How doctors contribute to the high cost of health care

At Better Medicine, Negoba points out how doctors contribute to the high cost of health care. Even though some doctors make high salaries (some specialists making extremely high salaries), the salaries are not the biggest part of the problem.

A doctor can be just as valuable as a controller of loss as a source of profit. In either case, the amount of money flow a doctor controls is easily 5-10 times the amount he or she makes in salary. Many larger systems with interests both at the office and hospital level will take losses on salary to retain a physician whose orders then net a profit in orders.

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A few thoughts on Obamacare – more questions than answers.

I often wonder why the Republicans chose the name "Obamacare" in their attempts to ridicule Barack Obama's "Patient Protection and Affordable Care Act." After all, the first half, "Obama," merely gives credit to the person who orchestrated the passage of the legislation and "care" is a benign word, even a pleasant word. Maybe they liked it better than the "Make the Rich Pay for Poor Children's Medical Treatment Act." Or maybe they thought that people hate "Obama" so much that just by saying his name it will make them angry. The bottom line is that it seems to be a lot like the phrase "Yankee Doodle," originally meant as an insult, but adopted and even embraced by the target of the taunt. Now that the new law has mostly survived, what does it mean for real-life Americans? There are many articles, like this one, that point out some things and make a few predictions, but no one seems to know the answers to two basic questions that are on my mind. What kind of insurance will ordinary Americans be able to purchase with regard to A) Quality of Care and B) Cost of Care? I'm not convinced that the new act has meaningful price controls on premiums or that the quality of care will be well-regulated. In fact, I will predict that the insurance companies will essentially take the following position: "Sure, you can have all of those new bells and whistles demanded by the Act, but you're going to need to pay for it." Here are some of those bells and whistles. And then the American public will likely not be witness to the intense behind-the-scenes lobbying that will result in 20% premium increases every year. I hope not, but I'm not optimistic. [More . . . ]

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Demonstration that the mainstream media is terrible

At Common Dreams, Cenk Uygur explains how bad the mainstream media is using the example of the individual mandate:

The individual mandate in the health care law was originally proposed by the Heritage Foundation, the most conservative think tank in the country. It was supported by almost every Republican in the country, including the first President Bush, Mitt Romney and conservative stalwarts like Orrin Hatch. Simply put, it was a conservative idea. There is no question about that; it is a fact. Let me immediately digress to point out how terrible our media is since about 2% of the country knows that fact. If you asked the average American now, I'm sure they would say it was a liberal idea originally proposed by Barack Obama. Another fact -- Barack Obama was originally opposed to the mandate during his campaign for president.
Uygur also uses this example to illustrate that Obama's strategy of trying to work with the Republicans was wrongheaded.

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Hypothetical grocery store illustrates health care “marketplace”

In his new book, The Righteous Mind: Why good People are Divided by Politics and Religion, Jonathan Haidt compares the American marketplace for health care to a hypothetical grocery store run the same way:

The next time you go to the supermarket, look closely at a can of peas. Think about all the work that went into it—the farmers, truckers, and supermarket employees, the miners and metalworkers who made the can—and think how miraculous it is that you can buy this can for under a dollar. At every step of the way, competition among suppliers rewarded those whose innovations shaved a penny off the cost of getting that can to you. If God is commonly thought to have created the world and then arranged it for our benefit, then the free market (and its invisible hand) is a pretty good candidate for being a god. You can begin to understand why libertarians sometimes have a quasi-religious faith in free markets. Now let’s do the devil’s work and spread chaos throughout the marketplace. Suppose that one day all prices are removed from all products in the supermarket. All labels too, beyond a simple description of the contents, so you can’t compare products from different companies. You just take whatever you want, as much as you want, and you bring it up to the register. The checkout clerk scans in your food insurance card and helps you fill out your itemized claim. You pay a flat fee of $10 and go home with your groceries. A month later you get a bill informing you that your food insurance company will pay the supermarket for most of the remaining cost, but you’ll have to send in a check for an additional $15. It might sound like a bargain to get a cartload of food for $25, but you’re really paying your grocery bill every month when you fork over $2,000 for your food insurance premium. Under such a system, there is little incentive for anyone to find innovative ways to reduce the cost of food or increase its quality. The supermarkets get paid by the insurers, and the insurers get their premiums from you. The cost of food insurance begins to rise as supermarkets stock only the foods that net them the highest insurance payments, not the foods that deliver value to you. As the cost of food insurance rises, many people can no longer afford it. Liberals (motivated by Care) push for a new government program to buy food insurance for the poor and the elderly. But once the government becomes the major purchaser of food, then success in the supermarket and food insurance industries depends primarily on maximizing yield from government payouts. Before you know it, that can of peas costs the government $30, and all of us are paying 25 percent of our paychecks in taxes just to cover the cost of buying groceries for each other at hugely inflated costs. That, says [David] Goldhill, is what we’ve done to ourselves. As long as consumers are spared from taking price into account—that is, as long as someone else is always paying for your choices—things will get worse. We can’t fix the problem by convening panels of experts to set the maximum allowable price for a can of peas. Only a working market can bring supply, demand, and ingenuity together to provide health care at the lowest possible price.
Haidt then compares the "market" for most health care products for the market for uninsured health care products, such as LASIK surgery, which highly competitive. More food for thought: Think of any other type of insurance that we buy to cover ordinary and expected costs (I admit that most health care policies also cover unexpected high cost occurrences). Health care insurance is thus a rather strange creature compared to most other kinds of insurance. Imagine homeowners insurance that covered the cost of cutting the grass, or the cost of a carpet wearing out. I suspect that health insurance is treated differently because many of us sacralize health. We treat it as sacred, meaning that we refuse to negotiate it as though it were a commodity, even in some instances where we might be better off subjecting some health services to the open market (such as we already do with many over the counter medications and devices).

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