Health Care

For those of you who are so inclined, feel free to look up the annual income statements that United Health turned into the SEC. For Dec-2001 their bottom line net income was 913 Million. For Dec-2009 their bottom line net income was 3.82 Billion. So excuse me, thats a 418% increase in net profit...oops sorry folks I underestimated. I have neither the time nor desire look up the numbers for the other 5.

In my post I mentioned the last decade. If someone wants to cherry pick data from last 5 years (which includes the worst economic downturn in the last 70+ years) to try and make their point, that's up to them.

While the insurance companies are most certainly entities that shamelessly profit off of denial of health care to people, they are not really to blame for skyrocketing costs. Collette is right, its has more to do with outsized demand. Everyone wants 2nd or 3rd opinions. Everyone wants to have a routine MRI to rule out the 1/10000 cases cause of something rather than use traditional methods of diagnosis and saving the MRI for when those methods are inconclusive.

Charles2005, I will have to disagree with in part on your point of outsized profits. Physician reimbursement has fallen steadily over the last few decades relative to inflation and cost of living increases. You can go to the bureau of labor and statistics and pull data that shows that physician salaries since 2001 have increased at a rate less than inflation in every year except 2008 and were actually net negative from 2003-2005. Any physician making enormous amounts of money is doing so through providing services that are elective and cash paying (plastic surgery, exotic pain management procedures, cosmetic dermatology, etc).

For sure docs make a good living. However, just remember these guys rack up on average between 100K-200K of debt and don't start actually earning real income until their mid 30s. As the people who are actually make the life and death decisions that affect you, me, and everyone else paying them a low 6-figure salary seems pretty reasonable to me. I checked and on average docs here in the US make about 50% more than docs in Europe. But, in those countries their medical school education is essentially free. So if we are going to cut their salaries, lets get rid of their debt too, otherwise we're all moving to Canada.

I couldn't find the smilie for "beating a dead horse"

Sharper Image - I know this is new for you - & welcome, you should know this group seems to have the same discussion on this topic (with the same arguments) about once every 1-2 months. Enjoy

For those of you who are so inclined, feel free to look up the annual income statements that United Health turned into the SEC. For Dec-2001 their bottom line net income was 913 Million. For Dec-2009 their bottom line net income was 3.82 Billion. So excuse me, thats a 418% increase in net profit...oops sorry folks I underestimated. I have neither the time nor desire look up the numbers for the other 5. Originally Posted by ASharperImage

Some time when you have a day or two, let me explain to you the concept of acquisitions and accounting changes -- that's what fueled most of that profit growth. Which btw was one company. It says nothing about what happened in all the others.

And the five years I showed included some of the best years in that industry's history. If I go back 5 years the numbers wouldn't be meaningful -- back then Aetna & CI where still in the pension business and two of the others didnt exist.

I couldn't find the smilie for "beating a dead horse"
Originally Posted by atlcomedy

If you find it, can I borrow it? Either that or the one banging a head against a wall.

Some time when you have a day or two, let me explain to you the concept of acquisitions and accounting changes -- that's what fueled most of that profit growth. Originally Posted by pjorourke

5-10 years from now we'll have analysts putting together graphs of the banking industry that basically make it look like all the shareholder value lost in Fall '08 never really happened...if they aren't already...because of the way they group/define the industry

....Let's just agree for the sake of argument that the Health "Insurance" Companies are doing ok....that's not a bad thing. A healthy business should be able to make a decent return...Sure, we all have horror stories & they aren't on our X-Mas card lists, but we should be glad they are pretty good at what they do -- afterall they aren't going anywhere...

Let's face it at their core, the competency or expertise of the "insurers" is managing a whole lot of (sensitive) data and facilitating payments. The oversight and/or direction may change but no matter what new system we end up with that critical function isn't going away. Who else is going to do it?

The argument is always that people need health care. Yes, they need food too, but nobody expects the government to provide food insurance that lets somebody have as much high priced steak and lobster as they want every day. Originally Posted by pjorourke

You can always tell the shoppers on food stamps in the poor neighborhoods. While the shoppers without food stamps budget their grocery dollars, the food stamp shoppers fill their baskets with lobster and steak. Heck, most people I know on food stamps can't spend them all and end up with an abundance at the end of the month.

re: Everyone getting an MRI done

One other piece not mentioned is soaring cost of malpractice. Doctor sees a patient. MRI has that 1/10000 benefit. Insurance pays for MRI. If patient does not get MRI and that would have made the difference doctor gets sued for loads of money. No brainer, send patient for MRI. doh

re: Everyone getting an MRI done

One other piece not mentioned is soaring cost of malpractice. Doctor sees a patient. MRI has that 1/10000 benefit. Insurance pays for MRI. If patient does not get MRI and that would have made the difference doctor gets sued for loads of money. No brainer, send patient for MRI. doh Originally Posted by discreetgent

Exactly -- it is not the cost of the malpractice claims that drive up health care -- that hasn't changed that much. It is the defensive practice of medicine that probably adds 15-20% to the cost.

re: Everyone getting an MRI done

One other piece not mentioned is soaring cost of malpractice. Doctor sees a patient. MRI has that 1/10000 benefit. Insurance pays for MRI. If patient does not get MRI and that would have made the difference doctor gets sued for loads of money. No brainer, send patient for MRI. doh Originally Posted by discreetgent

Not to single you out, because you clearly aren't alone...but I wish everyone would start putting "Quotes" around the word "Insurance" as it relates to healthcare.

It isn't "Insurance" that pays for MRIs; it is the "Healthcare Plan" that pays for them.

I couldn't find the smilie for "beating a dead horse" Originally Posted by atlcomedy

Found it!

While the insurance companies are most certainly entities that shamelessly profit off of denial of health care to people, they are not really to blame for skyrocketing costs. Collette is right, its has more to do with outsized demand. Everyone wants 2nd or 3rd opinions. Everyone wants to have a routine MRI to rule out the 1/10000 cases cause of something rather than use traditional methods of diagnosis and saving the MRI for when those methods are inconclusive.. Originally Posted by ASharperImage

Two kicks at the dead horse:

1. About 35 years old, Phil Gramm, then a Texas A&M economics professor, wrote a pamphlet discussing the then-proposed healthcare "reforms", and pointed out, among other things, that (1) free medical service would increase the demand and hence the price, and (2) government projections on cost all assumed the same level of usage post-reform as pre-reform, even though the consumers bore no cost post-reform. And it happened that the projected costs were wildly below the actual cost, due to item (1).

2. It's pretty amazing that insurance companies get lambasted for "cherry-picking" customers -- i.e., wanting to insure people who might be better risks. Every company tries to cherry-pick its customers. If banks and mortgage companies didn't try to cherry-pick customers and only provide mortgages and other loans to people with good credit, there would be huge defaults, and banks would fail, and the government would have to bail them out. Oh. Wait. That last bit sounds familiar.

For sure docs make a good living. However, just remember these guys rack up on average between 100K-200K of debt and don't start actually earning real income until their mid 30s. As the people who are actually make the life and death decisions that affect you, me, and everyone else paying them a low 6-figure salary seems pretty reasonable to me. I checked and on average docs here in the US make about 50% more than docs in Europe. But, in those countries their medical school education is essentially free. So if we are going to cut their salaries, lets get rid of their debt too, otherwise we're all moving to Canada. Originally Posted by ASharperImage

Seems fair to me. Let's pay for their education, and let them make a wage in the low 6 figures. We'd all be ahead.

Oh, BTW, if we pulled out of the Middle East, the money going to fight 2 wars would more than pay for HC.

Oh, BTW, if we pulled out of the Middle East, the money going to fight 2 wars would more than pay for HC. Originally Posted by charlestudor2005

Talking about "pulling out" and the cost savings that could be realized as a result may not be the best choice of phrase here....

We can all find a statistic or twelve to support our position. IMHO, the bill introduced by Senators Coburn and Burr, the so-called "Patient's Choice Act" is worth considering. I believe it addresses the best intentions of the political left and the fiscal and philosophical issues (including meaningful tort reform) of the right.

There will always be those among us that feel that free enterprise is evil and government is good, and each will produce statistics to support their position. This is, however, America, where personal responsibility is valued over government largesse but where those who are truly helpless are taken care of by those who are not.

Most people (70%+/- by polls) believe that the Dems are trying to increase government control to cement their power over the individual rather than address real health care reform issues, and those on the left seem to believe that the Republicans are trying to maintain the status quo and line the pockets of doctors, hospitals and insurance companies.

Until these two polarized political philosophies are reconciled vis a vis health care reform, I'm afraid we are in for mud-slinging and political games (like reconciliation) rather than real reform.