval' by the very officials tasked with protecting the public from inequitable business practices.
One of the most egregious examples of this problem is the state of California. The citizens of California have been saddled with the highest medical insurance premiums in the United States, yet they are only allowed to choose from 4 carriers. At every opportunity, California's state legislature has overwhelmingly blocked attempts to introduce competition into the medical insurance industry.
Another blatant example of special interest protectionism and governmental control happened in New York. In 2008, Dr. John Muney started offering a new program to his patients: $79 per month for unlimited doctor's appointments. He believed that if he could reduce the mounds of paperwork created by health insurance, he could cut his costs and ensure that healthcare was within reach for everyone. It wasn't long before the New York State Insurance Department swooped down and told Dr. Muney that he had to stop offering his low-cost flat-fee program because it was a form of insurance and he was not licensed to sell insurance in the state of New York. It seems that, at least in the state of New York, the only way for a doctor to avoid the hassles of insurance is for that doctor to start his or her own insurance company.
Basically, while your political heroes line their pockets and solidify their power base, you end up paying more every year for medical insurance. They have betrayed the trust their constituents placed in them in favor of catering to special interest for their own personal benefit.
Next time, I summarize the problems I've identified in this series and start looking at the solution.
Until then, best regards...
© James P. Rice 2010
22 March 2010
Healthcare in America: Affordability, pt 5
Good day, family and friends!
Sorry about the delay in posting this installment. Real Life can be a real grizzly bear.
Now, let's continue our look at the costs associated with litigation, insurance fraud, and special interest legislation....
Ambulance-chasing weasels aren't the only thing negatively impacting healthcare costs. Insurance fraud being perpetrated by both, larcenous patients and unscrupulous doctors, is a major problem in the 21st Century. The FBI estimates that fraudulent billings make up between 3% and 10% of total healthcare expenditures every year. In 2007, for example, total healthcare expenditures in the U.S. were $2.26 trillion. If the FBI's best case is true, that means that in 2007, U.S. healthcare insurance providers were ripped off for nearly $68 billion. At worst, it was $226 billion. This loss is automatically passed on to the consumer in the form of higher premiums.
But the problem is only growing. Last year, the Government Accountability Office (formerly known as the General Accounting Office) stated that they have been unable to definitively identify the scope of the fraud and systemic abuse being perpetrated within the Medicaid/Medicare system. Their best case guess is that, in 2008 alone, taxpayers were robbed of a minimum of $69 billion by people intentionally defrauding the system. This is an increase of over 200% from only the year before. The FBI estimates that this will only get worse as people live longer and make more demands on the Medicare system. And this doesn't include the honest mistakes made every year by tens of thousands of Medicaid/Medicare recipients overwhelmed by the complexity of the bureaucratic maze they have to negotiate just to see a primary care physician.
These increasingly sophisticated ways of 'gaming the system' have created a layer of bureaucracy within many insurance companies that have evolved into something resembling systemic abuse in its own right. I'm speaking of what are sometimes called 'Benefits Coverage Panels'. These are the panels or committees employed by the insurance companies to review the diagnoses and treatments doctors propose for their patients covered by that insurer. In order to protect their slim profit margins, some insurance companies now have accountants and bureaucrats (who were never physicians themselves) reviewing medical cases and second-guessing experienced physicians, often denying treatment because, in their humble opinion as a bean-counter or paper-pusher, the treatment wasn't necessary. These coverage panels are just another unnecessary expense adding to the cost of healthcare insurance.
Next time, the impact your political heroes have on the cost of your healthcare coverage.
Until then, best regards...
© James P. Rice 2010
Sorry about the delay in posting this installment. Real Life can be a real grizzly bear.
Now, let's continue our look at the costs associated with litigation, insurance fraud, and special interest legislation....
Ambulance-chasing weasels aren't the only thing negatively impacting healthcare costs. Insurance fraud being perpetrated by both, larcenous patients and unscrupulous doctors, is a major problem in the 21st Century. The FBI estimates that fraudulent billings make up between 3% and 10% of total healthcare expenditures every year. In 2007, for example, total healthcare expenditures in the U.S. were $2.26 trillion. If the FBI's best case is true, that means that in 2007, U.S. healthcare insurance providers were ripped off for nearly $68 billion. At worst, it was $226 billion. This loss is automatically passed on to the consumer in the form of higher premiums.
But the problem is only growing. Last year, the Government Accountability Office (formerly known as the General Accounting Office) stated that they have been unable to definitively identify the scope of the fraud and systemic abuse being perpetrated within the Medicaid/Medicare system. Their best case guess is that, in 2008 alone, taxpayers were robbed of a minimum of $69 billion by people intentionally defrauding the system. This is an increase of over 200% from only the year before. The FBI estimates that this will only get worse as people live longer and make more demands on the Medicare system. And this doesn't include the honest mistakes made every year by tens of thousands of Medicaid/Medicare recipients overwhelmed by the complexity of the bureaucratic maze they have to negotiate just to see a primary care physician.
These increasingly sophisticated ways of 'gaming the system' have created a layer of bureaucracy within many insurance companies that have evolved into something resembling systemic abuse in its own right. I'm speaking of what are sometimes called 'Benefits Coverage Panels'. These are the panels or committees employed by the insurance companies to review the diagnoses and treatments doctors propose for their patients covered by that insurer. In order to protect their slim profit margins, some insurance companies now have accountants and bureaucrats (who were never physicians themselves) reviewing medical cases and second-guessing experienced physicians, often denying treatment because, in their humble opinion as a bean-counter or paper-pusher, the treatment wasn't necessary. These coverage panels are just another unnecessary expense adding to the cost of healthcare insurance.
Next time, the impact your political heroes have on the cost of your healthcare coverage.
Until then, best regards...
© James P. Rice 2010
07 December 2009
Healthcare in America: Affordability, pt 4
Good day, family and friends!
Today, we start looking at litigation, insurance fraud, and special interest legislation.
Another component that has caused the cost of doing business for both physicians and insurance providers to skyrocket is runaway litigation. Over the last 30 - 35 years, the concepts of 'Personal Responsibility' and 'Reasonable Expectation' have been either perverted or completely discarded by personal injury attorneys. People who are grieving over a personal tragedy are being convinced by these ambulance-chasers that it will make them feel better to lash out at the deepest pockets they can find. Here are two recent examples of such spurious abuse of litigation:
1) Earlier this year, a grieving family in Montana filed suit against the parent company of Louisville Slugger because their son was killed by a line drive hit by a batter using one of their aluminum bats. The jury awarded the family $850,000.
2) A woman in Oklahoma has filed suit against Samsung and Sprint Nextel because a man who was distracted by a cellphone call ran a red light and broad-sided a car in the intersection, killing the woman's mother. This suit is pending.
But the most famous case of abusive litigation that really opened the flood gates is the case of Liebeck v. McDonald's Restaurants from 1994. In case you don't remember, this is the case where a 79-year-old woman who, due to her own actions, spilled hot McDonald's coffee in her lap. Thanks to her weasel of an attorney and the twelve idiots on the jury she received a judgment of $2.86 million dollars for 'comparative negligence'. To add insult to injury, her husband filed a separate suit against McDonald's for "loss of spousal duties" because his wife couldn't have sex while she recovered. McDonald's settled his suit out of court for another $150,000.
What do these cases have to do with the cost of healthcare? They are some of the most egregious examples of the courts throwing personal responsibility out the window. This attitude that people are no longer responsible for their own actions has spilled over into every aspect of our society...including healthcare. Because of this 'victim mentality', the cost of medical malpractice insurance coverage has gone crazy. Paying the out of control punitive damages being awarded in malpractice cases have severely increased the operating expenses of the malpractice insurance carriers. They pass this cost along to the physicians in the form of a six-fold increase in malpractice insurance premiums. In turn, this increase in the operating costs of a physician's practice results in higher overall costs to the consumer for every visit to a doctor's office. As with just about every other cost in this debate, there is a wide disparity in just how much of a physician's cost is malpractice insurance...between 19% and 27%, depending on which report you read.
Next time, we continue looking at the impact of litigation, insurance fraud, and special interest legislation on healthcare costs.
Until then, best regards...
© James P. Rice 2009
Today, we start looking at litigation, insurance fraud, and special interest legislation.
Another component that has caused the cost of doing business for both physicians and insurance providers to skyrocket is runaway litigation. Over the last 30 - 35 years, the concepts of 'Personal Responsibility' and 'Reasonable Expectation' have been either perverted or completely discarded by personal injury attorneys. People who are grieving over a personal tragedy are being convinced by these ambulance-chasers that it will make them feel better to lash out at the deepest pockets they can find. Here are two recent examples of such spurious abuse of litigation:
1) Earlier this year, a grieving family in Montana filed suit against the parent company of Louisville Slugger because their son was killed by a line drive hit by a batter using one of their aluminum bats. The jury awarded the family $850,000.
2) A woman in Oklahoma has filed suit against Samsung and Sprint Nextel because a man who was distracted by a cellphone call ran a red light and broad-sided a car in the intersection, killing the woman's mother. This suit is pending.
But the most famous case of abusive litigation that really opened the flood gates is the case of Liebeck v. McDonald's Restaurants from 1994. In case you don't remember, this is the case where a 79-year-old woman who, due to her own actions, spilled hot McDonald's coffee in her lap. Thanks to her weasel of an attorney and the twelve idiots on the jury she received a judgment of $2.86 million dollars for 'comparative negligence'. To add insult to injury, her husband filed a separate suit against McDonald's for "loss of spousal duties" because his wife couldn't have sex while she recovered. McDonald's settled his suit out of court for another $150,000.
What do these cases have to do with the cost of healthcare? They are some of the most egregious examples of the courts throwing personal responsibility out the window. This attitude that people are no longer responsible for their own actions has spilled over into every aspect of our society...including healthcare. Because of this 'victim mentality', the cost of medical malpractice insurance coverage has gone crazy. Paying the out of control punitive damages being awarded in malpractice cases have severely increased the operating expenses of the malpractice insurance carriers. They pass this cost along to the physicians in the form of a six-fold increase in malpractice insurance premiums. In turn, this increase in the operating costs of a physician's practice results in higher overall costs to the consumer for every visit to a doctor's office. As with just about every other cost in this debate, there is a wide disparity in just how much of a physician's cost is malpractice insurance...between 19% and 27%, depending on which report you read.
Next time, we continue looking at the impact of litigation, insurance fraud, and special interest legislation on healthcare costs.
Until then, best regards...
© James P. Rice 2009
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