Current Topics
Coronavirus: The Plague of The 21st Century?
by pondering_it_all
1 second ago
My vote will be for Biden, and this is why
by Jeffery J. Haas
56 minutes 18 seconds ago
First Bernie Sanders Thread 2020
by perotista
Today at 09:47 PM
FISA IG Report
by rporter314
Today at 09:07 PM
I wonder what could have happened to our stockpiles of medical stuff?
by Hamish Howl
Today at 07:48 PM
Is it too soon to be talking 2020?
by perotista
Today at 05:38 PM
Duty
by perotista
Today at 02:12 PM
The Departed - 2020
by Jeffery J. Haas
Today at 04:13 AM
RoundTable - SPRING 2020
by Greger
Today at 04:01 AM
Killing bacteria and virus with ozone
by pondering_it_all
Today at 12:23 AM
Fox news worred over getting sued
by pondering_it_all
Yesterday at 10:04 PM
ventilators
by pondering_it_all
Yesterday at 12:46 AM
The Debate: Is America’s future capitalist or socialist?
by Greger
Yesterday at 12:42 AM
Trump really doesn't
by pondering_it_all
03/29/20 07:52 PM
What is the value of a human life?
by pondering_it_all
03/29/20 06:46 PM
Green New Deal
by logtroll
03/29/20 01:34 AM
small nuclear reactors (SMR)
by jgw
03/27/20 06:49 PM
DOJ seeks new emergency powers amid coronavirus pandemic
by Hamish Howl
03/25/20 07:22 PM
The coming crash
by chunkstyle
03/25/20 03:53 AM
Underclass
by Jeffery J. Haas
03/23/20 09:46 PM
Forum Stats
6290 Members
60 Forums
16859 Topics
297602 Posts

Max Online: 294 @ 12/06/17 12:57 AM
Google Adsense
Page 1 of 3 1 2 3 >
Topic Options
#228103 - 07/08/12 04:29 PM How the ACA reduces medical costs
NW Ponderer Offline
Moderator
Carpal Tunnel

Registered: 09/09/11
Posts: 17329
This is going to be a wonky post, but there has been a lot of mis- and dis-information spread about the Affordable Care Act, so I wanted to summarize a few points about how it will reduce medical care cost when it is fully implemented. Most people assume that it only affects health insurance costs, but that is that tail, the dog is medical costs - and it does that too.

Medical costs are going up at an alarming rate, there is no question about that. A major reason for that is that much of that is in the realm of emergency medicine usage by people without insurance. Emergency rooms are required to see people even without insurance - Uninsured Put a Strain on Hospitals. Uncompensated Care is borne by all of us, because eventually those costs are shifted to paying customers - for most of us, that means insurance, and insurance premiums.

So, how does the ACA reduce medical costs? 3 ways (oh stop that!): First, it increases the insurance pool. Second, it shifts the kind of care people will seek (reducing emergency room visits, and increasing preventative care). Third, it changes the for-profit collection method (capping overhead).

First, "the pool." The private insurance pool is smaller than most people think. Assuming a population of 330 million: 40 million (for argument's sake) are uninsured; an additional 8 million get care through the VA. So, the "insurance pool" is just about half of the population: 174 million.

Now, just for argument sake, I am going to make up numbers. Assume that the total insurance health care bill is $100 billion (that includes shifted costs for uncompensated care). That would mean that everyone in the pool pays $575 to cover the cost of losses plus the insurance overhead cost, which is $125, for a premium of $700 (I wish!).

Here's how the ACA will reduce your bill: First, the pool will be enlarged by 40 million people. That brings the average cost down to $467. Second, the overhead is maxed out, say at say $50. Each person’s premium drops to $517.00. Already you’ve saved $183 – But wait! There’s MORE! Because we’ve shifted people from emergency rooms to preventative care, those shifted costs will be cheaper – say, 30%. So, that first number drops from $467 to $327, and the second number also drops 30%, to $35, so now your premium is only $362… almost half what it was before.

Sound about right?
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

Top
#228104 - 07/08/12 04:56 PM Re: How the ACA reduces medical costs [Re: NW Ponderer]
NW Ponderer Offline
Moderator
Carpal Tunnel

Registered: 09/09/11
Posts: 17329
I realized something after I posted this, mixing apples and oranges again - hard not to do. In the above example, 30% of that reduction was lower health care costs. The rest is reduced premium costs. There are other variables, of course, that also affect prices, and some of those costs will be borne by taxation in other ways (to pay for those who cannot afford insurance on their own), but the process is about right, and will result in a net reduction in health care costs.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

Top
#228127 - 07/08/12 09:17 PM Re: How the ACA reduces medical costs [Re: NW Ponderer]
Scoutgal Offline
Administrator
Bionic Scribe

Registered: 01/23/01
Posts: 27583
Loc: CA USA
Thanks for the explanation, NWP! It is well worth the read! ThumbsUp
_________________________
milk and Girl Scout cookies ;-)

Save your breath-You may need it to blow up your date.





Top
#228135 - 07/08/12 10:21 PM Re: How the ACA reduces medical costs [Re: NW Ponderer]
NW Ponderer Offline
Moderator
Carpal Tunnel

Registered: 09/09/11
Posts: 17329
Oops... apparently in my "edit" of my figures in the original post, I deleted more than I intended. The paragraph with the figures should have said:
First, "the pool." The private insurance pool is smaller than most people think. Assuming a population of 330 million: 40 million (for argument's sake) are uninsured; 108 million get medical care through Medicare/Medicaid; and an additional 8 million get care through the VA. So, the "insurance pool" is just about half of the population: 174 million.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

Top
#228149 - 07/08/12 11:29 PM Re: How the ACA reduces medical costs [Re: NW Ponderer]
Scoutgal Offline
Administrator
Bionic Scribe

Registered: 01/23/01
Posts: 27583
Loc: CA USA
Thanks for the correction!
_________________________
milk and Girl Scout cookies ;-)

Save your breath-You may need it to blow up your date.





Top
#228157 - 07/09/12 12:45 AM Re: How the ACA reduces medical costs [Re: NW Ponderer]
rporter314 Offline
veteran

Registered: 03/18/03
Posts: 7082
Loc: Highlands, Tx
Quote:
Sound about right?

well ... ahh ... no

Quote:
how does the ACA reduce medical costs?

you said medical costs i.e. cost drivers

1. insurance pool
2. emergency room visits
3. capping overhead

Insurance is a result of provided care ... if that cost rises, premiums rise ... no one is in the business to sell below cost so they can go broke ... i.e. insurance is a passive cost

fascinating article but it had few facts worth noting ... here are some from 2008:
The uninsured accounted for <1% of GDP or in another way health care costs were 15.4% of GDP. Estimates of costs for uninsured ranged from $34B to $130B, which is consistent with the 1% number.

Remember that about 25% of uninsured are illegal so would continue using services.

Now some crazy stuff. Emergency room services have notoriously inconsistent costs. An uninsured person may be charged $500 for a service and an insured person would be charged $5000 for same service. Unless and until we have reliable sources for costs which are passed through to the insured, all we are doing is speculating in an area which has little impact on overall health care costs.

Capping administrative overhead has some we are looking at something or the order of 6% change in costs of insurance, or if we are looking at insurance cost capping, all that happens is the costs are shifted directly to premiums. These folks can not remain in business if they are nor making money.

So of your medical reductions, 2 are simply insurance related and the other has sketchy data.

Let's back up and consider a couple of ideas. You mentioned preventative health care. I think it is clear to everyone that Americans are a relatively unhealthy lot. When costs are prorated we far outstrip other industrialized countries. One possible way of looking at that fact is the difference is embedded in unhealthy people who obviously require more medical attention. Now suppose that we had healthy people so the difference is erased. It should now be evident that even with reduced total cost the per capita costs (of people who needed medical attention) remain the same. All that has happened is the insurance costs have been reduced immediately but since the remaining costs are still high and will continue to rise, those cost increases would still be passed on to consumers. So we are still caught in the conundrum that we can reduce costs temporarily but if those costs continue to rise we will continue to be faced with increased insurance premiums.

The key words are "continue to rise." At some point we must discuss the goals we have in mind. We can not survive economically if the current costs are 15.4% GDP and by 2017 it is estimated to be 19.5% GDP, for a whopping 25% increase.

I think you can see where I am going with this, but then, these are only passing thoughts on a complex issue.
_________________________
ignorance is the enemy
without equality there is no liberty
Get off the crazy train!!! ... dump Trump

Top
#228159 - 07/09/12 12:51 AM Re: How the ACA reduces medical costs [Re: NW Ponderer]
Ted Remington Offline
old hand

Registered: 07/09/08
Posts: 4939
The real immediate concern is actually the strain on our medical services delivery system. Demand is going to skyrocket as all those people who were either uninsured or underinsured begin making full use of the med structure.

The costs have to rise dramatically to try to allocate and control the demand. My personal physician is terrified. He cannot cope with a twenty-percent increase in workload and still provide quality care.
_________________________
Take the nacilbupeR pledge: I solemnly swear that I will help back out all Republicans at the next election.

Top
#228160 - 07/09/12 01:05 AM Re: How the ACA reduces medical costs [Re: NW Ponderer]
Ken Condon Offline
enthusiast

Registered: 06/14/07
Posts: 3870
Loc: Eugene, OR
And then there is this idea:
Quote:
Here is a health-care reform that is notable for never being proposed by the people who ought to be for it, namely conservatives: repeal the Emergency Medical Treatment and Active Labor Act, the 1986 law that requires hospitals to treat urgent-care patients regardless of their ability to pay.

Conservatives say the government cannot and should not require people to buy health insurance. The trouble is that the government can and does require hospitals to treat people who don’t have health insurance and who can’t pay. The result is a free-rider problem that runs to tens of billions of dollars a year and, worse, destabilizes the whole system.

According to conservatives, the government should not make people buy insurance; it certainly should not provide coverage for them. That would seem to eliminate the two main ways to deal with free riders. One obvious possibility remains. If you can’t pay for medical treatment, you can’t expect to receive it. Period.

Oddly, proponents of small government and personal responsibility do not propound that idea. It was hinted at, however, in a Republican presidential debate last September. The moderator asked Representative (and physician) Ron Paul, a hard-liner on the subject of individual responsibility, whether an uninsured person in need of urgent care should be left untreated, possibly to die. Answer (of course): “No.”

As Paul spoke, Tea Party types in the audience could be heard shouting “Yes!” They, at least, were being intellectually honest. If conservative politicians were as forthright, we might be able to have the debate we need.


From a recent Atlantic Monthly article on “Big Ideas."
_________________________
Get your facts first, then you can distort them as you please.

Top
#228177 - 07/09/12 03:25 AM Re: How the ACA reduces medical costs [Re: NW Ponderer]
NW Ponderer Offline
Moderator
Carpal Tunnel

Registered: 09/09/11
Posts: 17329
rp, you make some good points, but let me just focus on one particular element: emergency services, because that is one element that has the most bang for the buck.

I have personally been in the emergency care realm (I was an EMT for a county EMS), and I have close friends who still are. One would think that a visit to a doc would be the same in an emergency room as it is in a doctor's office - since the same service is rendered - but it is not. Because of the ancillary requirements for an emergency service (e.g., standby ORs, equipment, etc.) these costs are borne by the emergency department and passed on to users. It is true that "costs" vary wildly between departments, and even depending on the billed party. Also, often the (uninsured) person seeking treatment has waited until a chronic condition becomes acute (e.g., diabetes). The services then required in an emergency room (e.g., amputation) are much more expensive than treatment of the underlying chronic condition might have been (e.g., insulin). That was my point with regard to preventative services being less expensive than emergency services. Also, with less pressure on the emergency department, the emergency department can be more closely aligned with its purpose, and fewer costs will be passed on to other payers (e.g. insurance carriers). The cost of emergency services themselves will thus go down.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

Top
#228179 - 07/09/12 03:42 AM Re: How the ACA reduces medical costs [Re: Ted Remington]
NW Ponderer Offline
Moderator
Carpal Tunnel

Registered: 09/09/11
Posts: 17329
Originally Posted By: Ted Remington
The real immediate concern is actually the strain on our medical services delivery system.
I would simply amend that to say "a real concern..." It is a legitimate concern that "demand is going to skyrocket as all those people who were either uninsured or underinsured begin making full use of the med structure." It is something that needs to be addressed and one of the broader issues that needs to be addressed for overall health care reform, but... I think a rise, but not a skyrocket. Many of those people have already been getting services, just on an emergency, rather than preventative, basis. There will be a need to reallocate resources to family and primary care services, but the reduced load on emergency departments will help that process. In my area we have seen a significant increase in "urgent care" and similar clinics (e.g., zoomcare; Multicare; Nextcare). One of the reasons such clinics can be cost efficient is that they rely heavily on Nurse Practitioners and Physician Assistants to provide primary care services, and do not have to maintain all of the ancillary services a full-fledged emergency room would require (trauma centers).

Your personal physician should not worry overmuch, Ted, as he will not personally have to bear the load, and is not required to see any patient that wanders in.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

Top
Page 1 of 3 1 2 3 >

Who's Online
0 registered (), 30 Guests and 4 Spiders online.
Key: Admin, Global Mod, Mod
Newest Members
danarhea, RoughDraft274, CPWILL, Kevin Kohler, Keridan
6290 Registered Users
A2