Free-Market Healthcare Falling Victim to Recession 15 comments
Michael Steinberg
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The New York Times' “Hospitals See Drop in Paying Patients” reports that hospitals are no longer recession proof; any medical care that can be delayed will be delayed. Admissions are flat to down in 62% of hospitals surveyed by a factor of 2% to 3%. Citi Investment Research questioned 112 nonprofit hospitals. The patients lost are the lucrative paying customers. At the same time emergency room activity is increasing with the uninsured. Even a slight shift from the insured to the uninsured can change profits into losses.
Some of the most lucrative procedures are the ones most easily deferred such as joint replacements and weight loss surgeries. These are the same types of surgeries that healthcare free marketeers complain are deferred in the EU and Canada. Could it be possible that our free market healthcare system is rationing care just like the socialist systems?
The recession brings more uninsured with job losses, and those with insurance are likely to defer any noncritical procedures that involve out of pocket costs. Even before the recession, major private insurers [UnitedHealthcare (UNH) and Cigna (CI)] were complaining of enrollment drops. This further exasperates the burden that the uninsured, Medicare and Medicaid are placing on those buying private health insurance. Too many nonpaying and underpaying (Medicare and Medicaid) are pushing the cost of private health insurance to the tipping point and the system is unsustainable.
The press has been speculating that President Obama cannot implement healthcare reform until the financial crisis eases. They say a deep recession will actually save the status quo and aid drug companies and healthcare providers. The press has already been proven wrong. Patients are choosing to forgo certain drugs and deferring care. I believe that businesses, from General Electric's (GE) medical imaging to private insurers, drug companies, doctors and hospitals, will be begging President Obama for more customers. With the health industry losing customers so rapidly, it’s a matter of survival.
Logic will prevail. It is far cheaper to insure everyone if we are paying for their care anyway.
Disclosure: Author is long GE and UNH.
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This article has 15 comments:
"Could it be possible that our free market healthcare system is rationing care just like the socialist systems?"
Any resource with less than an unlimited quantity available for consumption needs to be "rationed" somehow. Healthcare is no exception. The difference between rationing with a market system (usually referred to as allocation) and rationing under socialism is who does the allocating. Under a market, resources are allocated based on prices that people respond to. Socialism allocates by bureaucrats/committee. Our current system of health care in almost no way resembles a market, let alone a free one.
Nice attempt to equate the two! Apples & oranges -- weren't you just talking of participants in the free market delaying ELECTIVE procedures such as joint replacements, weight loss surgeries, etc.?? How is that the same as the inability to get care in some places in Europe for NEEDED procedures???
I've had it JUST ABOUT UP TO HERE with you damn socialists and your push to make the rest of us pay for YOUR healthcare!! Willing to twist the facts in this manner to get it, too.
You want to know why healthcare is sooo expensive in this country? We now mandate health insurance coverage of contraceptives. We have regulations mandating other coverages as well. The result is less choice in plans, and therefore a higher minimum cost. We also have a LARGE dollar cost for things resulting from OUR OWN poor CHOICES -- do you even realize the percentage of ER patients who are their due to alcohol-related accidents, drug use, etc.? How about the costs of STDs, testing for them, and treatment? Adding up yet? Ok, then add on the costs from smoking and poor diet and exercise habits. Starting to get the picture??
We don't need "Universal Health Care"...we need a return to old-fashioned, moral living, where people avoid these behaviors, take care of themselve, and accept personal responsibility for their lives.
Let's see, Hepatitis can be a STD; so are AIDS. So we should exclude those.
Alcohol accidents, is irresponsible living, but so is obesity "irresponsible living". In fact, diabetes, high blood pressure and heart disease can all be attributed to "living styles" that one can label as irresponsible.
Getting the flu is irresponsible, seeing we have vaccines; but so is getting any disease that can be vaccinated; including HPV that can ultimately cause Cervical cancer.
Heavy cellphone usage can cause brain cancer, so can other forms of cancer with working with petrochemical products, and smoking, so we can investigate a person's cellphone usage, jobs, and behavior and filter out "irresponsible behavior" first.
I'll add tooth decay and gum problems too, coz you're responsible and take proper care of your mouth, it's impossible to have a tooth issue.
Turns out most genetic disease is also irresponsible! If you had a genetic disposition to have offsprings that have genetic flaws, esp if both you and your spouse is tested, it's irresponsible for you to have offsprings, so you're on your own if you do get it.
If you didn't test your water supply regularly, your air in your homes, your food, you're irresponsible, so don't come crying if you get cancer unless you can prove you did all those tests regularly.
Your "irresponsible exclusion" is so powerful, that you'll be labeled the medical insurance industry's savior. It's more powerful than the "pre-existing condition" clause that's usually used to exclude service.
What an arrogant, self-righteous and holier than thou response.
The FUNDAMENTAL problem is that everyone in this country thinks healthcare is a right.
You are wrong, and you clearly do not know what you are talking about. Do you support the practice of rescission? Do you support exclusions for preexisting conditions? Do you even understand how this system works?
Take it from someone in the industry, a for profit health insurance system REQUIRES that we have losers; but in this "game" the losers die. Insurance companies perform one single purpose--they pay the bills. That's it. They don't provide care, and they are nothing but the middleman between patient and caregiver. If the middleman is a profit-based entity, then they must take in more than they pay out--and by ever increasingly large margins each year to satisfy shareholders. That means higher premiums and fewer covered services, year after year after year.
If you step out of your cave for just one minute and look at the FACTS you would see that we already have a "socialist" healthcare model (two, in fact). Ever thought of how we provide healthcare to veterans and seniors? In both cases, the big bad government that you love to hate is able to administer the programs at FAR lower cost than private insurance plans. And before you claim that the quality or quantity of services under the VA or Medicare systems is worse than what you find in the private marketplace, why don't you ask current beneficiaries if they'd like to scrap their healthcare benefits and jump into the private market?
The simple fact is that like national defense, law enforcement, firefighting or education, the most efficient way to provide healthcare services to ALL Americans is to have the government do it. But you are too stupid or too selfish to understand or care about that; so you resort to your "socialism" argument and ignore the fact that virtually every socialist country in the world has better healthcare outcomes than your beloved free market country.
You are an idiot.
Other factors play in. State medical associations keep a lid on the number of doctors... tight supply results in doctors' salaries that are exorbitant in relation to those in other developed countries. The immense costs involved in drug approval, intellectual property rights, combined with a system in which neither buyer nor seller are concerned about the price paid because it is simply passed on to insurance, results in high premiums for policyholders and large profits for pharmaceuticals (when they can actually gain approval). Also, given 30 years of government support (and even mandate) for private health insurance, it comes as now surprise that the favored players - large insurers - now control the game, while alternatives remain out of "imperial favor".
It is not only possible, it is given that the free market "rations" goods and services. This is precisely what a free market does. But when the government makes something "free", the market can no longer ration; it can only attempt to produce more of the good, driving up costs of production as well as the final bill, which must be paid by somebody. I fail to see how further socialization - making the good "more free" - will address the essential problems of bloated demand and constricted supply.
USA actually spends 14% of its GDP on healthcare, but doesnt reap the benefits.
About 1/3rd is due to indirect administrative costs and not direct costs such as drugs (which everyone loves to hate).
Its projected that in 10-15 years, healthcare will eat up around 25% of GDP, primarily due to growing baby boomer medical care.
The "free market" solution will be unaffordable to more than 90M americans (including 50M uninsured).
So the writing is clear on the wall.
Even if everyone hates a "socialist" healthcare system like in Canada, US will be forced to go down that path, more for economic reasons than for ideological reasons.
The earlier the system is reformed, the better it would be.
On Nov 07 07:48 PM LeoTheDog wrote:
> Another response to Socialism cannot compete....
>
> You are wrong, and you clearly do not know what you are talking about.
> Do you support the practice of rescission? Do you support exclusions
> for preexisting conditions? Do you even understand how this system
> works?
>
> Take it from someone in the industry, a for profit health insurance
> system REQUIRES that we have losers; but in this "game" the losers
> die. Insurance companies perform one single purpose--they pay the
> bills. That's it. They don't provide care, and they are nothing
> but the middleman between patient and caregiver. If the middleman
> is a profit-based entity, then they must take in more than they pay
> out--and by ever increasingly large margins each year to satisfy
> shareholders. That means higher premiums and fewer covered services,
> year after year after year.
>
> If you step out of your cave for just one minute and look at the
> FACTS you would see that we already have a "socialist" healthcare
> model (two, in fact). Ever thought of how we provide healthcare
> to veterans and seniors? In both cases, the big bad government that
> you love to hate is able to administer the programs at FAR lower
> cost than private insurance plans. And before you claim that the
> quality or quantity of services under the VA or Medicare systems
> is worse than what you find in the private marketplace, why don't
> you ask current beneficiaries if they'd like to scrap their healthcare
> benefits and jump into the private market?
>
> The simple fact is that like national defense, law enforcement, firefighting
> or education, the most efficient way to provide healthcare services
> to ALL Americans is to have the government do it. But you are too
> stupid or too selfish to understand or care about that; so you resort
> to your "socialism" argument and ignore the fact that virtually every
> socialist country in the world has better healthcare outcomes than
> your beloved free market country.
>
> You are an idiot.
On Nov 08 09:15 AM andyn wrote:
> Basic healthcare should absolutely be a right, esp. in the richest
> country on the planet - the USA.
> Its projected that in 10-15 years, healthcare will eat up around
> 25% of GDP, primarily due to growing baby boomer medical care.<br/>
> The "free market" solution will be unaffordable to more than 90M
> americans (including 50M uninsured).
>
> So the writing is clear on the wall.
> Even if everyone hates a "socialist" healthcare system like in Canada,
> US will be forced to go down that path, more for economic reasons
> than for ideological reasons.
If you are so passionate about ridding this country of all traces of "socialism", then why don't you run for office on a platform of abolishing Social Security, Medicare, public education, the military, the police, firefighters and all forms of regulation? I won't hold my breath waiting for you to win....
In the end, you cannot defend a system that produces 50 million uninsured people (costing the rest of us A LOT MORE than if they were covered), and countless millions more who are underinsured and probably don't know it. If you really think that the best we can do in America is to have a system that results in millions upon millions of people facing bankruptcy if they get sick, then you are a lot less patriotic than you think.
To reject a model that actually works (and yes, a national health system ACTUALLY works unless you think better health outcomes for half the cost is bad...) in favor of one that does not seems more pathological than ideological.
[quote]
If you are so passionate about ridding this country of all traces of "socialism", then why don't you run for office on a platform of abolishing Social Security, Medicare, public education, the military, the police, firefighters and all forms of regulation? I won't hold my breath waiting for you to win....
[end quote]
That's *exactly* the problem with our government right now! People are voting for entitlements for *themselves* without regard to whether its anyone else's responsibility to pay their bill for them, and without regard to the bill to future generations. Everyone gives lip service to "government should pay as it goes"...but they continue to demand the opposite in the form of socialist handouts for *themselves*!!
Socialism has not been successful anywhere, ever. There are the occasional zealots for Universal Healthcare who tout Canada or Europe with little firsthand knowledge of the results in those places. Europe has *long* had stagnant growth and high unemployment. Workers are less productive because of workforce immobility. And taxes are sky-high!
Yeah, you've got government paying for everyone's healthcare...if you can get it. I have a friend who lives in London -- during her pregnancy she had her first ultrasound near the end of her 2nd trimester -- whereas in the U.S. we'd have done one a good few months sooner. She simply couldn't get in to get it done! So you can keep your national healthcare. The standard of care and availability will decline. Europe has a solid 10 to 12% of its people who have healthcare from the government, but no job -- the unemployment is that high on a regular basis in several *Western* European countries (yeah, not Eastern European...Western!)
So don't bring that "it works" crap here without numbers and facts to back it. I have a good hunch why you can't -- because there are none.