Leonhardt writes a peculiar column!

TUESDAY, NOVEMBER 5, 2019

Upper-end journos at work:
Yesterday, David Leonhardt wrote an unusual column.

For starters, the column was unusual because, at least on line, it featured a version of the data shown below. As we've noted again and again, that's simply never done:
Health care spending per person, 2018
United States: $10,586
Germany: $5986
Canada: $4974
France: $4965
Japan: $4766
United Kingdom: $4070
We draw those remarkable numbers from the OECD site to which Leonhardt links.

To see Leonhardt's less relevant version of the data, involving several less relevant smaller nations, you can just click here.

For the record, those data didn't appear in the hard-copy Times at all—but then, such numbers never do. The fact that those numbers appear on line makes Leonhardt's column very unusual.

That's one thing which made Leonhardt's column unusual. Those crazy numbers explain why this country has so much trouble creating a viable health care system.

But those numbers about our gigantic health care spending are almost never shown to us the people. For the record, Leonhardt blows past them very quickly as his column proceeds.

What made Leonhardt's column downright peculiar? In our view, it was this paragraph, near the end of his piece:
LEONHARDT (11/4/19): It’s important to remember that Medicare for All almost certainly is not happening in 2021 even under a President Warren. It faces too much opposition from congressional Democrats—unlike many of her other ambitious plans, on climate, taxes, education and more.
Leonhardt spends his entire column evaluating Warren's health care proposal. He then says this:

It's "important to remember" that Warren's proposal isn't going to pass!

Let's be fair! Leonhardt only says that Warren's proposal won't pass in 2021. He goes on to suggest the possibility that the proposal could pass into law at some later date.

But if Warren's proposal won't pass in 2021 because congressional Democrats oppose it, what are the chances, in Leonhardt's estimation, that it ever could pass at all?

We can't have health care in this country because of that unexplained massive over-spending. Despite this fact, the data about that crazy spending almost never appear—and when they appeared yesterday, they only appeared on line, and the author quickly blew past them.

Meanwhile, Leonhardt spent his entire column evaluating Warren's proposal. Only at the end did he tell us that the proposal can't pass.

Does any of this seem to make any sense? Our journalistic elites have been working this way for the past many years.

"Drink and be whole again beyond confusion." We believe Robert Frost said that!

24 comments:

  1. I would agree with Leonhardt that that is indeed "the important thing to remember". Important to underscore the need to start now to build grassroots support for restructuring the system and eliminating the private profit incentive for driving up costs.

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  2. Well, also, he forgot to mention that "Medicare for All" by itself is not going to fix the cost problem.

    Medicare - or Blue Cross Blue Shield - they're only paying the bills.

    The Medicare's way to pay the bills might be more efficient (but then again it might not be), but the difference is negligible, compared to the cost of medical services themselves.

    A decent journo would compare the price of a routine doctor's visit in, say, France (probably something like 40 bucks, no insurance card) and in the US (probably about $200). A day's stay in a hospital. Or an MRI ($200 vs $2000).

    ReplyDelete
    Replies
    1. The insurance cost is not negligible, but, for sure, it is only a portion of the overall inflated medical costs.

      Physicians, procedures, pharmaceuticals, hospitals -- they all inflate the cost of medical care. Elisabeth Rosenthal had a series of articles a few years back, where she compared medical costs. A hip replacement in the US is about 80K-130K; whereas in Belgium the person was able to have it done for 13K.

      Rosenthal followed up her articles with a book, called An American Sickness. In the book she lays out very cogently how medical care in the US has evolved to be so expensive.

      Delete
    2. Mao writes,

      The Medicare's way to pay the bills might be more efficient (but then again it might not be), but the difference is negligible, compared to the cost of medical services themselves.

      Mao misses the obvious. Not only does Medicare have lower administration costs than private insurance as a percentage of total outlays, Medicare pays health care providers less than those providers charge non-Medicare private insurers and patients for their services, facilities, and equipment.

      Obviously, this is true. There are many providers who turn away Medicare patients so that they exclusively serve patients whom they can bill at higher than the Medicare scheduled rates.

      Medicare relies on committees to establish the fees it publishes and pays. Providers accepting Medicare reimbursement for a particular service may not charge the Medicare patient more for that service than the Medicare rate (Medicare pays 80%, the patient [or their supplemental insurance carrier] up to 20% for each service). There's no, Medicare will only pay X so can you can pay the Medicare co-pay and an additional co-pay. If you use Medicare it is illegal for the provider to negotiate an added cost to see a patient.

      The slam on the Medicare rates is that committees that determine them are made up of specialists who over value the fair rate of return on the services of specialists while under valuing the corresponding rate going primary care physicians.

      Be that as it may, the Medicare rates are the baseline for the industry. Almost all private insurance scheduled fees for any particular health care service allows for the provider to charge a higher than the Medicare rate- whether the private insurer or the patient out-of-pocket is going to pay for it. By the way, uninsured patients, those paying 100% out-of-pocket, face the highest fee rates from providers.

      You would see substantial reductions in total health care costs if all providers were paid according to a Medicare fee schedule. So substantial would such reductions in cost be that the millions of Americans, who are currently uninsured, could be added to the Medicare rolls and Medicare services could be expanded to provide dental, vision, and hearing benefits without increasing total national healthcare costs, or they could if Medicare also started negotiating pharmaceutical costs.

      Delete
    3. "Not only does Medicare have lower administration costs than private insurance as a percentage of total outlays"

      Meh. Even this conventional wisdom is not "obviously true", because bullshitting politicians (like Sanders) compare apples and oranges, trying to impress you.

      Administration that Medicare does (hardly anything more than paying the bills) is nothing like administration private insurances do, from collecting premiums, to managing fiances, to organizing networks of medical services, to monitoring each patient, and so on.

      And in the end, the latter approach could turn out both more expensive to administer and more cost-effective as a whole.

      As for what they pay to providers, I'm sure it's not always less than every private company pays, and the providers most likely know very well how to manipulate the system (a huge bureaucracy with low administration costs!) to make up the difference. Life is more complicated than your talking points.

      Delete
    4. Mao,

      You're sticking with your "I'm a know-it-all" conviction, I see. Can you even remember the last time you learned something new?

      LINK

      Delete
    5. You're projecting, CMike: "obvious", "obviously" are your words in this exchange, not mine. If you read my comments, you should be able to understand that my point is exactly the opposite to "I'm a know-it-all": we don't know that Medicare-For-All (ceteris paribus) would produce much (if any) cost savings. And yes, I doubt that it would.

      Delete
    6. ...besides, in a typical dembot manner, you didn't address a single point I made; you just go straight to projecting.

      Again:
      1. collecting the funds and managing finances for Medicare is done by the IRS and the Treasury. Should we add the costs of running the IRS and the Treasury to Medicare administration costs?
      2. Private insurers monitor and manage every customer. For example: to see a specialist, you need a referral from a general practitioner. While with Medicare you can go directly to see the specialist, any time you want. Does it make sense to compare administrative costs in this situation, for two completely different models?

      Just answer these two, to begin with.

      Delete
    7. I'm pretty sure Medicare withholding is administered by the Social Security Administration which is independent of the Treasury. Are you suggesting the management of Medicare monies is a cost not borne by Medicare funding?

      The only free ride I know of Medicare getting at the expense of other government departments has to do with investigation of criminal fraud and, maybe, some general Congressional actuarial and cost research. I may be wrong but so what?

      An expanded Medicare would not be quite as efficient (i.e. the ratio between administrative costs and provider payments would not be as low) as the current program is because the expenditures on the general population for health care would not be as high as the average per person expenditure on the elderly. The higher per person utilization for medical services for the elderly actually makes the per person administrative cost percentage lower for that cohort.

      That's because there's some sort of administrative fixed cost in place for each enrollee, even for those who never sees a provider. That fixed cost is lower as a percentage of total costs for enrollees who access a lot of provider services than for those who doesn't. Those under 65 years of age as individuals, on average, need and use less healthcare services than those who have reached that chronological milestone.

      But why are you back to being caught up on this? The point you made in your original comment was that administrative costs are "negligible, compared to the cost of medical services themselves."

      As for your number two, that's right. Medicare is not much of a gatekeeper for the patient and their doctors, including specialists. Doctors and other providers, however, are expected to act in good faith and are scrutinized in order to make them conform to best practices.

      This concern that health care is like any other commodity and the less cost to the consumer the more likely they are to use it wastefully is not borne out by the history of Medicare. Sure there are hypochondriacs and those who are lonely and bored and therefore are looking to schedule unnecessary doctor appointments but their inclinations haven't crippled the Medicare project. I have no idea how CMS manages those types clients but, apparently, they do.

      So, does it make sense to compare Medicare administrative costs with private (i.e. for profit and [quacks like a duck profitable] not-for-profit health insurance)? Well, yeah. The whole argument is whether it's better to rely on a single-payer system or continue with the hybrid system that's currently in place.

      (And by the way Mao, like Trump says, "believe me" it's you, you're the zombie around here. You can't learn anything new, you can only repeat yourself over and over.)

      Delete
    8. "I'm pretty sure Medicare withholding is administered by the Social Security Administration which is independent of the Treasury."

      Huh? Certainly FICA and the self-employment tax are collected by the IRS, and included into the federal budget.

      "and are scrutinized in order to make them conform to best practices"

      They sure are scrutinized alright, but not in that respect. They are scrutinized for getting sued for negligence. And their liability insurance rates is another problem.

      "Sure there are hypochondriacs"

      You don't need to be a hypochondriac; you just have to believe that you know what's wrong with you (and I think most people do). Then, naturally, you'll go directly to the specialist
      and ask for an MRI or something.

      "The whole argument is whether it's better to rely on a single-payer system or continue with the hybrid system that's currently in place."

      Switzerland has a hybrid system. Private insurance companies, but non-profit and well-regulated. Everyone is required to buy coverage. It seems to work fine. They do spend more per capita, but the services (arguably) are better than elsewhere in Europe.

      All I'm saying, it's far more complicated than Medicare-For-All Will Solve All Problems.

      Delete
    9. Mao you write:

      ...collecting the funds and managing finances for Medicare is done by the IRS and the Treasury.

      and

      Huh? Certainly FICA and the self-employment tax are collected by the IRS, and included into the federal budget.

      I'm not quite getting your point. Are you saying payroll taxes pass through Treasury on the way to the Social Security Administration? Maybe, in some sort of way. However, the Social Security Administration is the repository for those funds and it ends up taking Medicare premiums out of Social Security payouts.

      Meanwhile the Center for Medicare and Medicaid Services (CMS), an agency within HHS, writes the checks for providers. CMS, itself, is financed out of general revenues -funds which you're right, the IRS, itself, collects- with general revenues providing something like 40% ($300 billion?) of Medicare payout money to healthcare providers.

      The IRS (I just looked it up) collects $3.4 Trillion annually with a total annual budget of less than $12 Billion. So less than 10% of general revenues are going to Medicare with 10% of IRS costs equalling less than $1.2 Billion dollars which is about 0.17% of Medicare outlays. Medicare administrative costs are around 3%, it's a $700 Billion program so those costs are around $21 Billion. Add in what may, as now, be a free ride it's getting from the IRS and the administrative costs for Medicare would increase from 3% to 3.17% of the program.

      Delete
    10. "So less than 10% of general revenues are going to Medicare with 10% of IRS costs equalling less than $1.2 Billion dollars"

      Lol. 10% of the general revenue and therefore 10% of the IRS budget? A phony formula, and a preposterous (and most likely disingenuous) way to compare a system that collects/monitors its premiums with one that doesn't.

      Delete
    11. Like I said Mao, you're a zombie. You can't learn anything new, you can't engage in a discussion.

      Delete
  3. Keep on the Health Care costs Bob. That's where you have the most credibility.

    ReplyDelete
  4. Don't go against the grain anymore.

    ReplyDelete
  5. Can't let the girl get elected. That's what this is all about. They said, "you don't know how to pay for your plan" so she figured out how to pay for it. Now they are saying, "your plan will never pass congress". Neither will anyone else's. But can't let Warren get nominated. She's a girl and girls can't win. That's what this is all about.

    ReplyDelete
  6. US healthcare costs more because everyone along the provider chain (insurance cos., pharma cos., hospitals, doctors) makes more money. Reform will take cash from all these folks' pockets, and Americans tend to view many of these people (doctors, especially) as deserving high salaries, thus making the politics fraught even beyond the power of lobbies like the AMA. Journos could probably emphasize this more, but no huge mystery obscures the basic facts.

    ReplyDelete
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