Transcript Document

BACKGROUND TO HEALTH CARE
SOLUTIONS
• Remember that health care is not like any other
consumer good or service.
• When you shop for a car, what should you do?
• You become an informed shopper!
• But becoming an informed shopper takes a lot of
time, energy and patience.
• When do you normally purchase major medical
services?
• In an emergency!
• And what happens to smart shopping then?
SOLUTIONS TO THE HEALTH
CARE CRISES
A.
B.
C.
D.
E.
F.
G.
Denial
Deregulation/competition
Tinker with Medicare/Medicaid
Medical savings accounts
HMO’S
Managed care
Canadian system
DEREGULATION/COMPETITION
Deregulation lower cost 
Competition  lower prices.
• There are numerous regulations for all sectors of
the medical industry.
• These regulations are expensive to comply with.
• Deregulation is a plan to eliminate or reduce these
regulations.
• By reducing or eliminating these regulations, costs
would go down.
• Those medical companies (hospitals, etc.) That
lowered their prices would be rewarded by more
customers.
• Those medical companies that didn’t lower their
prices would be forced to lower prices, or fail.
DEREGULATION - PRO
• This is the perfect competition model
• With competition, everyone is a winner,
because competition forces producers to lower
costs and prices.
TINKER WITH MEDICAID AND
MEDICARE
• Medicare = medical care for the elderly.
• Medicaid = medical care for the destitute (the
poor) and the disabled.
MEDICARE/MEDICAID
• Both are federal government programs.
• Both are paid for with federal income and
business taxes.
• Both have skyrocketed in cost in the last 20
years.
• There have been a whole series of proposals to
deal with MEDICARE and MEDICAID.
• Some proposals have been sensible and have
resulted in cost savings without reduction in
quality.
• Some proposals have been mean spirited, and
have eliminated medical care to people who
otherwise qualified for it.
WHAT HAPPENS IF WE WERE TO
ABOLISH MEDICAID
1. If MEDICAID is abolished, who will pay
the medical bills for the disabled and the
poor?
2. The individuals and then their families.
3. But they only get MEDICAID if they are
very poor or have severe disabilities.
4. So they won’t be able to pay for their
medical bills.
5. Sometimes hospitals write off these bills.
But they can’t afford to write them all off.
6. So what happens to the bills that the
hospitals don’t write off?
7. They are tacked onto other customers
bills!
8. So cutting back or abolishing MEDICAID
doesn’t reduce national medical bills, it
reshuffles them.
MEDICAL SAVINGS ACCOUNTS
• Basically combines a health insurance policy
combined with a tax-advantaged savings
account
MEDICAL SAVINGS ACCOUNTS
A.
Savings account
1.Individuals can place up to $2500 per person,
per year, in a medical savings account.
•
This savings account can be in any type
of investment vehicle.
•
The owner of the account keeps whatever
interest, dividends or growth in value this
account generates.
3. Since it is pre –tax dollars, this will lowers
someone’s taxable income.
4. This in turn lowers a person’s taxes.
5. Any of this money spent on health care is
not taxed.
6. If it is withdrawn before retirement, or
used for anything other than health care, it
becomes taxable.
7. What is not used can be withdrawn after
retirement and spent.
B
INSURANCE POLICY
1. You have RO purchase an insurance policy
with this, at $100 a month.
2. The insurance policy doesn’t help until you
have spent $2000 of your own money. ($2000
deductible)
3. It can then be applied for major catastrophes.
MSA - PRO
A. Increase national savings
B. Increase individual savings
C. Increase competition and reduce costs
nationally
A. More people will save
1. This allows people to save, which increases
family and then national savings.
C. This will generate competition, which will
force down cost nationwide.
1. Consumer smart shopping forces suppliers to
respond to consumers by lowering prices.
MEDICAL SAVINGS ACCOUNTS
ARGUMENTS AGAINST
A. How can people save?
1. People already have trouble trying to save,
because wages have fallen. How then can
they increase their savings?
B. Who can afford to save?
1. Look at the costs of ordinary medical expenses. To
be able to pay them, you need to save a minimum
of $500 a year if you are single and healthy.
2. If you have children, plan on $1000 per child,
minimum. And that if you have absolutely nothing
unusual happening to them.
C. Higher deductibles lead to later
problems that a more expensive.
1. Due to the high deductibles, people will forego
preventative care and routine checkups.
2. This means that early detection, which leads to
early repair, will decrease.
•
Instead people will postpone doctor visits
until the pain becomes too great.
•
And then the problem becomes expensive.
D. Age-health care equation
1. Medical bills for most elderly are too high for
most families to realistically save for.
2. What to do we do then?
E. What about those without insurance
now?
1. This does nothing for those without health
insurance whose numbers continue to
increase.
2. How does this help those with in adequate
insurance today?
HMO’S: HEALTH MAINTENANCE
ORGANIZATIONS
• Have a large number of structures.
• Basically, networks of health service
providers: hospitals, clinics and doctors are
all linked up.
HMO’S:
AGRUMENTS IN FAVOR
A Individual Cost Savings
1. Members save money compared to being on their
own.
B. Quality Service
1. Most HMO’S have a large network of health
providers, and can provide a variety of specialists to
choose from, for each type of illness.
C. National Cost Savings
1. Nationally, if people are moved to HMO’S, the
country as a whole can save money, through
economies of scale.
HMO’S:
ARGUMENTS AGAINST
A. Not much left in cost savings
1. Most of the cost savings from transferring people
to HMO’S has already taken place.
B. HMS’S compete for the healthy and the
wealthy
1. They actively compete for the healthy and wealthy
in the suburbs.
2. They don’t compete for rural patients, city patients
or the elderly.
C. They are linked to your job
1. Lose your job, you lose your access to an
HMO.
2. Many jobs don’t offer access to HMOS’,
especially small and medium sized
companies.
MANAGED CARE
•
A phrase for any action by any part of the
medical industries to control costs.
Examples include:
1. Reducing hospital stays as much as possible.
2. Lowering wages.
3. Bypassing unions.
4. Reducing physicians fees.
5. Forcing physicians to reduce
required/recommended SURGIES.
6. Financial incentives for physicians to take
on more patients.
MANAGED CARE ARUGMENTS
FOR
A. Given all of the padded expenses in our
system, there is plenty of room to cut costs
without reducing quality or quantity of
care.
Examples include:
1. The pharmaceutical industry is one of the most
profitable in the country, so there is room to cut
some of its revenues.
2. For profit hospitals are very profitable, so there
is room to cut some of their income as well.
B. It works!
1. In the 1980’s health care costs rose 11%
annually.
2. In the 1990’s once managed care was put into
place, costs have risen less than 4% annually.
3. This is a drastic fall in the cost increases.
MANAGED CARE
ARGUMENTS AGAINST
A. It is doing nothing for those without
health insurance.
1. Through out the 1990’s even as managed care
expanded, the numbers of people without health
insurance continued to grow.
B. It will do little or nothing for those without
adequate health insurance.
1. It appears that the number of people with inadequate
insurance is also rising.
C. So far, many of these cuts have turned out to
affect patients, rather than insurance or
pharmaceutical companies or hospitals.
1. Examples include drive-by pregnancies
and refusing patients emergency care.
2. Any savings appear to be going to the
owners of medical companies, rather than
reduced costs to patients.
THE CANADIAN SYSTEM:
HOW IT WORKS
A. All Canadian citizens are covered.
B. Single payer- the Canadian federal
government.
C. Revenues for health come from progressive
income taxes, progressive corporate taxes,
and high taxes on alcohol, tobacco products
and firearms.
D. Doctors are not government employees.
E. Hospitals are not state owned.
F. Physicians are free to choose their patients.
G. Consumers are free to choose their doctors.
H. Fees are fixed for each service and
negotiated between physicians and the
government.
I. Nearly all types of medical problems
are covered.
THE CANADIAN SYSTEM:
ARGUMENTS FOR
A. Universality
1. All Canadians have medical coverage,
regardless of income
2. Legal immigrants and students are also
covered.
B. It is cheaper.
1. Canadians spend only 8% of their GDP on
health care while the us spends 14%
2. One congressional study indicates that adoption
of the Canadian system would save the average
us family $1000 per year.
C. Improved health.
1. More money would be spent on preventative
care, which would save money in the medium
and long term.
2. It would also improve health in the short term.
D. Consumer freedom.
–
Consumers are free to chose their doctor.
E. Physician freedom.
THE CANADIAN SYSTEM:
ARGUMENTS AGAINST
A. Dramatic increase in federal government
spending and taxation.
1. One study indicates that federal government
spending might increase as much as $500 billion.
2. This would mean dramatic tax hikes as well.
B. Increased waiting time and possible
rationing of health care.
1. Canadians have longer waiting times for non
emergency surgeries and procedures
C. Possible slow down in all types of
medical research.
D. Virtual destruction of the health
insurance industry.
E. Large number of jobs lost.
THE END