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Ron Radosh

This conclusion is not one likely to be appreciated or taken to heart by liberal advocates of universal health care, or socialized medicine. Calling a Republican position “commonsense” is not what one expects to read in the MSM. Later, when he addresses the issue of the care cost curve, Brill concludes that Obamacare does nothing to restrain cost, contrary to the president’s claim that it does:

[The policy experts] know what the core problem is — lopsided pricing and outsize profits in a market that doesn’t work. Yet there is little in Obamacare that addresses that core issue or jeopardizes the paydays of those thriving in that marketplace. In fact, by bringing so many new customers into that market by mandating that they get health insurance and then providing taxpayer support to pay their insurance premiums, Obamacare enriches them. That, of course, is why the bill was able to get through Congress.

Obamacare does some good work around the edges of the core problem. It restricts abusive hospital-bill collecting. It forces insurers to provide explanations of their policies in plain English. It requires a more rigorous appeal process conducted by independent entities when insurance coverage is denied. These are all positive changes, as is putting the insurance umbrella over tens of millions more Americans — a historic breakthrough. But none of it is a path to bending the health care cost curve. Indeed, while Obamacare’s promotion of statewide insurance exchanges may help distribute health-insurance policies to individuals now frozen out of the market, those exchanges could raise costs, not lower them. With hospitals consolidating by buying doctors’ practices and competing hospitals, their leverage over insurance companies is increasing. That’s a trend that will only be accelerated if there are more insurance companies with less market share competing in a new exchange market trying to negotiate with a dominant hospital and its doctors. Similarly, higher insurance premiums — much of them paid by taxpayers through Obamacare’s subsidies for those who can’t afford insurance but now must buy it — will certainly be the result of three of Obamacare’s best provisions: the prohibitions on exclusions for pre-existing conditions, the restrictions on co-pays for preventive care and the end of annual or lifetime payout caps.

Call it, if you will, the law of unintended consequences.

If you are under 65, and think your insurance policy covers what health care you must have in the face of a medical catastrophe, think again. Read Brill’s findings about the specific cases of individuals whose savings and money disappeared after seeking necessary treatment, only to find that their insurance hardly helped at all. He makes an argument that lowering rather than raising the age in which Medicare kicks in will actually help lower costs, and make the market more competitive. Brill knocks the drug industry and the Obama administration for getting industry approval for Medicare by agreeing not to allow negotiating to lower drug prices, and also not allowing comparative-effectiveness research on drugs. 

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All Comments   (15)
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Free market economics don't work in medicine. That's why the rest of the world does so much better than we do in providing health care to everyone. Brill's work simply reiterates the old messages about health care policy The American health care system is an abomination that only exists because our political system is broken. If only the Republican party would disband, we'd be able to sort things out in short order...
1 year ago
1 year ago Link To Comment
Actually, Mr. Radosh, the healthcare market is not one of monopoly (a single seller) but of monopsony (a single buyer). And that single buyer is, you guessed it, the federal government. The government has extensive bargaining power through Medicare, so much so that health insurers base their rates on what Medicare will charge for a service. Usually, Medicare undercuts pricing for health insurers and pays a flat rate to healthcare providers. Providers in turn mark up all of their services with the intention of maximizing how much they can get based on Medicare rates.

Why is Tylenol marked up 10,000%? A better question is why does it cost $100 simply to see a doctor for five minutes? Pricing is out of whack in the healthcare market; getting to a true market would require a repeal of Medicare at best or, at worst, a law that severely curtails that program to a service for the indigent or truly needy.
1 year ago
1 year ago Link To Comment
There is no end to the expense and no society can have the means to provide every perceived need to stave off unpleasantness, discomfort, dissatisfaction with one’s inherent health, physique, or age, and the inevitable death of every individual under widely different circumstances and degrees of unpleasantness. The issue of governmental subsidy of “orphan drugs” is an example of these issues at play. Do we socialize every personal problem? On the other hand, who should draw the line limiting how far to go? A “death panel” in some bureaucracy? The ultimate fact to remember is that denial of coverage is not denial of care. Insurance companies do not kill people. Living results in death. As William Penn said, “We can not learn to live until we learn to die.”
1 year ago
1 year ago Link To Comment
A sizable fraction of the patient pool have chronic problems of obesity, substance abuse, nutritional neglect, and problems related to live-style. Certainly many lower-income people and elderly people fall in this category. The implicit expectation held out by the health activists is that all people have some inherent right to the same condition of health (not just access to care) as the “privileged.” This is an impossible goal, and to engender that hope in the popular mind is to blame poor health, and ultimately death, on class difference. This is absurd and guaranteed to persist as a source of unending social division
1 year ago
1 year ago Link To Comment
The problem with medical care by government fiat actually is not failure to resort to market forces but rather that the government wants to extend comprehensive care to a huge segment of the population who can not (or even if they could, won't) pay for medical care. These include the people presently serviced by hospital "emergency" departments and those who would not pay $1 for a routine exam instead of a drug fix, fast food, the NY Times, or a tattoo, i.e., they are not in the market for medical care. To be responsive to market forces, one has to be a player in the market. These folks are not in the market and will not be so under the new government "plan," which ordains that comprehensive medical care is not something one chooses but has inherently.
1 year ago
1 year ago Link To Comment
Mr. Radosh,
Your point on the integrity of the article is very well taken.
When I read this, I couldn't believe I was reading main stream JOURNALISM again, TIME, no less. This could have appeared at PJ's or COMMENTARY. He followed the topic and layed it out cogently, deliberately and, I think, fairly. Call it 'journalism' or call it 'chops.' Maybe TIME will take serious note. Somebody at TIME thought this was worth publishing. Maybe they'll do it again.
1 year ago
1 year ago Link To Comment
Well, if you don't think traditional journalism is dead, look at what they are promising to do to Bob Woodward "after he is dead" and can't respond to their character assassination. He'll have a lesser reputation than a troll at Huffington Post.
And due to "sequestration", band aids will be removed slowly, creating much pain. And you really don't want to experience a "waxing" at any VA facility!
1 year ago
1 year ago Link To Comment
"He [Brill] makes an argument that lowering rather than raising the age in which Medicare kicks in will actually help lower costs, and make the market more competitive."

That is an argument for single-payer--with Medicare as the single-payer system. The New Republic was correct: A low eligibility age for Medicare is equivalent to a single-payer system.

If you lower the eligibility age for Medicare way down, then most Americans will be on Medicare.

In fact, that's what the advocates for single-payer are now proposing: Keep lowering the eligibility age for Medicare gradually, a bit lower year after year, until we're all on Medicare. "Medicare for All" is their new slogan.
1 year ago
1 year ago Link To Comment
"...America does not have a health care system based on the free market..."

This is certainly not some new revelation! The Nixon administration and the Heritage Foundation was on this problem way back then and was the birthplace of most of Obamacares framework.

The problems that have arisen are 3-prong in the private sector healthcare industry. 1) For profit insucrance companies, 2) employer provided healthcare subsidies and 3) employees have least stake in their healthcare.

For Profit Insurance Companies - They are enablers of the healthcares runaway circular and arbitrary inflation. They simply pass-through the inflation and adjust services covered to protect their profit line.

Employers Subsides - Employers who meet the employee numbers threshold are mandated under law to provide healthcare insurance for their employees. They, like insurance comapnies are helpless to combat the healthcare industries circular and arbitary inflation passed through from the insurance companies. They, like insurance companies are for profit and will pass along a portion of the inflated rates on to their employees to help buffer their profit.

Employees - Most employees, though they're 'boxed' in, have the least economic investment in their healthcare and are most often faced with insurance companies and employers selecting group policies with continuous reduced service benefits and increased monthly premiums.

Employers and employees become victimized by both the healthcare industry and insurance companies 'pass-through' circular and arbitrary inflation for goods and services. On average, the healthcare industry inflates at the rate of 3.5% to 5.5% per annum. That surpasses the national rate of inflation by multiples! Eventually, this circular and arbitrary inflation becomes ECONOMICALLY UNSUSTAINABLE!

Now, consider these facts and apply them to healthcare costs to municipalities, counties, States and the Federal Governments VA healthcare, Medicare and Medicaid, child healthcare programs, many of the military services healthcare programs and all public education institutions, all payed by the TAX PAYERS.

The core principal of free market enterprise is competitiveness. Among physicians and hospitals, there is virtually zero competitiveness! Among land and air ambulances, there is virtually zero competitiveness. Among medical device and equipment manufacturers, there is virtually zero competitiveness. Among pharmacuetical companies, there is virtually zero competition for branded drugs. Among generic pharmacuetical manufacturers, there is virtually zero competitiveness.

Primary care physcians have developed a 'formula' for which they use based on the 'desired income' they wish to make. Operational liabilities for office or clinic plus their desired income. They they apply this total to a standard insurance and co-pay rate per patient to see how many patients they must see and for how many minutes during their hours of daily operation. So, when you walk into many offices and get that feeling that you're cattle being pushed through a sales ring -- you are correct!

Stopping at this point, all I''l leave you to ponder is this! The entire healthcare industry is corrupted from top to bottom and every crook inbetween -- a by product of a monopoly 'industry' out of control with virtuall NO restraints placed on it as it travels at mach speed towards economic unsustainability and wrecking our nations economy.
1 year ago
1 year ago Link To Comment
The high mark-ups hospitals impose on patients carry lots of hospital overhead. True, one can buy Tylenol or a generic equivalent at the corner drug much more cheaply, but that isn't what is happening. That $1.50 per pill also covers the cost of the hospital maintaining its own pharmacy on premise and the cost of having somebody move it to your bedside, make a record of that, and give it to you.

Brill's notion of price controls carries all the folly that such schemes usually do. Distortions will be introduced; certain items or procedures will become unavailable because costs rise faster than the price controllers can react and the hospital or physician won't sell the procedure at a loss. I can remember the last time something like that was tried, during the Nixon Administration (!), when wage and price controls were implemented to fight inflation. While they lasted only about 18 months before everybody was ready to throw in the towel, even in that short time things disappeared out of the supermarkets, notably lots of meat products.

But I do believe we can never have a free market in complex medical care: it's just too complicated. One of the assumptions behind free-market theory is that consumers have good ("perfect") information. But how can that condition be satisfied when the whole matter is so complex only highly trained medical people can really know what's going on?

One thing is certain: it will be expensive and only more so. It's (highly trained) labor intensive, it's high tech, and it's third party pay.

1 year ago
1 year ago Link To Comment
I don't believe that the cost of nurses to give you the medicine and make a record of it is included in the cost of the Tylenol. The nursing budget is separate from the pharmaceutical budget.

What does make the pharmaceutical budget expensive is that it's a 24x7 pharmacy that can never run out of any medications. Even if your doctor prescribes some rarely used chemotherapy med, it has to be available--immediately.
1 year ago
1 year ago Link To Comment
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