'What Happened' Is A Slap In America's Face

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kitesandtrainsandcats
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27 Sep 2017, 12:18 pm

The_Walrus wrote:
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Seriously, what's really going on is a war. "costs" don't just disappear into a hole like in a video game economy. There are people benefiting from the skyrocketing costs of healthcare. There are people getting rich, and they want to keep it that way. They don't care if that means more sick people and more people dying.

This is simplistic. A large portion of the costs go to ordinary people: doctors, nurses, hospital staff, paramedics, care workers, opticians, dentists, scientists, transport staff, manufacturers, etc. Yes, there are people at the top of some large companies who are making a lot of money, often unethically, but even if you eliminated that you'd still see health costs rising due to increased demand, an ageing population with complex needs, higher minimum wages, and so forth.

There are lots of fairly straightforward changes which would make significant savings: better bulk-buying, greater use of off-patent drugs. But healthcare costs are still going to rise.


That brings to mind this; note that the original 2009 USN&WP article appears to be off the web. Which given the probable price of bandwith for almost a decade's worth of news magazine content is not an astonishing thing.
I did read it back then and used it as a reference in a number of discussions on Facebook. Both my Facebook account, and the computer I 'save page as' on are now gone for a couple years though the article may be on a CD or one of the dozen USB drive loose around here: I am not going to spend the time to look for it.
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But as Rick Newman points out in the most recent issue of U.S. News & World Report , “blaming insurance firms for runaway healthcare costs is a weak argument, because the insurance industry isn't all that profitable to start with."

Over the past year, “the profit margin for health insurance companies was a modest 3.4 percent,” Newman points out, quoting data provided by Morningstar, a company that rates mutual funds. Morningstar would have no reason to low-ball the insurance industry’s profits; its readers are looking for highly profitable sectors of the economy where they can invest. But the health plan industry is not one of those sectors: insurers ranks 87th out of 215 industries.

“The most profitable industry over the past year has been beverages, with a 25.9 percent profit margin,” Newman reports, “Right behind that were healthcare real-estate trusts (firms that are basically the landlords for hospitals and healthcare facilities) and application-software (think Windows). The average for the oil and gas industry overall was 10.2 percent, three times the margin in the health insurance industry. And that's nothing compared with high-fliers like Google—which had a 20.6 percent margin—and Microsoft, at 24.9 percent.

http://www.healthbeatblog.com/2009/08/who-is-making-the-biggest-profits-from-us-healthcare-you-might-be-surprised/
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But this isn’t to suggest that no one in our for-profit health care industry is making money. “Pharmaceutical companies have a profit margin of 16.4 percent,” Newman reports, “seventh highest of the 215 industries that Morningstar tracks.”

This is why I’m skeptical when drug-makers say that they couldn’t possibly afford to lower prices on drugs—or that if they did, they wouldn’t be able to do research. The fact is that if drug-makers, and their shareholders, could be satisfied with margins of, say 8% or 9% they could, in fact, slice prices. And since roughly 16 percent of the $2.6 trillion that we spend on healthcare goes to the pharmaceutical industry, we are talking about significant savings.

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Billions are squandered because, in recent years, insurers have tended to pay whatever hospitals, the best-paid specialists, drug-makers, device-makers and others choose to charge for their services and products, without asking: “is the patient benefiting?” We know that one-third of our healthcare dollars are wasted on unnecessary tests, ineffective often unproven procedures and cutting edge drugs and devices that, too often, are no better than older safer products.

In the 1990s, for-profit insurers tried to “manage care,” but rather than comparing the effectiveness of various treatments, they tended to compare prices, and say “no” to the most costly procedures even when, in some cases these were the treatments patients needed.


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marshall
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27 Sep 2017, 12:58 pm

The_Walrus wrote:
marshall wrote:
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A left-wing candidate would be much less likely to win than a centrist. You know as well as I do that if Bernie had won the nomination (which he couldn't even manage) he would have been slaughtered by independents and wouldn't have won the Republican crossover votes that Hillary managed. Thanks to the cold war, lots of Americans offhandedly reject anything left of Clinton. Bernie called himself a socialist, which for most people is a huge negative. The Republicans would have called him a communist and united behind Trump or perhaps a new moderate like McMullin.

Not true. For God's sake, Obama was left of Clinton.

2008 Obama was left of 2008 Clinton. 2016 Clinton was left of 2008 Obama and also more socially liberal.

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You have no idea how unpopular both candidates were.

They were the two least popular candidates of all time. And yet Bernie lost to Clinton. Go figure.

He lost in a primary where the rules were set up to make sure he lost. He would have beat her in a straight open vote.

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You should also note that Bernie lost the nomination due to undemocratic DNC rules. The majority of people on the left are not registered Democrats. They are restricted from voting in democratic primaries in most states.

That isn't undemocratic, it's how pretty much every political party and organisation works. If you aren't part of a political party then why should you get a say in how it runs itself? And given that it's really easy to register as a Democrat (no membership fees afaik) there's really no excuse.

It isn't as easy as you think. Many wanted to register but weren't able to do so in time. Many tried to register months ahead of time. Like everything in the US, the DNC system is a horrible antiquated bureaucratic mess.

I would also say that the system today is undemocratic in that 2 parties control everything. Third parties are denied access to televised debates. They are at a huge disadvantage for that reason alone. The two main parties are entirely dependent on corporate support. It is an arms race of sorts. With that in mind, of course the DNC is going to do everything they can to stop someone like Sanders from wining a primary. He is perceived as a threat to their bottom line.

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the problem was Clinton had no message at all.

Almost - the problem was that Clinton's message got drowned out. If you actually look at her campaign material then there's a strong and clear message, but you shouldn't have to do that in order to hear it.

Quote:
Seriously, what's really going on is a war. "costs" don't just disappear into a hole like in a video game economy. There are people benefiting from the skyrocketing costs of healthcare. There are people getting rich, and they want to keep it that way. They don't care if that means more sick people and more people dying.

This is simplistic. A large portion of the costs go to ordinary people: doctors, nurses, hospital staff, paramedics, care workers, opticians, dentists, scientists, transport staff, manufacturers, etc. Yes, there are people at the top of some large companies who are making a lot of money, often unethically, but even if you eliminated that you'd still see health costs rising due to increased demand, an ageing population with complex needs, higher minimum wages, and so forth.

A lot of the costs go to middle managers. You literally need experts to understand the fuckign billing process alone. The private insurance system is a bureaucratic nightmare. As for the price of drugs though, it really is as simple as greed and lobbying against the interests of ordinary citizens. There are legal clauses that, for instance, prevent government from bargaining for lower prices. Republicans also decided to allow for television advertisements of prescription drugs, causing more arms races.

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There are lots of fairly straightforward changes which would make significant savings: better bulk-buying, greater use of off-patent drugs. But healthcare costs are still going to rise.

The problem is the healthcare business doesn't want anything that would save costs. They don't want more preventive care. They make more money from people in crisis. They don't want R&D that goes into finding cures when they can make more money by providing expensive band-aids to chronically ill patients. The incentives are simply dysfunctional.



Last edited by marshall on 27 Sep 2017, 2:21 pm, edited 2 times in total.

kitesandtrainsandcats
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27 Sep 2017, 12:59 pm

One more while we're talking insurance companies - back during the ACA debate in 2008 & 2009 and discussion among the Facebook folks I thought for illustrative purposes to create a fictional insurance company of 1 million members and see what kind of cash they would go through in a year. And given that for example San Diego, CA, has a population of 1.391 million (2015) 1 million members is not irrational for a national insurance company.

On with illustrating how much money the insurance company would go through in a year.
One part of what all I did:
Let's say 3% of their members were Seniors or disabled like Kathy who I knew at the time and were on $800 of meds a month.
And given the census bureau says the following I don't see that 3% as outrageous
47.8 million
"The number of people age 65 and older in the United States on July 1, 2015. This group accounted for 14.9 percent of the total population. The age 65 and older population grew 1.6 million from 2014."

That would be $800 x 12 months x (.03 X 1,000,000)
Which is $800 x 12 months x 30,000 people
Which is $288,000,000 (288 million) a year just for them. Conversion says = € 243,313,920.00

Given news articles like this from 2015, and there were similar back when I did this exercise, the amounts I used above are not irrational.

Quote:
"Drug Costs for Older Adults Still Soaring
4th straight year of double-digit increases
by Candy Sagon, AARP

Nearly 300 brand name drugs increased almost 130 times faster than general inflation from 2014 to 2015.

Outrage from politicians and patients over soaring drug prices has done little if anything to slow their ascent, with the retail price tag for brand name drugs widely used by older Americans jumping by an average of 15.5 percent in 2015 — the fourth straight year with a double-digit increase, a new AARP Public Policy Institute report finds.

The average annual cost for one brand name drug used to treat a chronic health condition topped $5,800 last year, compared with less than $1,800 a decade ago when AARP began the study.

Drug prices also continued to far outstrip the rate of inflation. Retail prices for 268 brand name drugs increased almost 130 times faster than general inflation from 2014 to 2015, the most recent data available.

http://www.aarp.org/health/drugs-supplements/info-2016/drug-costs-for-older-adults-still-soaring-cs.html

Now, back to that 288 million. If the insurance company has 1 million members, that means the members each have to pay $288 a year, $24 a month, just to cover that 3%.
And then there are the payouts to the other 97%, not all of them, but enough of them to rapidly eat up a lot more dollars.
Which is why insurance companies invest in a lot of other industries; and especially ones which have generally consistent earnings from year to year such as oil companies - they need more income than only member payments can provide.


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kitesandtrainsandcats
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27 Sep 2017, 1:06 pm

Oh, another factor in medical costs, something I just remembered. In late 1980s and early 1990s, my mother who although she was a dietitian wound up working in a chest consultant doctors' office handling their insurance - both received and paid out. During some of those years the office had 3 doctors, some of that time 2 doctors. Their malpractice insurance policy payments were around 2 million dollars a year just for that one office with only 3 or 2 doctors.


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The_Walrus
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27 Sep 2017, 6:05 pm

marshall wrote:
I would also say that the system today is undemocratic in that 2 parties control everything.

I agree with this. I think you'd be much better off with a more proportional system which would grant seats and funding to smaller parties. Ideally you'd also abolish the office of President which is inherently undemocratic (France should do the same).

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They don't want R&D that goes into finding cures when they can make more money by providing expensive band-aids to chronically ill patients. The incentives are simply dysfunctional.

There's a huge incentive to finding a cure. You would make much more money from curing a disease because people and healthcare providers would pay more for it. You'd also not risk your competition coming up with a cure for the chronic disease you're milking and taking away your livelihood.