• Facebook
  • Twitter
  • Subscribe
  • RSS

Obama: Socialize Health Insurance

President Obama seems to have backed off of his plans for a government insurance program to compete with the private sector.  Instead, he’s doubling down and proposing something much more radical:  having the federal government set the rates of private insurance companies!

President Obama will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies, as he rolls out comprehensive legislation to revamp the nation’s health care system, White House officials said Sunday.

[…]

By focusing on the effort to tighten regulation of insurance costs, a new element not included in either the House or Senate bills, Mr. Obama is seizing on outrage over recent premium increases of up to 39 percent announced by Anthem Blue Cross of California and moving to portray the Democrats’ health overhaul as a way to protect Americans from profiteering insurers.

[…]

The president’s bill would grant the federal health and human services secretary new authority to review, and to block, premium increases by private insurers, potentially superseding state insurance regulators. The bill would create a new Health Insurance Rate Authority, made up of health industry experts that would issue an annual report setting the parameters for reasonable rate increases based on conditions in the market.

This would, in effect, turn private health insurance companies into public utilities.   And, while that makes some sense in the case of monopoly providers for vital services where efficiencies won’t allow multiple competitors — multiple power grids and the like are not feasible — it’s truly a bizarre idea in a field, such as health insurance, where dozens of providers exist and the barriers to entry for other competitors are relatively low.

One hopes this is just a radical first offer designed to make a “meeting in the middle” more favorable than it would be with a more reasonable starting point.   The obvious solution to the problem in question — and it is a real problem in situations where one or two providers control the business in a large area — is to remove the current barriers to competition across state lines.

Related Posts:

About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He earned a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. Stan says:

    Should we also end state regulation of insurance rates? Do you have any idea what effect the rate hikes in California and elsewhere will have on the middle class? Do you care? And if you do, what’s your solution?

    Like or Dislike: Thumb up 0 Thumb down 1

  2. Dave Schuler says:

    At first glance a system of this sort would appear to be a sort of compromise among the American, French, and German systems. In other words not completely bizarre.

    However, I think it also has some pretty severe shortcomings. If the rates are set above the market clearing price, it’s yet another case of private profits and public costs. If the rates are set below the market clearing price, it will create shortages. How confident are you in the ability of the central planners to set rates correctly?

    I think it’s also important to point out that France and Germany both have systems that are officially and legally tiered. We’ve resisted such a system to date, at least from an official standpoint.

    If Medicare only offered basic coverage, we probably wouldn’t be in the fix we’re in now. And it wouldn’t be nearly as popular as poll after poll demonstrates it is.

    Like or Dislike: Thumb up 1 Thumb down 1

  3. Idiot says:

    “One hopes”

    Very optimistic of you James. When has Obama moderated in the past to give you cause for such “hope?”

    Like or Dislike: Thumb up 1 Thumb down 1

  4. Alex Knapp says:

    Stan makes a good point – rates are already regulated at the state level, so this isn’t as radical as it’s being made out to be.

    I also concur with everything Dave said.

    Like or Dislike: Thumb up 1 Thumb down 1

  5. […] Republicans more moderate than those in Congress are troubled by the approach. For example, James Joyner see it is bizarre: This would, in effect, turn private health insurance companies into public […]

    Like or Dislike: Thumb up 1 Thumb down 0

  6. Herb says:

    Perhaps this proposal comes from his opponents’ well-documented failure to do any of this necessary “meeting in the middle” stuff?

    How confident are you in the ability of the central planners to set rates correctly?

    Not very. But if they’re just going to “review, and block,” as the article says, I suppose I’m okay with that.

    But then again, if they’re just reviewing rate increases and blocking the egregious ones, then they’re not exactly “central planners” are they?

    Like or Dislike: Thumb up 1 Thumb down 0

  7. The bill bans:
    1. excluding people from buying insurance
    2. charging variably based on risk
    3. increasing prices based on changes in the risk of the pool as a whole.

    The only choice for the insurers to remain profitable is to leave the health care market entirely. Once they do, Obama can call for government health care since there’s no private providers anymore.

    So pointing out this is a bad idea is pointless; they’re proposing it specifically because it’s a bad idea.

    Like or Dislike: Thumb up 0 Thumb down 1

  8. Doesn’t anybody in the ruling class actually believe in free markets any more?

    Like or Dislike: Thumb up 1 Thumb down 0

  9. PD Shaw says:

    Self-insurance plans are exempt from state regulation, which increasingly make up a majority of those with employer-provided health care coverage anyway.

    This line of thinking makes me wonder if insurance regulation is truly a national issue, shouldn’t state mandates that drive up costs for non-self-insurance plans also be superseded by the federal government?

    Like or Dislike: Thumb up 1 Thumb down 0

  10. PD Shaw says:

    Stormy Dragon: Is there no mandate to buy health care insurance? If not, the U.S. will see the largest percentage of those without insurance since WWII. Talk about breaking something in order to fix it.

    Like or Dislike: Thumb up 1 Thumb down 0

  11. Triumph says:

    it’s truly a bizarre idea in a field, such as health insurance, where dozens of providers exist and the barriers to entry for other competitors are relatively low.

    Yeah, its really crazy since nowhere else on the planet is the government involved in regulating the price of health care. Hussein must have gotten this from Bill Ayers and his Che Guevara Flag-loving commie advisers.

    A better idea would be to create a securities market where we could bundle health futures into a collateralized health debt obligation. These instruments will enhance capital liquidity which the insurance companies can leverage to diversify investments, enhance efficiencies, lower up-front costs, and build strong returns.

    Bundled health futures can be a hedge to allow a series of high-growth, economy-wide investments.

    It will totally work.

    Just let the market work it out–everything will be FINE.

    Like or Dislike: Thumb up 1 Thumb down 0

  12. Dave Schuler says:

    Self-insurance plans are exempt from state regulation, which increasingly make up a majority of those with employer-provided health care coverage anyway.

    Let me chime in here since I seem to be the blogosphere’s biggest commenter on self-insurance. About 60% of all employer-paid health insurance plans are self-insurance. These plans are frequently administered by insurance companies but, since they bear no risk, they’re not functioning as insurance companies in this case but simply as administrators.

    Like or Dislike: Thumb up 1 Thumb down 0

  13. anjin-san says:

    Doesn’t anybody in the ruling class actually believe in free markets any more?

    You must mean the free markets that allow health insurance companies to block competition across state lines…

    Like or Dislike: Thumb up 1 Thumb down 0

  14. john personna says:

    LOL charles austin, “any more?”

    When was the last time the US was a pure market economy, without regulation, tariff, government grant or government service? (Answer: never)

    Like or Dislike: Thumb up 1 Thumb down 0

  15. john personna says:

    (I am reserving comment on this particular twist to an already twisted government-private health care monstrosity. I can’t say out of hand if it makes the mess tidier or more of a mess.)

    Like or Dislike: Thumb up 0 Thumb down 1

  16. Stan says:

    “The only choice for the insurers to remain profitable is to leave the health care market entirely. Once they do, Obama can call for government health care since there’s no private providers anymore.”

    Stormy Dragon, the insurance industry will get 30 million new customers if health care reform goes through. That’s why they haven’t opposed the administration in any serious way. Similarly with the pharmaceutical industry. Obama’s bill is their only hope to keep increasing their customer base. Think about it.

    Like or Dislike: Thumb up 0 Thumb down 1

  17. Phil Smith says:

    Stan makes a good point – rates are already regulated at the state level, so this isn’t as radical as it’s being made out to be.

    Let’s see if I can understand this. We’ve got it at the state level, and its attendant bureaucracy and expenses. So, the solution is to have another one at the Federal level? This additional redundant layer of bureaucracy and expense is going to bend the cost curve down how, precisely?

    Ditto what PD Shaw said about state mandates.

    Like or Dislike: Thumb up 1 Thumb down 0

  18. dr biker says:

    While the article and most of the comments are strictly true – large number of providers, ease of entry, etc., that is only a partial list of monopolies. Industries can be monopolies by creating barriers via excessively time consuming or expensive procedures. Anyone with high blood pressure, recent surgeries, over 50, etc. knows that the process creates an effective monopoly via the high cost and low probability of being able to change insurers.

    Are federal price controls the answer? No!!! But don’t confuse the insurance industry with either perfect competition or monopsolistic competition. At best, it is an oligopoly like OPEC, and at worst an effective monopoly except for your young, healthy clients with low probabilities of needing their services.

    Like or Dislike: Thumb up 1 Thumb down 0

  19. Dave Schuler says:

    I don’t think charles austin’s question although presumably rhetorical was worthy of derision. Policies don’t need to comply perfectly with a view to be informed by it.

    I think that the degree to which our healthcare policy in the United States should be informed by the notion of free markets is one that’s worthy of discussion. My view is that an effective policy must necessarily be informed by the idea although I’m skeptical of even attempting to implement a completely free market in healthcare.

    Like or Dislike: Thumb up 1 Thumb down 0

  20. Bill H says:

    Well, it’s the state regulation which is creating the lack of competition. It is very costly to create plans which comply with the individual state regulations and get them approved for sale in the state, so most companies don’t bother. That leaves the state’s market in the hands of the first few companies who created such plans.

    I agree with James’ suggestion that price regulation leaves health insurance as being in the same model as public utilities, which is that of the “regulated monopoly.” That’s a long cry from “giving people choices” which is the hue and cry of the reformers.

    Price regulation is costly to companies not so much because it reduces profit margins, it actually doesn’t all that much, but because it requires large administrative overhead of staffing to deal with the governmental bureaucratic requirements. Regulated monopolies are some of the best selling stocks, because those companies reliably return healthy profit margins.

    But remember that with a regulated monopoly the governing body is restraining the selling price on a company which has no competitors, in the case of insurance it would be setting selling prices between competing companies. That is surely some sort of restraint of trade, even if not abused.

    Like or Dislike: Thumb up 0 Thumb down 0

  21. Removing All Doubt: Obama the Socialist…

    His pedophile mentor Frank Marshal Davis was a radical communist. His neighbor, alleged book doctor, fellow board member and fundraiser Bill Ayers is a murderous Marxist who hoped to put tens of millions of Americans in concentration camps in the……

    Like or Dislike: Thumb up 0 Thumb down 1

  22. anjin-san says:

    I think that the degree to which our healthcare policy in the United States should be informed by the notion of free markets is one that’s worthy of discussion

    Of course. But that is not what the right tends to do. “Free markets” are treated as a magical or religious concept. If we just leave things to the “free market” everything will work out fine.

    Meanwhile, corporations manipulate markets to their advantage, with consumers getting screwed in the process.

    Like or Dislike: Thumb up 0 Thumb down 0

  23. Brett says:

    is to remove the current barriers to competition across state lines.

    Only if we get national insurance regulations to replace the state-level ones. I have zero desire to get a credit card industry-style “race to the bottom”, where all the health insurance companies would end up headquartered in a state that more or less lets them write the state’s insurance regulations.

    This would, in effect, turn private health insurance companies into public utilities. And, while that makes some sense in the case of monopoly providers for vital services where efficiencies won’t allow multiple competitors — multiple power grids and the like are not feasible — it’s truly a bizarre idea in a field, such as health insurance, where dozens of providers exist and the barriers to entry for other competitors are relatively low.

    It’s not that bizarre. Remember when we had regulation of the airlines and trucking industries? Moreover, this sounds like a rudimentary version of what the German health care system has (multiple plans, but the government sets rates among other things).

    Like or Dislike: Thumb up 0 Thumb down 1

  24. sam says:

    @Charles

    Doesn’t anybody in the ruling class actually believe in free markets any more?

    Probably no more so than your average corporate executive.

    Like or Dislike: Thumb up 1 Thumb down 0

  25. sam says:

    @Dave

    I don’t think charles austin’s question although presumably rhetorical was worthy of derision.

    I was just recalling my conversation with Milton Friedman when he told me that a businessman wants free enterprise for himself, but not for his competitors.

    Like or Dislike: Thumb up 1 Thumb down 0

  26. 1. A free market is an ideal. I do not pretend that any but a few really desire completely free markets. There are occasionally good reasons for limiting or regulating any market to be something less than completely free, but these reasons need to be clear, explicit, and transparent. Please stop with the false dichotomy of completely free or completely regulated markets. Thanks to Dr. Schuler for helping to illuminate this point.

    2. I do not defend corporatism or restrictions on competition given out as preferences by regulators or politicians to corporations, unions, NGOs, QUANGOs, or anyone else.

    3. Without someone pulling very hard on the free market end of the rope all we will get is a strong surge towards ever further regulation and government control over all aspects of the economy.

    Like or Dislike: Thumb up 0 Thumb down 0

  27. Dustin says:

    Only if we get national insurance regulations to replace the state-level ones. I have zero desire to get a credit card industry-style “race to the bottom”, where all the health insurance companies would end up headquartered in a state that more or less lets them write the state’s insurance regulations.

    This is exactly right and really illustrates this whole debate.

    On one hand, it makes perfect sense to say, remove the government, that allowing competition across state lines will result in more competition and lower prices, the market doing what it does.

    However, that idea ignores the worst of the market. If we remove those boundaries, one state will allow the insurance companies to write the legislation and the whole nation will be forced into those rules, which will favor the insurance industry in total. This of course makes segments of us want to much regulation in turn.

    Like or Dislike: Thumb up 0 Thumb down 0

  28. Grewgills says:

    The president’s bill would grant the federal health and human services secretary new authority to review, and to block, premium increases by private insurers

    The Dutch do it and their system seems to work quite well.

    BTW consumers don’t generally get much choice now. Each market is an oligopoly and some near monopolies.

    Like or Dislike: Thumb up 1 Thumb down 0

  29. john personna says:

    “I don’t think charles austin’s question although presumably rhetorical was worthy of derision. Policies don’t need to comply perfectly with a view to be informed by it.”

    No, Dave. Too often “free market” arguments are designed to turn off thinking, not to inform.

    They are a black-and-white reduction.

    Like or Dislike: Thumb up 0 Thumb down 0

  30. J.W. Hamner says:

    Dr. Joyner, do you really think defending 39% premium increases in the name of the Pure Awesome of Capitalism is a good strategy? Honestly, if you want to call that “socialism” be my guest… you’re just going to make socialism more popular.

    Like or Dislike: Thumb up 0 Thumb down 1

  31. James Joyner says:

    Dr. Joyner, do you really think defending 39% premium increases in the name of the Pure Awesome of Capitalism is a good strategy?

    State control of the means of production and of pricing mechanisms is certainly socialism.

    As to the proper rate of premium increases, I haven’t the foggiest what’s merited by the fundamentals. I’m rather confident that real competition would make it harder for companies to dictate prices, however, so prefer to have the market — a real market, not one in which insurance companies are quasi monopolies — set prices.

    Like or Dislike: Thumb up 1 Thumb down 0

  32. J.W. Hamner says:

    As to the proper rate of premium increases, I haven’t the foggiest what’s merited by the fundamentals. I’m rather confident that real competition would make it harder for companies to dictate prices, however, so prefer to have the market — a real market, not one in which insurance companies are quasi monopolies — set prices.

    Well those increases were in the individual market, so they’re as close to “free market” as any health insurance in the US. I don’t know the specifics of Anthem any more than you do, but I’m skeptical at best that “more competition between insurances companies” is the answer. From what I can tell, this is totally a risk pool problem… in an economic downturn healthy people drop their health insurance to save $$$ and thus rates for people who need it (i.e. sick people) go up.

    I don’t see how you solve that outside of regulation socialism.

    Like or Dislike: Thumb up 0 Thumb down 1

  33. GS says:

    Have to say I saw this coming, though I hope you’re right about it being a tactic and not a solid stance (he doesn’t seem to have many). Agreement on cross-state competition.

    Like or Dislike: Thumb up 1 Thumb down 0

  34. No, Dave. Too often “free market” arguments are designed to turn off thinking, not to inform.

    They are a black-and-white reduction.

    The common term for your problem is projection. When it comes to turning off thinking nothing beats the Progressive Left’s demagoguery and appeals to emotion.

    Like or Dislike: Thumb up 1 Thumb down 0

  35. Rick DeMent says:

    hummnnn spam filter awful touchy

    Like or Dislike: Thumb up 1 Thumb down 0

  36. Michael Reynolds says:

    A better idea would be to create a securities market where we could bundle health futures into a collateralized health debt obligation. These instruments will enhance capital liquidity which the insurance companies can leverage to diversify investments.

    Exactly. Let us by all means rely on the magic of the marketplace. It’s not as if that ever goes so terribly wrong that we have to spend trillions in tax money to avoid a sudden descent to Thunderdome.

    The sharpest point in this thread so far was made by Triumph.

    I realize he’ll take that as an insult.

    Like or Dislike: Thumb up 1 Thumb down 0

  37. Has anyone seen Mr. Reynolds and Triumph together at the same time? Their posts are becoming indistinguishable without their names being attached.

    Like or Dislike: Thumb up 1 Thumb down 0

  38. Zelsdorf Ragshaft III says:

    Having read all the comments here. I noticed one which discussed the 39% rate increase. What was not stated was what State was involved. It was California. Guess what? California has a State Insurance Commissioner. He is an elected official. So a rate increase in CA must be approved by a representative of the people. I wonder who financed the Commissioners campaign? In California, there is no minimal policy which would be the equivalent of PL & PD in auto insurance. The State decides what is the least coverage will be available. Given that, transferring that power to the federal level does not seem to me to be a solution. It just changes the players. If you think insurance companies do not have to make a profit to operate, try running what ever you do (Anjin, that does not include teaching Marxism 101 at Subversive University) without money to see how long operations continue. If this sort of thing appeals to you (Anjin), may I suggest a transfer of operations to a workers paradise run be either Danial Ortega or Hugo Chavez.

    Like or Dislike: Thumb up 1 Thumb down 0

  39. Herb says:

    State control of the means of production and of pricing mechanisms is certainly socialism.

    Is that really what the Health Insurance Rate Authority is going to do, though? Control the means of production and pricing mechanisms?

    From a summary of Obama’s proposal:

    Improving insurance protections for consumers and creating a new Health Insurance Rate Authority to provide Federal assistance and oversight to States in conducting reviews of unreasonable rate increases and other unfair practices of insurance plans.

    The key phrases, “unreasonable rate increases” and “unfair practices.”

    They’re not going to be party bosses. They’re going to be G men.

    This concern about the free market, while impressive, is pointed in the wrong direction. After all, the free market can’t function with “unfair practices” now, can it?

    Like or Dislike: Thumb up 1 Thumb down 0

  40. Herb says:

    If you think insurance companies do not have to make a profit to operate, try running what ever you do {snip} without money

    This concern about the profitability of insurance companies is nice too. But also misdirected.

    Health insurance is so necessary that if an unprofitable insurance company folded, another would form to take its place. Even in a heavily regulated environment.

    The profitability of a company rarely comes from how a market is set up. It comes from how it operates within that market.

    Insurance companies won’t go out of business or lose money. They’ll change the way they do business so they can stay in business and make money. That’s how it works, man.

    Like or Dislike: Thumb up 0 Thumb down 1

  41. wr says:

    ZR — Calfornia is one of the 25states in which the insurance commissioner does not have the power to regulate rates for health insurance premiums, at least according to Diane Feinstein in a front page article in today’s NY Times. Now while she is not among my favorite politicians, I do tend to believe she knows a little more about the subject than you do.

    But I would like to thank you for the brilliant example of right wing rhetoric — first, you assume a fact. Then you elaborate on that “fact,” until you have spun it into proof of corruption and incipient communism.

    Like or Dislike: Thumb up 1 Thumb down 0

  42. Dave Schuler says:

    Health insurance is so necessary that if an unprofitable insurance company folded, another would form to take its place.

    ?

    Can you give me an example from another industry in which this has actually happened?

    Like or Dislike: Thumb up 0 Thumb down 1

  43. Michael Reynolds says:

    Dave:

    Retail. Restaurants. Any number of unprofitable businesses folded and were replaced by Wal-Mart and McDonalds. Just because Aetna can’t make money at a particular business doesn’t mean Company “X” can’t.

    Let the various BC’s and BS’s and Aetna fold. Good riddance. There’s nothing magic about those corporations or their approach to the market. (And before anyone claims that retail and restaurants are not regulated by the government let me just say: zoning, taxes, health inspections, employer obligations, safety.)

    Wal-Mart conquered by re-imagining the business. They moved to the edge of town where land was cheap and parking plentiful. They exerted relentless pressure on suppliers to drop prices. They streamlined their distribution. Does anyone think the health insurers are operating at Wal-Mart or Mcd”s levels of efficiency? Does anyone think they’re as ruthless at muscling suppliers?

    An efficient insurer, a motivated insurer, one that can’t just automatically jack up rates — a Wal-Mart of insurers — might be able to push down hospital costs as Wal-Mart has pushed down manufacturing costs. And like Wal-Mart they might find a penny of profit adds up when it’s a whole lot of pennies. If BC BS and Aetna can’t do it, maybe someone else can.

    Like or Dislike: Thumb up 0 Thumb down 1

  44. Dave Schuler says:

    Any number of unprofitable businesses folded and were replaced by Wal-Mart and McDonalds.

    I think that in a lot of places it was just the opposite. Wal-Mart and McDonalds moved in, businesses became unprofitable and folded. My guess offhand is that for every example you can give where Wal-Mart shut down and some other retailer moved in to take its place I can find a half dozen where the business wasn’t replaced and people had to drive farther (sometimes a heckuva lot farther).

    And that’s what we’re talking about, Wal-Mart shutting down. The Aetnas and Cignas replaced smaller competitors and the present regulatory environment assumes and fosters big companies.

    If Aetna can’t make money in a market, will Cigna step in to replace it? I doubt it. First, these guys are sheep—they flock to the profitable business not the unprofitable business. Second, Cigna’s actuaries will tell their management the same thing that Aetna’s told theirs.

    Like or Dislike: Thumb up 1 Thumb down 0

  45. Anthony Lorizio says:
  46. Michael Reynolds says:

    Dave:

    The essential problem as I’ve understood from your writing is that health care costs are too high and rising too fast. (And I’m sorry if I’m mischaracterizing.)

    Right now we have a supply chain in which everyone does very well: doctors make a lot, hospitals make a lot, pharma makes a lot, insurers make a lot, and consumers pay far, far more than in other developed nations.

    I assume that if doctors, hospitals, pharma and insurers each made less we’d pay less.

    From you I’ve learned that we need to increase the supply of health care (more doctors etc…) while decreasing the consumption of health care. But the suppliers naturally enough don’t want less money, and consumers naturally don’t want to get less care.

    So the way a Wal-Mart of insurers might handle this is to put serious pressure on hospitals to cut their costs. Which would, if successful, induce hospitals to increase the supply of doctors, let’s say, and thus lower their labor cost. But an innovative Wal-Mart company might go further and think well, wait a minute, why don’t we open our own medical schools? Why don’t we use our leverage to open up the accreditation process or the immigration process? Why don’t we open and run our own clinics? Why don’t we buy our own drugs? Why don’t we subsidize our own pharma research? Why don’t we off-shore more radiology? Why should we pay a dollar for a Band-aid when we can contract for our own supply and cut the cost to 20 cents? Why aren’t we Skyping patients, or creating technology that allows for diagnosis in the home?

    You know what 90% of my kid’s visit to the doctor amount to? A thermometer and a look in the ears. I have nice long Skype video visits with classrooms clear across the planet, why is it impossible to create a little USB-connected ear scope and have it read by a doctor in Bangladesh for three dollars? “Looks bacterial, not viral, your prescription has just been sent to Wal-Mart, you can pick it up in ten minutes. That’ll be five bucks and it’s already been charged.”

    There’s no incentive right now for insurers to be innovative or to start fights with hospitals over costs. After all, they can pass along the costs to us or our employers.

    Like or Dislike: Thumb up 1 Thumb down 0

  47. Dave Schuler says:

    But an innovative Wal-Mart company might go further and think well, wait a minute, why don’t we open our own medical schools?

    That’s a subject I’ve written on at length. The barrier to entry is accreditation.

    Why don’t we use our leverage to open up the accreditation process or the immigration process?

    The leverage would need to be on the physician’s guild. For the last century the operative philosophy has been “fewer better physicians”. The immigration process would only aid in GP’s (getting accredited in a specialty is harder) and that’s just about tapped out at this point. As I’ve written before, salaries for GP’s are pretty competitive among OECD countries at this point. I have reservations about the morality of that strategy but that’s another subject.

    Why don’t we open and run our own clinics?

    Because state and local governments control where they operate.

    Why don’t we buy our own drugs? Why don’t we subsidize our own pharma research?

    Basically, cost of entry.

    Why don’t we off-shore more radiology? Why should we pay a dollar for a Band-aid when we can contract for our own supply and cut the cost to 20 cents? Why aren’t we Skyping patients, or creating technology that allows for diagnosis in the home?

    Largely because people are demanding first dollar coverage and insurance won’t cover it. Additionally, there are no international accords that protect patients.

    You know what 90% of my kid’s visit to the doctor amount to? A thermometer and a look in the ears. I have nice long Skype video visits with classrooms clear across the planet, why is it impossible to create a little USB-connected ear scope and have it read by a doctor in Bangladesh for three dollars? “Looks bacterial, not viral, your prescription has just been sent to Wal-Mart, you can pick it up in ten minutes. That’ll be five bucks and it’s already been charged.”

    Again, licensing, insurance, demand for first dollar coverage, and lack of safeguards.

    I don’t know whether you’ve noticed my routine calls for increasing supply. The methods I’ve referred to for doing that include telemedicine. What you’ve talked about are exactly what I mean.

    Another method is automation. The honest truth is that there are lots of things that are being done now by docs that would be done better by machines.

    Like or Dislike: Thumb up 0 Thumb down 1

  48. john personna says:

    “The common term for your problem is projection. When it comes to turning off thinking nothing beats the Progressive Left’s demagoguery and appeals to emotion.”

    Given that I’m not on the Progressive Left, who’s blinded?

    Like or Dislike: Thumb up 0 Thumb down 1

  49. “The common term for your problem is projection. When it comes to turning off thinking nothing beats the Progressive Left’s demagoguery and appeals to emotion.”

    Given that I’m not on the Progressive Left, who’s blinded?

    Fair enough, though explain to me how you were able to infer my blindness from my words.

    Like or Dislike: Thumb up 0 Thumb down 1

  50. steve says:

    Much of radiology is being sent out of the country.

    Telemedicine has pretty limited utility. Very little for the procedural specialties. For primary care, you lose a lot by not being able to see, feel and touch your patients. Probably some Dermatology could be done, but even there, the 3-D effect is important. For those things you can do, you will need hi-def quality pictures. We are not there yet.

    Steve

    Like or Dislike: Thumb up 0 Thumb down 1

  51. Dave Schuler says:

    Hmmm. My understanding was that about 10% of radiology is being sent out of the country at this point, perhaps 10 or 12 overseas groups overall. If you’ve got some supportive documentation, I’d certainly be interested in seeing it.

    Significantly, radiology is among the highest compensated of medical specialties and, based on the info I’ve seen, U. S. radiology has been little affected by offshoring to date.

    There are other candidates. Some aspects of pathology, for example.

    As far as primary care goes, I see telemedicine as being primarily a solution to the problem of a lack of availability in many areas, particularly rural areas.

    Like or Dislike: Thumb up 1 Thumb down 0

  52. john personna says:

    Fair enough, though explain to me how you were able to infer my blindness from my words.

    We started with a quote about “free markets.” Those don’t exist, in an absolute sense. What we have are markets which are pretty much free, if we follow the rules, laws, and regulations, of the nations involved.

    Every nation on the planet, but especially the market democracies, are about seeking a balance. Private cars, public roads, etc.

    Whatever happened to the free market? What ever happened to private roads?

    Like or Dislike: Thumb up 1 Thumb down 0

  53. Raoul says:

    As someone mentioned, insurance companies are a classic oligopoly so let’s dispense with the free enterprise arguments. As to the 39% Aetna rate increase, I do not begrudge the company. The decision sounds very rational. I think is more proof of our dysfunctional system. Obama’s plan is far from perfect but it is a substantial improvement; I have yet to see a plan from the center right that works.

    Like or Dislike: Thumb up 1 Thumb down 0

  54. anjin-san says:

    Anjin, that does not include teaching Marxism 101 at Subversive University

    Kind of funny actually. I have a fairly senior position at a corporation that is quite profitable even in this economy. It is a reasonable bet that I am more successful in a capitalist marketplace than you are. Red baiting was pretty much discredited 50 years ago, can the angry right do no better?

    As someone who works in the actual business world, not a tea bagger fantasy of it, I know that corporations enjoy a vast power differential over their customers in the marketplace. Sometimes the use of this power is tempered and equitable, towards the end of offering real value for a consumers hard earned dollar. Often it is not. Think about this the next time you spend 3 hours trying to correct a simple billing error and get nowhere.

    A while back I bought a very high end laptop (my last PC!) from a leading manufacturer. 2K+. The thing was unstable out of the box, dog slow with frequent blue screen failures. I asked for an exchange. Nope. A refund. Nope. “Call our 800 tech support number”. I did some research and found supporting evidence that there was a systemic, serious to fatal stability issue with this model. Spent hours on the phone “I gave you 2 grand, please send me a computer that works”. Nope. Call our 800 number.

    Their method is simply to grind down a consumer who gave real value in the marketplace and expected real value in return. They put up a very high wall, and wait for you to get tired of trying to scale it, give up, and go away. Sadly, this is how a lot of our “leading” corporations go about making money these days. Capitalism is still the best system I know of, and I enjoy a very good standard of living by way of it, but it is not magic. It, like any system involving human beings, is subject to abuse and misuse. We need checks and balances in the marketplace.

    Like or Dislike: Thumb up 0 Thumb down 1

  55. anjin-san says:

    California regulator finds Blue Cross violations

    By ROBIN HINDERY, Associated Press Writer

    Monday, February 22, 2010

    13:18 PST Sacramento, Calif. (AP) —

    California’s insurance regulator said Monday his office has found more than 700 violations by the state’s largest for-profit health insurer, including late payment of claims, giving misleading information to consumers and failing to cooperate with regulators

    Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/02/22/financial/f121132S30.DTL&tsp=1#ixzz0gKboyhoN

    Like or Dislike: Thumb up 1 Thumb down 0

  56. Herb says:

    Health insurance is so necessary that if an unprofitable insurance company folded, another would form to take its place.

    Can you give me an example from another industry in which this has actually happened?

    Industries often outlive folding companies, although it’s more common for major companies to be sold, broken up, or merged than to outright fold.

    Surely examples of industries drying up once a particular company folds are hard to find.

    If Aetna can’t make money in a market, will Cigna step in to replace it? I doubt it.

    Maybe not Cigna, but someone’s going to figure out how to make some money. The demand for health insurance will still exist. If Wal Mart closes, will that dry up all demand for cheap consumer goods? Not at all. K-mart will raise their hand and say, “Remember me?” CostCo will waive their membership fee. Target will downscale.

    Companies will innovate or die.

    But I don’t think Cigna or Aetna will leave a market if the regulatory environment changes anyway. I think they will just deal with the changes. It remains true: you can make more money doing business than you can by not doing business.

    Like or Dislike: Thumb up 1 Thumb down 0

  57. john personna, wrong on many counts. But you have mastered setting up strawmen and knocking them down. Congratulations.

    Like or Dislike: Thumb up 1 Thumb down 0

  58. john personna says:

    What a coward’s response, Charles.

    What was I factually wrong about? Do market democracies not look for a middle? Do we not drive private cars on public roads?

    Do shallow conservatives not ignore all that to say that they believe in “free markets?” (Probably minutes after driving on public roads themselves.)

    What did I miss?

    Like or Dislike: Thumb up 1 Thumb down 0