How exactly does skyrocketing utlization lower costs?

If a government plan is such a panacea, why don’t we just implement it in a handful of (supportive) states, and stop the debate? Aren’t the real public options, Medicare and Medicaid, insolvent and driving the country (along with Social Security) towards bankrupcy?

he First Health Insurance

Before the birth of modern medicine, hospitals were poorhouses where the indigent went to die. Then came the advent of effective medicines, especially antibiotics, along with a revolution in medical schools.

Suddenly, says economic historian Melissa Thomasson, “hospitals are marketing themselves as places to have babies.” The professor at the Miami University in Ohio says that in the early part of the 20th century, hospitals were able to focus on happy outcomes.

Health care became much more effective, and much more expensive. Clean hospitals, educated doctors and real pharmacological research cost money. People proved willing to pay for care when they were really sick, but it wasn’t yet common to go for checkups or survivable illnesses.

By the late 1920s, hospitals noticed most of their beds were going empty every night. They wanted to get people who weren’t deathly ill to start coming in.

An official at Baylor University Hospital in Dallas noticed that Americans, on average, were spending more on cosmetics than on medical care. “We spend a dollar or so at a time for cosmetics and do not notice the high cost,” he said. “The ribbon-counter clerk can pay 50 cents, 75 cents or $1 a month, yet it would take about 20 years to set aside [money for] a large hospital bill.”

The Baylor hospital started looking for a way to get regular folks in Dallas to pay for health care the same way they paid for lipstick — a tiny bit each month. Hospital officials started small, offering a deal to a group of public school teachers in Dallas. They offered a plan for the teachers to pay 50 cents each month in exchange for Baylor picking up the tab on hospital visits.

When the Great Depression hit, almost every hospital in the country saw its patient load disappear. The Baylor idea became hugely popular. It eventually got a name: Blue Cross.

“When I actually started studying this stuff, I got interested because I wondered why we have an employer-based system,” Thomasson says. “It comes right out of Blue Cross.” The genius of that approach, she says, was marketing it to groups of workers.

The Modern System Is Born

Soon, Blue Cross coverage was available in almost every state, though not many people bought in. The modern system of getting benefits through a job required another catalyst: World War II. Thomasson says that if the Great Depression inadvertently inspired the spread of employer-based health insurance, World War II accidentally spread the idea everywhere.

“The war economy is an entirely different ballgame,” Thomasson says. The government rationed goods even as factories ramped up production and needed to attract workers. Factory owners needed a way to lure employees. She explains that the owners turned to fringe benefits, offering more and more generous health plans.

The next big step in the evolution of health care was also an accident. In 1943, the Internal Revenue Service ruled that employer-based health care should be tax free. A second law, in 1954, made the tax advantages even more attractive.

Thomasson cites the huge impact of those measures on plan participation. “You start from 9 percent of the population in 1940 to 63 percent in 1953,” she says. “Everybody starts getting in on it. It just grows by gangbusters. By the 1960s, 70 percent [of the population] is covered by some kind of private, voluntary health insurance plan.”

Thus employer-based insurance, which started with Blue Cross selling coverage to Texas teachers and spread because of government price controls and tax breaks, became our system. By the mid-1960s, Thomasson says, Americans started to see that system — in which people with good jobs get health care through work and almost everyone else looks to government — as if it were the natural order of things.

http://www.npr.org/templates/story/story.php?storyId=114045132

The private sector has had EIGHTY YEARS to get the procedure of health care working correctly.

Before 1954, when the insurance industry lobbied to get laws changed to allow them to get a share of what health insurance was BEFORE 1954, the rate at which people were insured increased from 9 percent in 1940 to its all time high of 64 percent in 1953. The rates at which private insurance fluctuated between 1954 and today has been constant, and it has never again reached the high it was at when private health insurance existed as a form of health care provider, a consortium of doctors, hospitals and clinics who collected the premiums and PROVIDED the health services. This was what Blue Cross/ Blue Shield originally was. It was not insurance, per say. You purchased a program from the company and basically the doctors, hospitals and clinics “joined” this massive, group practice.

In 1954, the additional layer of insurance companies that did not directly have medical providers as MEMBERS, came into being. Before 1954, the most economic model by which health coverage could be provided was as a NON PROFIT business. There was no need to provide shareholders in stock with a profit… because there was no stock. There were no stock options given to CEO’s for the same reason. Sure, the executives got decent salaries, but by and large, these were all medical people, and they didn’t get much more than they would have gotten being doctors or hospital administrators.

When the insurance industry saw the amount of money that was being made this way, they wanted a piece of the action, but to get INTO the action they had to make it possible for “FOR PROFIT” businesses to be able to get into the picture and not actually be responsible for PROVIDING health care.

Doctors Support a Public Plan Because Our Chances of Actually Getting Paid Are Better Than From Private Insurance

October 6, 2009

Big Government claims that, in supporting a public plan, doctors are endorsing the largest denier of health care claims. The selected data they cite is misleading and the blog’s argument is contrary to our actual experience. The chances of getting paid is far better from Medicare than most private insurance companies assuming Medicare was correctly billed as primary insurance. Such personal experience is what is going to influence physician support for a public plan–not selective quoting of statistics by conservative blogs.

The post lists a column on percentage of claim lines denied but doesn’t account for the reason. In real world experience, the number of denials is a small fraction of this. Another number which is far more consistent with my real world experience is percentage of claim lines reduced to zero. By this measurement Medicare is far more likely to actually send payment.

When my office does have Medicare claims rejected, by far the most common reason is that the patient was enrolled in a Medicare Advantage plan but is unaware that their coverage was changed.

When physicians support a public plan we are supporting a plan based upon the original government Medicare program before it was screwed up by George Bush and the Republicans. I have also seen far more incorrect rejections of claims from Medicare Advantage plans, often taking multiple phone calls and faxes to fix, than I see from the government Medicare plan.

http://liberalvaluesblog.com/?p=10441

This is ALSO the reason that the American Medical Association ENDORSED the public option.

Need MORE:

September 15, 2009
A new poll shows that doctors are among the biggest supporters in the United States of a public option in the health care overhaul. One reason: Many say they’ve had largely good experiences with Medicare.

Doctors, by a large majority, support adding a government run health insurance program that would compete with private insurance. That’s according to a new survey. What’s been called the public option continues to be one of the most contentious issues in the health care debate, but the survey shows that doctors are already used to dealing with government run insurance.

NPR’s Joseph Shapiro reports.

JOSEPH SHAPIRO: In the survey, nearly three-quarters of doctors said they favor a public option. Co-author Dr. Salomeh Keyhani is a researcher at Mount Sinai School of Medicine.

Dr. SALOMEH KEYHANI (Researcher, Mount Sinai School of Medicine): The results of the study demonstrated that the majority of physicians support a public option in the United States of America.

SHAPIRO: That included the 63 percent who say they’d like to see patients get a choice of public or private insurance and another 10 percent who favor a public option only. They’d like to see a single-payer system. When the public in general is surveyed, support for a public option has run between 50 and 70 percent.

Co-author Dr. Alex Federman – he is also at Mount Sinai – says it shouldn’t be a surprise that doctors favor a public option in numbers even greater than Americans in general.

Dr. ALEX FEDERMAN (Researcher, Mount Sinai School of Medicine): Probably the most important reason is grounded in physicians’ experience with Medicare.

SHAPIRO: Doctors already have lots of experience with that government-run health insurance. The survey also asked the more than 2,100 doctors about how they compared Medicare with private insurance.

Dr. FEDERMAN: Physicians favored Medicare when it came to delivering care to patients. They thought Medicare was better when it came to autonomy and their decision making and their ability to get patients the care that they thought the patients needed…

SHAPIRO: Lots of the doctors in the survey said that they sometimes run into problems with Medicare. But Keyhani, who’s spoken publicly in support of a public option, says doctors she spoke to for the survey often worry more about their uninsured patients.

…Dr. KEYHANI: So many of Americans are uninsured and physicians have to take care of uninsured patients. A public option would sort of help guarantee that most people had coverage. And I think that’s very important to physicians who wake up in the middle of the night, they go to the hospital and they take care of patients and are not reimbursed. So having a guarantee of reimbursement of some sort I think is very appealing to most physicians….

http://www.npr.org/templates/story/story.php?storyId=112839232

The report goes on to state the problems doctors have with Medicare, but still overall, they prefer it to private insurance because Medicare is less obtrusive in the “patient/doctor” relationship than the private sector is. However on the whole doctors simply prefer both Medicare and the public option when it comes to how to deal with the current health reform situation

People less than 2 years of age
People 50 years of age and over

People with a medical condition that places them at high risk for complications from influenza, including those with chronic heart or lung disease, such as asthma or reactive airways disease
People with medical conditions such as diabetes or kidney failure or people with illnesses that weaken the immune system, or who take medications that can weaken the immune system

Children less than 5 years old with a history of recurrent wheezing

Children or adolescents receiving aspirin

People with a history of Guillain-Barré syndrome, a rare disorder of the nervous system

Pregnant women

People who have a severe allergy to chicken eggs or who are allergic to any of the nasal spray vaccine components

It is possible for individuals vaccinated with FluMist to spread the virus to others for up to 21 days after vaccination. For this reason it is recommended that those vaccinated with FluMist avoid close contact with individuals with weak immune systems during that time.

You actually GET the flu from flu mist, but its symptoms are limited to nasal symtoms because the virus is not strong enough to penetrate the mucus barriers in the nasal passages in the average person.