We spend 60% more than the average developed country, according to Richard “Buz” Cooper. But after adjusting for income and price differences, we are spending only 31% more in terms of real resources.
What explains this 31 percent? A large body of evidence suggests that it results from poverty and income inequality, which are more prevalent in the U.S. than in any other OECD country except Chile, Mexico and Turkey. And poverty is associated with substantial increments in spending. For example, the poorest decile of Medicare beneficiaries spends 30-40 percent more than the wealthiest; overall hospital utilization rates in large urban areas are 25-35 percent more than in their wealthiest Zip codes; and hospital readmissions are most prevalent from poor neighborhoods and in safety-net hospitals.
But there is more:
[S]ocial spending…in the U.S. is 33 percent less than predicted from GDP (Panel D)…It is difficult not to connect the dots from inadequate social spending to excess poverty and income inequality to more chronic illness and higher health care spending. These dots reside in the core of the OECD onion, and the failure to cope with them is placing an unsustainable burden on our health care system.
We found that privately insured patients had lower risk-adjusted mortality rates than did Medicare enrollees for twelve out of fifteen quality measures examined. To a lesser extent, privately insured patients also had lower risk-adjusted mortality rates than those in other payer groups. Medicare patients appeared particularly vulnerable to receiving inferior care. (Health Affairs)
This is Jason Shafrin:
How did hospitals respond to the law? Over 95 percent of all California hospitals reported that they offered free care to uninsured patients with incomes at or below 100 percent of poverty. However, higher-income uninsured patients still faced the risk of high prices based on billed charges.
Further, this policy did not help improve the accuracy of the billed charges to Medicare. Medicare billed charges are as ridiculous as ever. As shown in the figure below, Medicare payments equaled 20 percent of billed charges by California hospitals in 2010, down from 43 percent in 1997. Thus, although the uninsured are paying less for hospital care, the insured may be paying relatively more.
The secret that hundreds of employees are now refining involves devices that automate and miniaturize more than 1,000 laboratory tests, from routine blood work to advanced genetic analyses. Theranos’s processes are faster, cheaper and more accurate than the conventional methods and require only microscopic blood volumes, not vial after vial of the stuff. The experience will be revelatory to anyone familiar with current practices, which often seem like medicine by Bram Stoker…Theranos is committing to a half-off discount on Medicare fees. “So a test that costs $100 now, we’ll do $50 or less.
Brad DeLong at The Health Care blog makes these assertions:
- Bismarck created the world’s first national health insurance system 130 years ago because he wanted to make the German people healthier.
- The rationale for national health insurance in the U.S. today is the same as it was for Bismarck.
- People can’t pay for expensive care without health insurance and without health insurance they can’t get health care.
- “So, unless we adopt the view that those without ample savings who fall seriously ill should quickly die (and so decrease the surplus population), a country with national health insurance will be a wealthier and more successful country.”
Hmm. It’s hard to know where to start.
- It’s doubtful that anything Bismarck did 130 years ago made anyone healthier. In those days doctors probably did as much harm as good.
- But that wasn’t his purpose anyway: Bismarck created social insurance in order to tie the self-interest of the individual to the state. He wasn’t trying to strengthen individuals. He was trying to strengthen government.
- There is precious little evidence that insuring people increases their life expectancy. Amy Finkelstein, for example found that the establishment of Medicare did not improve the health of the elderly.
- You cannot give people as a whole more medical care unless you have a plan to use idle health care resources or unless you have a plan to create more providers. ObamaCare doesn’t do either of these things.
One major problem is the so-called Independent Payment Advisory Board. The IPAB is essentially a health-care rationing body. By setting doctor reimbursement rates for Medicare and determining which procedures and drugs will be covered and at what price, the IPAB will be able to stop certain treatments its members do not favor by simply setting rates to levels where no doctor or hospital will perform them.
Source: Wall Street Journal.
Nearly a third of the health systems chosen for the ambitious Pioneer accountable care organization program with Medicare are leaving after the first year of the three-year program. The goal of accountable care is for hospitals and doctors to save money while lowering costs…
But only 13 of the Pioneers actually saved enough money to share those savings with Medicare, despite having invested in the programs and staff required to better coordinate care. And two Pioneers ended up owing the Medicare program $4 million. (Washington Post)