The Government Debt Train Nudges Closer To Collision

[EyeKhan]

Medicare is also supported by our entire economy via 2.9% payroll tax that is utterly not sufficient to pay for current needs, let alone an expanding population of elderly folk. As much as I shuddered to go there and find this, I was fortunately able to find it easily though Google: http://www.ataricommunity.com/forums...6&postcount=14

It's a totally legitimate angle. We can't afford it. We can't afford what we're spending on now.

Without bothering to read anything to further this argument, I think the next question for you POV is this: What are you suggesting as the alternative? Abandon any attempt at a sensible health care system, dismantle Medicare, and let people fend for themselves? Those who can pay for health care get health care. Everyone else gets abandonded to whatever disease kills or maims them?

The elephant in the room asks, "What do we do with all the old people that keep living longer?"

That's easy. They won't live longer. They'll die much younger of one of a variety of diseases and neglect. Problem solved. I've read this is the real reason SS and Medicare were never funded correctly - they were designed to deal with the life excpetancies at the time. What nobody apparently knew was that old people tended to die younger because they were destitute. Cat food and all that.... Sad. Start taking care of them and woops, look at this, people are living a LOT longer than 62. Damn.

[GGT]

Without bothering to read anything to further this argument, I think the next question for you POV is this: What are you suggesting as the alternative? Abandon any attempt at a sensible health care system, dismantle Medicare, and let people fend for themselves? Those who can pay for health care get health care. Everyone else gets abandonded to whatever disease kills or maims them?

That's easy. They won't live longer. They'll die much younger of one of a variety of diseases and neglect. Problem solved. I've read this is the real reason SS and Medicare were never funded correctly - they were designed to deal with the life excpetancies at the time. What nobody apparently knew was that old people tended to die younger because they were destitute. Cat food and all that.... Sad. Start taking care of them and woops, look at this, people are living a LOT longer than 62. Damn.

They kept the mechanics from the 60s tho, long after life expectancy started getting higher, and were slow to change the age requirements. What started as a net for widows and orphaned children took on a life of its own. Might say the same for food assistance and subsidies for housing: the original criteria for "poverty" wasn't updated as our lifestyles improved. Poor then is not the Poor now, or what its face looks like. Today we have the Working Poor, most everyone has shelter and food, often a car and microwave, water and electricity....but they can't get proper medical care, or see a dentist, let alone save for retirement?

One way to cull the herd?

[EyeKhan]

They kept the mechanics from the 60s tho, long after life expectancy started getting higher,

Well, that's what I was trying to say.

One way to cull the herd?

Yeah, lets be cruel like nature is. Money can decide who lives and who dies. Weren't born with a silver spoon? Couldn't go to college or didn't get the right degree? Well, you get to live as long as your luck holds out. Break a leg? Can't work? Friends and family can't support you? Go somewhere to die then. You think Dread's America would at least set up some euthanasia clinics so people could have some dignity when they die? Or do we just discover them rotting in their shit hole apartments when they stopped paying the rent? Or some kids find them under a bridge or in a ditch somewhere?

[GGT]

Different type of Death Panel. Man this is depressing!

Maybe this is just a Transition period, that's going to cost boat loads of money until we get over the hump. It's one thing to have longevity secondary to good health (nutrition, vitamins, exercise, treating easy problems before they become immense and systemic, ounce of prevention worth pound of cure).

It's quite another to basically prop up sick lives with surgeries, unproven meds and expensive treatments, spending something like 80% of elder care in the last few months of life, delaying death more than anything. Maybe our kids, or their kids, will have fancy mainstream biologicals and genome therapies that actually Cure and Prevent that won't cost millions of dollars.

Or Quietus suicide packs, available OTC at their local Walgreens.

[GGT]

Nix that biologics breakthrough. Seems congress has agreed to Big Pharma lobbyist demands, and their special sauces get to keep a 12 year patent before any affordable generics hit the scene.

[wiggin]

You think biologics are cheap? In comparison to small molecule drugs, not only are the fixed development costs the same or higher, but the marginal production cost is much higher than a simple chemical.

[GGT]

Then maybe post in the thread about R & D funding? It was an off-the-cuff comment to Kahn, in our culling of the herd tangent.

[GGT]

Anyone mind if I expand this beyond the "entitlements" in health care (since that's covered in other threads) and take it to an infrastructure level? Dread posted about our legacy costs related to health bills, but what about all of our bridges, roads, levees, sewerage treatment, water purification, electricity....connected to our commerce and transportation of goods? There's a lot of government debt and federal funding involved. No clue what % of GDP that would mean.

Hell, we can't even agree who should pay for our communication networks, let alone our physical networks. Would the same comment be made----We can't afford to upgrade our infrastructure, fuggetaboutit---we're broke!?

[wiggin]

Yeah, but that 'culling the herd' thing is its own digression. To get back to the point: medical care is expensive and a limited resource. In one way or another, people are going to either pay for it or ration it in some way - there are no free lunches. Arguing that the current system is unsustainable does not immediately lead one to the conclusion that we're going to euthanize our old people. That's lazy thinking. For that matter, other social safety nets (read: Social Security) are not particularly great. It's tough to live on SS benefits without supplementary retirement income, which the US expects people to have saved up on their own (albeit with some incentives). Why can't anything beyond basic medical care (e.g. prescription drugs, certain procedures, etc.) be up to the patient? FICA is not a bottomless pit.

I can't speak for Dread or others here, but I would like a comprehensive healthcare reform package, just one very different from what is currently proposed. Some bits would remain - restrictions on rejecting people with preexisting conditions, health insurance exchanges, and a beefed up version of tort reform. To pay for any additional programs, an easy solution is to remove the huge tax breaks given to employers for spending on healthcare of their employees, though that would have to be looking at closely. Some sort of administrative reform would be necessary as well to reduce the amount of paperwork insurance companies require and produce.

So, with some simple solutions, we have not appreciably changed the access issue (except through secondary effects) but have reduced a few of the major costs (administrative, defensive medicine, etc.) and enhanced competition between insurance agencies, hopefully driving down costs. This would probably reduce Medicare/aid costs some, and might help contain cost growth.

More aggressive measures would have to look at the fundamentals of the current system. Medicare prescription coverage was never funded adequately, and would have to be significantly changed or eliminated. One option would be to allow Medicare to negotiate with drug companies on costs - they have a near monopoly on sales of many drugs in the US and have a powerful bargaining position. Currently restricted by law, but it's certainly a possible solution (though one I'm not super happy about). Another is to actually fund it appropriately.

Other fundamentals that bear thinking about are the fee-for-service model. It rewards extra procedures (at least in private practice) and might not make a whole lot of sense. Some sort of decoupling between how much hospitals/doctors make and how many procedures they perform might be better. Fees could be levied for results, though it gets tough to fully implement with patient compliance issues, etc.

Okay, say we've managed to contain cost growth and reduce overhead - among the main issues in spiraling costs. Ways to further reduce the costs of care are to emphasize prevention and healthier lifestyles through public health initiatives - the payoffs are quite large down the road. We have one other sticky issue to think about, though. One of the major issues is that a huge chunk of our medical care costs go into the last few months of a patients life, performing largely futile procedures (on average, that is). I'm not advocating euthanasia, but we should have a serious national discussion about whether individuals should value quality of life or mere quantity, and how our ethical guidelines should affect that. More and more people are using things like 'comfort care only' or DNRs on their living wills - perhaps we could learn something from that, and realize when enough is enough. This is not something that should be legislated, though.

So, we've dealt with most of the main problems more or less. All we have left is access. With some new restrictions on insurance companies (e.g. preexisting conditions rules and HIEs and the like) more people who want insurance but cannot get it would be able to do so. People who aren't interested in insurance (generally because they are young and healthy) would be free to gamble on it (though perhaps with some form of penalty if the gamble goes wrong). Then we're left with people who honestly can't afford it - those who are too poor for most forms of individual insurance, but too rich for MedicAid/etc. The pool is a lot smaller than the numbers bandied about in Congress, but it's certainly an ethical dilemma. Perhaps some tax credit scheme might be able to effectively handle this, but I'm not sure. Expansion of existing programs (e.g. Medicaid, S-Chip, Cobra, etc.) might cover most of them, but at significant cost.

I think we've mitigated but not eliminated most of the problems, but that's the best you can expect for most government programs. Cost growth is the real issue here, and I think it can be seriously tackled with some far-reaching reforms and a rethinking of the system, not with some magic universal care formula that has not been convincingly shown to reduce costs.

[GGT]

MONEY. Nice post wiggin, but it's about MONEY.

It's not "lazy thinking" to admit it's the oldest and sickest that cost the most MONEY. Whether it's people or highways. And that the burden is going to fall to the young. To figure out how to pay for it all.

In the niche of health insurance, doing away with pre-existing conditions for rescission is a nice start, but it says nothing about what the insurer can actully charge. The current bill only helps children, when most pre-existing conditions affect the middle aged or elderly.

I already addressed that 80% of care cost is sucked up in the last few months (or two years) of life. Circle back to whatever definition of Death Panel you prefer. Costs are growing because (a) new tech is expensive and (b) everyone wants it.

Yes, let's rethink the whole system. Lets start with campaign finance reform, then move to insurance reform, then employer-subsidized insurance. The longer this goes on, the more other industrialized nations with single payer care, and different tax "schemes" make more sense.

We're trying to fix broken systems (from health to education to infrastructure) using a borked system of elections and legislations.


ps to wiggin, ask a senior citizen what their medications cost. Last I heard (read) the average is over $500/month per person. OOP, even after that crazy part D Rx donut hole.

[wiggin]

MONEY. Nice post wiggin, but it's about MONEY.

It's not "lazy thinking" to admit it's the oldest and sickest that cost the most MONEY. Whether it's people or highways. And that the burden is going to fall to the young. To figure out how to pay for it all.

But it's lazy thinking to jump from someone saying 'we don't have enough money for current programs' to 'OMG you're going to kill old people! Shame on you!'

In the niche of health insurance, doing away with pre-existing conditions for rescission is a nice start, but it says nothing about what the insurer can actully charge. The current bill only helps children, when most pre-existing conditions affect the middle aged or elderly.

Better competition and lower administrative costs - coupled with lower base costs from the physician side - can lower prices charged. If insurance companies have to compete, they can't over charge too much.

I already addressed that 80% of care cost is sucked up in the last few months (or two years) of life. Circle back to whatever definition of Death Panel you prefer. Costs are growing because (a) new tech is expensive and (b) everyone wants it.

I'm addressing (b), not some legislated 'death panel'. If we can change the culture and the value we place on heroic lifesaving measures over quality of life, the change will happen by itself. I abhor the notion of a forced solution to this. At most, I would argue that government plans might be able to exclude insurance coverage on certain unnecessary procedures, but even that gets a little dicey on who decides what.

ps to wiggin, ask a senior citizen what their medications cost. Last I heard (read) the average is over $500/month per person. OOP, even after that crazy part D Rx donut hole.

Okay? So what? I fully expect to have a large chunk of my retirement savings spent on medical costs. Housing costs will be lower, transportation costs lower, and when I get older my leisure costs will be lower (no traveling to Thailand when I'm 95). Where is the money going to go? Keeping me in decent shape. $6k is not a lot of money. Look, I'm not wholly in favor of eliminating prescription drug coverage from Medicare. But some sort of fix is necessary if we want to continue funding it. I'm not a big fan, but I did mention the possibility of allowing price negotiations with drug companies...

[GGT]

Chakkakhan and I were only very broadly speaking of "values"....surely you see that. Dread was the one who started the "We can't afford this" stance.

$500/month X ~ 80 million seniors = lotsamoney I mean, from a micro view, living to be 95 is going to be very expensive. More expensive for you than your grandkids, or is it the other way around?

Better competition and lower administrative costs - coupled with lower base costs from the physician side - can lower prices charged. If insurance companies have to compete, they can't over charge too much.

My position is first, where the hell are the physicians in all this "planning"? Second, that insurance is a scheme to mask true costs, separate patient from their own care, and eventually from their physician. We should cut out the middle men. All those millions and billions of dollars support an industry, but not the right one.

[EyeKhan]

Yeah, but that 'culling the herd' thing is its own digression. To get back to the point: medical care is expensive and a limited resource. In one way or another, people are going to either pay for it or ration it in some way - there are no free lunches. Arguing that the current system is unsustainable does not immediately lead one to the conclusion that we're going to euthanize our old people.

I don't have time to read your entire post but I wanted to comment on this one. The line of thinking came from Dread's flat conclusion that we don't have the money for universal health care, see Medicare as an example. So my question was, given that that is true, then what next? Then GG and I started our cynicism rant.... But the question remains: if the conclusion is that not only is universal health care fiscally impossible but so is Medicare, then what do you envision for the US?

[GGT]

Lots of babies, and elderly parents eventually in their kids' homes?

Maybe there's a method to the madness of the Catholic Church after all.

[Hazir]

Lots of babies helps. But otherwise I think that the conclusion that the US can't afford health care for all its citizens is a bit odd; how come a bunch of other rich countries can afford it, but the richest of them all can't ?

[EyeKhan]

Lots of babies helps. But otherwise I think that the conclusion that the US can't afford health care for all its citizens is a bit odd; how come a bunch of other rich countries can afford it, but the richest of them all can't ?

The implication is that the health care systems in all those other countries are bankrupting them. And plus, since our health care is the best in the world, it has to cost more, which is why we can't go socialist and take away all the rich people's money. We're free, didn't ya know?

[wiggin]

Lots of babies helps. But otherwise I think that the conclusion that the US can't afford health care for all its citizens is a bit odd; how come a bunch of other rich countries can afford it, but the richest of them all can't ?

Dread and I discussed this on the previous page. I would argue that the other rich countries cannot in fact afford it. That's not to say that the US healthcare system doesn't have some serious problems that make it cost more than other systems, but even stripping those out, it's not a system that could be supported by the government indefinitely. Even more than just deficit numbers, you also have to look at growth numbers being depressed as a result of high gov't participation in the economy.

[GGT]

Everyone is broke and deficit spending. See my last link where entitlements are figured as % of GDP.

So far the only nation I've read about tackling its deficit with some success is Canada, and they have universal care. Granted, only 30 million people, but still....

[ar81]

Dread and I discussed this on the previous page. I would argue that the other rich countries cannot in fact afford it. That's not to say that the US healthcare system doesn't have some serious problems that make it cost more than other systems, but even stripping those out, it's not a system that could be supported by the government indefinitely. Even more than just deficit numbers, you also have to look at growth numbers being depressed as a result of high gov't participation in the economy.

If you have a few sick people, it is cheaper to treat them than to treat lots of sick people.

If you prevent people from getting sick by educating them in the community you have less sick people, if you treat simple problems with cheap resources, and leave the most expensive hospitals and specialists for truly expensive and complex health problems, for sure you have a cheaper system.

US does not work that way. It has lots of overhead and expensive resources spent in simple problems in very inefficient manners.

It also adds the overhead of insurance company personnel added to the hospital administrative expenses, causing a double administrative overhead.
In public systems there is only one adminstrative structure that handles everything.

In insurance companies you have expensive CEOs and bonuses for administrative people. In government systems you do not have that, so it is cheaper. In some systems like NHS in UK a doctor could get a bonus if a patint stops smoking, but that's a bonus on real results that improve people's health, not financial results based on excluding people from a system.

[Dreadnaught]

Without bothering to read anything to further this argument, I think the next question for you POV is this: What are you suggesting as the alternative? Abandon any attempt at a sensible health care system, dismantle Medicare, and let people fend for themselves? Those who can pay for health care get health care. Everyone else gets abandonded to whatever disease kills or maims them?

Medicare itself should be reformed, and I think it's on the balance a good program if we can afford it.

The issue is trying to insure everyone in really moronic ways that simply expand our debt. There are better ways to make healthcare cheaper for younger folks, while still leaving room to contribute to subsidized "old age" care.

The problem is that Medicare has become an entitlement so large no one is willing to touch it. Medicare was created right at the end of an era when the US was completing a generation of unprecedented economic growth and dominance of the global economy. We never really could afford it. We can't afford what's being proposed, as it's being written and rammed through by people who don't recognize the funding problems behind Medicare. We should ll be mature enough to recognize that.

Instead, large parts of the world laughs at us and watches us falling over ourselves over simple things like not spending multiples more than we earn.

[Hazir]

Dread and I discussed this on the previous page. I would argue that the other rich countries cannot in fact afford it. That's not to say that the US healthcare system doesn't have some serious problems that make it cost more than other systems, but even stripping those out, it's not a system that could be supported by the government indefinitely. Even more than just deficit numbers, you also have to look at growth numbers being depressed as a result of high gov't participation in the economy.

Actually, insurance, and with that I mean any type of insurance, is something that the markets shouldn't really have a role in. The burden for good health care is very high on any society, which also means that as a society we can't afford to loose any of the money put in being taken out in the form of profit. If the government can't 'afford' it then the market certainly can't make it more affordable.

[wiggin]

Uhm, you're assuming that the incentive to profit and resulting competition doesn't result in any reduction in overhead. Government bureaucracies have no reason to be efficient in their use of funds or administration thereof; in fact, bureaucracies left on their own will grow to consume all of the resources available to them.

[EyeKhan]

Medicare itself should be reformed, and I think it's on the balance a good program if we can afford it.

This doesn't make any sense. Test #1. If it is not sustainable, it is not a good program.

The issue is trying to insure everyone in really moronic ways that simply expand our debt. There are better ways to make healthcare cheaper for younger folks, while still leaving room to contribute to subsidized "old age" care.

This doesn't make any sense either. Mornonic ways? Which ones are moronic? What are the better ways to insure everyone for less again? How do you know about all these ways but nobody in the government does?

The problem is that Medicare has become an entitlement so large no one is willing to touch it.

Damn Dread, are you tired? It is so big, no one will touch it. It's the size that counts and not the fact that millions of voting elderly depend upon it for their very lives?

We never really could afford it. We can't afford what's being proposed, as it's being written and rammed through by people who don't recognize the funding problems behind Medicare. We should ll be mature enough to recognize that.

If it can't pass Test #1, then what are you suggesting be done? Should Medicare be dismantled? Should we default to pay to play? And I think they know all about the Medicare funding problems, certainly better than you or I. And I don't think its a maturity problem either. Likely the strategy is once its in place, nobody will dare kill it, and the government will be forced to fund it somehow. Its like "Starve the Beast" but in reverse. We all know how well Starve the Beast worked, however. The beast just started eating the next generation's food....

Instead, large parts of the world laughs at us and watches us falling over ourselves over simple things like not spending multiples more than we earn.

No, they laugh at us because we're the richest nation in the world and yet bumble around unable to provide the most basic service for all our citizens - reliable, affordable health care. That's the embarrassment.

[Dreadnaught]

You're just being argumentative on things that you agree with -- of course governments make "moral" choices, as well as large social choices. Medicare is a moral program, as well as an economic program to ensure people don't A) Die quickly after retirement or B) Hoard all their money away for medical expenses, instead of spending it.

And please stop pretending that there haven't been extensive proposals and research about better ways to structure changes to our health care system. They have been ignored or ideologically dismissed and now we have a bill that is being pushed into law in an arguably unconstitutional way.

But more importantly, we just can't afford it. If we can't find ways to afford these things, then eventually we just have to end them. That's just rational. And that time is soon, as we can't seem to get a handle on them.

[GGT]

Uhm, you're assuming that the incentive to profit and resulting competition doesn't result in any reduction in overhead. Government bureaucracies have no reason to be efficient in their use of funds or administration thereof; in fact, bureaucracies left on their own will grow to consume all of the resources available to them.

Private bureaucracies (in the form of huge for-profit insurance companies) are already gobbling up our resources. Why shouldn't they--their goal is to take our money for providing us their administration "service". Usually people here dislike unions pushing companies around, or forced worker participation in unions....but when it comes to insurance everyone's blinded by the similarities. They wield their price bargaining clout around to providers, collude with congress for more control, have near total market monopoly, and anyone not participating in their scheme gets shat on. Mostly the consumer but also the doctors and hospitals.

Has everyone just forgotten the common complaint, "Insurance companies are telling us how to practice medicine"? tsk

They may be efficient in running their company, or lobbying legislators, but that doesn't mean their service makes our health system more efficient. They use the complexity of our system as a selling point to employers--it's all too complicated, let us do the hard work, we'll negotiate and set prices for you, create networks, weed out fraud and abuse, make it more affordable. Corporate America eats it up.

It's almost offensive that their ad campaigns suggest they're partners in our healthcare, they're on our side, even part of our family. Wake up people! All the billions of dollars funneled to these middle managers could have been used to actually provide care.

[Aimless]

<show me the money>

If wasteful spending constitutes 1 trillion dollars of the US annual healthcare expenditure, and you manage to cut 90% of that waste, how many more people can you cover?

[EyeKhan]

You're just being argumentative on things that you agree with -- of course governments make "moral" choices, as well as large social choices. Medicare is a moral program, as well as an economic program to ensure people don't A) Die quickly after retirement or B) Hoard all their money away for medical expenses, instead of spending it.

I don't understand what you are trying to say in this paragraph.

And please stop pretending that there haven't been extensive proposals and research about better ways to structure changes to our health care system. They have been ignored or ideologically dismissed and now we have a bill that is being pushed into law in an arguably unconstitutional way.

I'm not prtending. Please explain one of these ways to cover everyone and replace Medicare for less cost. I'm assuming the solution means more choices for consumers and profitablity for insurance and care providers too? I'm really interested in how that can be accomplished.

But more importantly, we just can't afford it. If we can't find ways to afford these things, then eventually we just have to end them. That's just rational. And that time is soon, as we can't seem to get a handle on them.

So you are seriously advocating the US to end Medicare (and Medicaid, I assume) and abandon any attempt to make health care universal? Your conclusion, even in the face of the fact that every other industrial nation in the world is able to do it without destroying their economy, your conclusion is this is nevertheless impossible for the US to do? Wow.

[GGT]

You're just being argumentative on things that you agree with -- of course governments make "moral" choices, as well as large social choices. Medicare is a moral program, as well as an economic program to ensure people don't A) Die quickly after retirement or B) Hoard all their money away for medical expenses, instead of spending it.

Right, the REAL reason we care about elder health is because they spend a boat load of money to stimulate our economy, but not if they're dead?

....They have been ignored or ideologically dismissed and now we have a bill that is being pushed into law in an arguably unconstitutional way.

Unconstitutional? How so?

But more importantly, we just can't afford it. If we can't find ways to afford these things, then eventually we just have to end them. That's just rational. And that time is soon, as we can't seem to get a handle on them.

We can't afford the beast in its current form. We also can't 'afford' to do nothing, or just throw up our hands in defeat. God forbid we use templates from other countries or adopt some of their successful ways. No, we want to re-invent the wheel and start over, because Americans love to be the innovators and pioneers.

[EyeKhan]

We can't afford the beast in its current form. We also can't 'afford' to do nothing, or just throw up our hands in defeat. God forbid we use templates from other countries or adopt some of their successful ways. No, we want to re-invent the wheel and start over, because Americans love to be the innovators and pioneers.

No, the Americans Dread is describing are defeated morons who can't do what all the poorer countries in the world have done. We will solve health care the old fashioned capitalist Market way - if you can't pay for it on your own, you can't have it. Note this will also solve the social security problem since seniors generally won't be living as long.

[Aimless]

The great cost of medicare certainly has a lot to do with the number of patients it covers as well as with the type of patients it covers, but much of the cost can be attributed to waste.