Questions regarding public vs. private health insurance.

[Schemp]

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Hi all, I've just registered and read through some of the universal health-care related threads and did some reading outside of the SDN as well.

My question is, given the obscene profits of health insurance companies and poor payouts they are notorious for, is there some form of government insurance that is offered in competition to this system? I have very little knowledge regarding economics so I am unsure of whether this is even legal under our constitution, but it seems to me as though one of the greatest barriers to decreasing medical costs is the unregulated increase of insurance premiums.

The insurance industry made over 60 billion dollars in profits the previous year, which is not necessarily wrong if they are doing their job effectively and honestly in covering medical costs for their subscribers. Since they are increasing premiums more quickly than inflation or claims payouts, it seems to me as though we are suffering at the hands of a monopoly of sorts. Putting aside the question of government efficiency, I am of the opinion that businesses should not profit from the large-scale denial of services directly attributed to our health. I realize that the government has an unfair advantage in delivery of services, so making a fully government-operated insurance company is probably not allowed, but then how does this function in universal health-care countries with a private/public mix of health insurance?

I am kind of rambling, so I will give the gist of what I am curious about:
a) What bars our government from competing with insurance companies?

b) How does the mixing of public and private insurance in universal health-care companies operate?

c) Do you have any insights as to alternatives for this broken system? Or, if you do not believe it is broken, can you explain your reasoning?


I realize this is a contentious issue, but I am genuinely interested in people's opinions and deepening my own understanding of this topic. Thanks for anything you have to offer!

 

[Miami_med]

The government currently pays ~50% of ALL healthcare expenditures already. With regards to reimbursement, Medicare is "competative" in some markets, though they are often difficult to deal with. They have fewer denials than some companies, but are notorious for auditing charts and just making life difficult. I know more than one PCP who actually prefers to deal with the private insurance companies, though there can be better pay from the government in some saturated urban markets.

Medicaid pays horribly across the board.

The majority of doctors visits are from elderly individuals and kids. Virtually all elderly people qualify for Medicare, and most kids will qualify for Medicaid or some sort of cheap Medicaid based state insurance. That's the reality. Government insurance already "competes" in the current market. So in terms of competing, nothing bars the government from doing so, except for the fact that they often have no idea what they're doing, and many people still don't want them to.

 

[Schemp]

Ah, that clears up a lot for me. I've never fully understood medicaid and medicare. It does seem different in a lot of ways though. Its not surprising why so many people don't trust universal health care to be run properly based on what I've read about medicare. Doctors are required to charge everyone at least as much as medicare subscribers are charged, right?

Also, does medicare/medicaid actually COST anything? If not its not really a competition to private insurance; that would pretty much make it a separate entity that still takes private insurance business, but doesn't drive prices down. I just have a terrible time trying to understand where 2 billion dollars of American money is going every year despite our relatively poor health-care delivery in this nation.

 

[Miami_med]

Ah, that clears up a lot for me. I've never fully understood medicaid and medicare. It does seem different in a lot of ways though. Its not surprising why so many people don't trust universal health care to be run properly based on what I've read about medicare. Doctors are required to charge everyone at least as much as medicare subscribers are charged, right?

Also, does medicare/medicaid actually COST anything? If not its not really a competition to private insurance; that would pretty much make it a separate entity that still takes private insurance business, but doesn't drive prices down. I just have a terrible time trying to understand where 2 billion dollars of American money is going every year despite our relatively poor health-care delivery in this nation.

Medicare and Medicaid COST 50% of all healthcare dollars. 40% is private insurance, and ~10% is actually paid by patients. Note that this is dollars PAID, NOT BILLED. The presence of the government pretty much precludes competition in the free market sense, since that presence make the market by definition, not free.

Where does the money go. A lot of it is legitimate use, and a whole lot is not.

In my opinion, the three biggest wastes of money in the current healthcare system:
1. Legal CYA maneuvers. The legal environment in medicine allows for zero mistakes, and there are numerous VERY EXPENSIVE tests done for marginal benefit. This is because 1 mistake equals million dollar lawsuit.
2. There is NO financial incentive to pull the plug EVER. 50% of all money is spent in the last year of life. Medicare and Medicaid combine to pay for all sorts of nursing care, nursing home care, ICU care, etc... for patients that are essentially living on borrowed time and often have zero quality of life
3. EMTALA, which essentially forces ERs to see every bogus complaint within the current legal environment leads to numerous abuses of the most expensive entry point to medical care

Remember, everone talks about doctor's salaries and prescription drug prices, but these are less than 30% of healthcare dollars.