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Guest Post: That Which is Unsustainable Will Go Away: Medicare
Submitted by Charles Hugh Smith from Of Two Minds
That Which is Unsustainable Will Go Away: Medicare
Medicare is an example of an unsustainable system that will go away in the decade ahead.
Here are the sobering facts about the number of workers and those drawing Social Security, Medicare and Medicaid entitlements in the U.S. While the government claims to have a "trust fund" to pay for Social Security and Medicare, this is illusory propaganda. There are no funds set aside to pay these entitlements--they are "pay as you go" programs funded by current tax revenues. If the tax revenues don't cover the programs' expenses, the Treasury sells bonds, i.e. issues debt to pay the entitlements.
Social Security (SSA) has 61 million beneficiaries as of March 2012.
Medicare has 49 million beneficiaries as of November 2011.
Medicaid has over 50 million beneficiaries; another source puts the current number at 58 million.
Kaiser Family Foundation says roughly 7 million "dual-eligibles" who receive both Medicaid and Medicare, so let's use the data point of 50 million Medicaid-only recipients.
We can assume that most people drawing Medicare benefits also draw Social Security, while the 8+ million drawing disability from Social Security are also covered by Medicaid.
However you slice it, there are roughly 60 million people drawing Social Security and Medicare/Medicaid and another 50 million Medicaid recipients for a total of 110 million people drawing significant entitlements.
As I have noted here many times, there are only 115 million full-time jobs in the U.S.
That means the ratio of workers to recipients of significant "pay as you go" entitlements is roughly 1-to-1: 115 million full-time workers and 110 million people drawing Social Security and Medicare/Medicaid.
These programs consume the majority of the Federal budget. The Federal government spends around $3.7 trillion and collects around $2.6 trillion in taxes, so the basic deficit is $1.1 trillion. Off-balance sheet "supplemental appropriations" mean the real deficit is actually considerably higher.
Social Security costs $817 billion, Medicare and Medicaid costs total about $800 billion annually, and program outlays rise every year. The Pentagon/National Security budget is around $690 billion.
As I detailed in The Fraud at the Heart of Social Security (January 17, 2011), the program paid out $707 billion in 2010 and collected $631 billion in taxes, a $76 billion shortfall for 2010. The current program (2012) cost is $817 billion, a leap of $100 billion in a few short years as Baby Boomers flood into the program.
Of the roughly 150 million workers in the U.S., 38 million earn less than $10,000 per year, 50 million earn less that $15,000 a year and 61 million earn less than $20,000 annually. All these numbers are drawn directly from Social Security Administration payroll data.
100 million wage earners, or 2/3 the entire workforce, earn less than $40,000 per year.
Median pay in the U.S. is about $26,360 annually, while the average pay is about $40,000. Since the average American household takes in $63,091 per year, it seems the typical wage is roughly $30,000 a year.
The Medicare tax is 2.9% of wages, 1.45% each for employer and employee. If the typical worker makes $30,000 a year for 35 years, then lifetime earnings are about $1 million. If we take the $40,000/year average, then that rises to around $1.4 million in lifetime earnings. The 2.9% Medicare tax thus totals about $30,000 to $40,000 in lifetime contributions for the average worker.
The average benefits extracted from the system run from $393,000 to $525,000 (due to the benefits extended to non-working spouses, benefits for never-married people may be somewhat lower). Average annual costs per beneficiary run as high as $18,000, though expenses typically rise significantly in the last year of life.
As I have reported here earlier, a friend's father was in the hospital a few years ago for less than a week for "observation" and a non-invasive gall-stone procedure. Medicare was billed $120,000, or roughly the lifetime contributions of three workers for this modest procedure and a few days in a hospital. My Mom had an office procedure performed on one of her toes and Medicare was billed $12,000. An office procedure (not in surgery) that took a few minutes absorbed 1/3 of my entire lifetime contributions to Medicare.
What we have is a system where the full-time worker to beneficiary is already 1-to-1 and the system pays out 10 times more per person than it collects in taxes. The Medicare system would need about 10 workers for every beneficiary to be sustainable. Right now the ratio is just above 2-to-1. That simply is not sustainable.
Tweaking the payouts doesn't change the basic math: "pay as you go" entitlements are not sustainable when the number of recipients equals the number of full-time workers. Programs that pay out $400,000 per person (many of whom did not work a lifetime) and collect $40,000 per lifetime of full-time work are not sustainable.
Wishing the math were different does not make it different.
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I know, I know. You've got the best plan for how people should be forced to live, and you're more than ready to try to get someone to enforce your rules.
Fuck you and your totalitarian buddies too. Freedom never meant shit to any of you guys.
If it comes down to it, maybe we'll get to die together.
Absolutely incorrect. Malpractice costs are just 2% of U.S. healthcare spending. Number of state have already implemented tort reform as the GOP is pushing for to make it federal and the law of the land. They are just out to crush the trial lawyers lobby though which is a huge campaign contributor for the Democrats that gives little/nothing to the GOP.
Tort reform as advocated by the GOP would have some initial savings but it still nothing to correct the problem of medical errors (which is a huge problem) and leaves victims who are legimiately injured high and dry for future medical costs. Kind of a red herring topic among healthcare economist who acknowledge that tort reform in healthcare would fundamentally cuts costs one way or another.
Better solution should be medical courts that specifically deal with these issues staffed by medical professionals so that doctors really do get a trial by jury of their peers.
Ignoring the fact that insurance premiums are up over 12% already this year won't make it go away. Is this the same "tort reform" that has been blocked by the insurance company-backed GOP candidates? If only the GOP's actions matched their words, but then this is that same for any politician. perhaps having politicians that actually represent your interest might be a good idea after all huh? Wake the fuck up.
Insurance premiums are not averaging 12% nationally in any survey or reported quarterly earnings call from health insurers. It may be for your particular business or area but that is not a national one.
Tort-reform hasn't been blocked at all by insurance companies. They would love to see it in effect if it would help to keep medical cost inflation down even by a bit. Anything that helps the medical underwriting cycle is advantgeous for them.
I am looking directly at the cost for my company and employees. Surveys are bullshit, especially government sponsored ones. Again, wake the fuck up and go look at some independent YoY surveys done by the likes of the Pew foundation. Troll harder.
So your single company is representative of all private and public employers in the US and all other market surveys are complete bullshit regardless of whether they are private or public?
Your an idiot.
Same for every other company owner I have spoken with, same for the two local universities, shall I go on? But perhaps I should resort to insults to strengthen my arguement like yourself. Look around, and good luck with that cognative dissonance. (FYI - that should be "You are and idiot." or "You're an idiot", not "Your an idiot")
Yeah I do take the earnings calls from health insurers and the quarterly polls I track for benefit consulting firms as more accurate and representative nationally of what is occcuring with healthcare premium cost than your antedotal experience.
Saying you don't trust a single market survey regardless of its source is ridiculous. How do you intake any kind of information then? Just based soley on your antedotal/personal first-hand experiences?
Costs might actually be higher than 12% too for certain segments of the market especially the small employer segment looking at traditional PPO plans offerings by insurers. Might even be +20% depending upon their recent actuarial history, their industry, their region of the country, etc.
Generally the surveys I have seen show about a 5-6% national rate on employer premiums this year. It is still a huge problem since it is greatly outpacing general CPI but nowhere near 12% nationally.
You have confirmed what I suspected, I am simply in one of those "lucky" segments of the economy. Still think 5-6% is sustainable with no real wage growth, ZIRP, and real inflation running somewhere near 4-5%, I think not. I wonder how many people this is pushing out of insurance programs every month as they divert those funds to food, fuel, and rent?
No it isn't but no coutnry on Earth has figured out a surefire way to deal with healthcare inflation because is a good/service that seemingly has no end to its level of demand.
We need to ration at some point. Just a hard question of who does that - individual or gov't - and what level of risk we placed upon them.
Nature will do the rationing either way. Go be productive.
According to the Kaiser Family Foundation the average premium rose 9% this year. That's Kaiser, who if anything low balls the number because they are Obama donors. I've seen studies showing a higher increase.
That's disingenuous of you. The 2% are just the jury awards costs, which is STILL FUCKING HUGE when you consider that the compensation of all American physicians (1 million of them) account for just 10% of US health care spending. You have to also include all the indirect costs such as defensive medicine because of the trial lawyers. John Edwards made hundreds of millions and single handely changed how we deliver babies in America by saying that cerebral palsy was due to physician negligence (they should have done C sections instead). Guess what, nowadays if you have ANY complications in your labor or delivery, we're going to do a C section. Recent science has also shown that cerebral palsy is more likely due to genetic or epigenetic causes and rarely due to OBGYN's fault. Oops.
Defensive medicine is so pervasive that it is embedded in the standard of care. It is expensive and doesnt help patients. We spend fifty percent more than the next highest spender and have some of the lowest health demographics of dveloped countries
The things u cant sue for doctors dont address. Too busy trying tp practice cya medicine. So lots of important stuff a doctor could do like counseling and educating doesnt get done while we bury pur head in the paperwork dotting our I's and crossing our T's
Wrong. It also includes tort premiums charged to providers. Costs of defensive medicine due to the threat of being sued vary considerably (really hard to estimate this even if you survey physicians on what they would do) but 10% of US health care spending is at the exteme end.
The medical malpractice system in this country sucks because it gives too much money to lawyers and does little to help victims who actually are hurt/injured. Not saying that it really doesn't need reform. Not necessiarly even against hard caps. I am against a hard cap of just $250k for medical injuries with no award for 'pain and suffering.'
Medicare and medicaid patients have a level of servants only kings had in the past. They have someone to bathe them, wipe them, exercise them, put salve on their sores. And if they cant walk or use a power wheelchair they have someone to push them. The home care and nursing home models of service will disappear. People in the future will scratch their heads in amazement at such indulgence
It used to be family members that did that. But I guess the family is now your government.
Also if you are in the nursing home and cant feed yourself or dont know how to use a spoon due to severe dementia then someone will feed you. If you have a pneumonia or any significant medical problem then you will go back and forth from the hospital to nursing home no matter how severe your alzheimers. Most community hospitals couldnt survive financially without these bedridden senile medicare/medicaid patients being wheeled back and forth from nursing home to hospital and back again
That was before family lived off beans and foodstamps and had 10 million credit cards making them forever-debt-slaves to their ignorance - especially with student loans.
Government didn't replace your family, it cut them off at the knees, children and parents alike.
People of the future? You mean that future where we look more like a third world country with peasants and serfs?
Personally, I would like to see more hospice care replacing ICU for end of life care. Much more humane and affordable. But yeah, your vision with the 1% looking down at the misery of the masses is probably more likely.
It's not indulgence, the past Kings merely kept everyone as slaves to do this against their will and killed them if they said No.
The biggest problem that no one ever talks about is Medicade. Many of those people never worked and have lived on the Largess of the Government from cradle to birth. Think about all of the Children that are born into Welfare and are cared for thru Welfare payments and Medicade for their entire Childhood to just become one of the Welfare Moms or a sperm doner that will be another Baby Farm. They never paid anything into the system.
I hate when they always pick on the people that paid into the system and not they ones that never did. Why is it taboo to talk about Medicade and Welfare for cuts?
They both should be cut but welfare is small and manageable. Medicaid is a problem but medicare dwarfs them all
110M unique individuals receiving SSI/Medicare/Medicaid? Think not. There is huge overlap between SSI and Medicare/Medicaid beneficary populations.
I get the author's point (healthcare inflation is what is going to sink this country long-term in the form of Medicare/Medicaid) but this is a really crummy article on the topic.
deleted.
Have to remember Medicare is not free. You pay a monthly fee now and you need supplemental insurance to pick up the difference.
It is still heavily subsidized by the taxpayer. You arent paying anywhere near the full cost with your premiums
Hey all,
Been reading you guys for YEARS, finally signed up and this is my first post. I am sure that most if not all would agree that markets (stocks)are manipulated yet would love more smoking guns. Here is an excellent article on naked short selling with PROOF of conduct. Semper fI.
http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515
See ya.
Conservatives and liberals all argue "It is an entitlement!! We earned it."
This is a lie. Yes, it is an entitlement, but contributing $35,000 for a plan that extracts $400,00 is not earning it.
please, allow me to correct the rhetoric:
"It is an entitlement!! We fraudulently stole it!" Say that five times and look at your grandkids who are born in debt because of you.
Folks are as entitled to ALL defined benefit plans as much as Madoff's clients were entitled to 14% returns in perpetuity. Fraud is fraud is fraud. It doesn't matter if it is Madoff or Congress, K st lawyers, and retarded voters. It is a lie.
All you old folks (I am in my 50's and have maxed out contributions to both ss and med) who bitch about what you are entitled to are deluded haters of your own children and grandchildren. That is the ugly truth. You didn't earn 1/5th of what you are trying to politely and legally steal. Be honest.
Here's the honesty you'll hear.
"But... but... they stole from me! So that makes it fair!"
The stealing was less back then and it was kept under control
If the old blue hairs will agree to steal no more than the same percentage from each individual youthful contributor that was stolen from the blue hairs when they were younger then it would be fair
This shortfall(cost-taxes) should be refunded to the government by the medical establishment, who are the real beneficiaries. The children, old and sick are just used to extract fees and force the government to run deficits. The same beneficiaries in the medical establishment then lend money to the government and extract interest. They are double-dipping at the taxpayers expanse--they themselves, pay no taxes.
In the case of health care, the "old folks" aren't the ones trying to "legally steal". That would be Big Pharma, corporate health care and Insurance. Yeah, even insurance gets a bite, through the Medicare Advantage.
who bitch about what you are entitled to are deluded haters of your own children and grandchildren. That is the ugly truth. You didn't earn 1/5th of what you are trying to politely and legally steal.
You have to correct for inflation.
What we have is a system where the full-time worker to beneficiary is already 1-to-1
That and 100 robots. Why do you want a system where only elites benefit from productivity gains--that is what is unsustainable.
LOL
False dichotomy much?
Lets also not forget that Medicare is the health care (insurance) companies welfare.......when you turn 65, Medicare automatically becomes your primary coverage @80%.........regardless if you are paying on a 600 per month policy that came with you after retirement.
Now you pay per month 100 bucks for Medicare for the first 80%, and 600 bucks for the remaining......@ the Medicare rates. This is a brilliant scheme if you are an insurance company......not so much if you are a tax payer.
It's a behind the scene bailout of the insurance industry that has been going on for decades...........what happens when it ends?
Here is a basic fact - the average elderly person in this country last year received over $30k in SSI/Medicare/Medicaid dollars. Not to say that since Medicare/Medicaid was placed, the rate of elderly poverty has plummeted. Elderly poverty level was 37% in '65 and it was down to under 15% in '10. In regards to reducing poverty among the elderly, it has been massively successful but as with anything there is no 'free lunch' and it comes with a huge fiscal cost.
At some point, someone is going to have to ration care. It is either going to be the federal gov't that sets a yearly budget or passed back on to the individual with a greatly increased OOP cost while they receive a some support from the federal gov't but are left up to their own to fund the rest. I think the later will happen in this country first because you will never see a 'single-payer' system in this country.
What is going to happen is that you are going to be a generational battle in this country starting in 2016 and really picking up in 2020. It will be Gen X/Y vs. their Boomer parents. You saw shades of it in this election already as Ron Paul's strong support was among young voters and at the college level. Elderly voters flocked to Gingrich and Santorum.
How is elderly poverty defined? Are parents living with their adult children with $0 income in poverty?
Income by yearly returns. It gets tricky to measure but it has radically reduced elderly poverty. You wouldn't see anyone argue likewise. Just come at a huge cost and one that is threatening to consume the federal budget alive by 2030 and be a huge issue even by 2020.
Health-care has been rationed forever. The idea that rationing would be something "different" is an error--it's not a question of WHETHER health-care is rationed, it's a question of HOW health-care is rationed.
Death panels currently exist. They're currently the legal committees that write coverage policies. If Obama-care takes over that role, it won't be any different--it'll be different committees, but the essential concept is the same.
In my view: the most sensible people to make members of the death panels are the patients and their doctors.
I'm thinking if you look at that poverty rate, you will see an upward trend that will continue as their savings are depleted with ZIRP. I hope you are wrong that we will never see a single-payer system, because that means the crony capitalists have managed to keep the serfs under their boots. The health care system doesn't need tweaking, it need complete redesign to become sustainable. If you are saying its hopeless to even consider sustainability while the duopoly and its special interests control where the money goes, you may be right as long as the sheeple remain asleep. The propaganda masters will certainly try to paint it as a generational conflict, as it takes the spotlight off the true villians, the corporate interests who put profits above sustainability.
Yes elderly poverty has increased since '08 as the general poverty rate (defined) has increased. Just not as much as the rate for children or other populations.
I understand your frustration with the Fed and with QE1/QE2.
Yes of course. Why should the national treasure be used to care for the elderly and disadvantaged when we could be using that money to bomb brown people all over the planet into the motherfucking stone age!!!!
Priorities Priorities.
By the way..is perpetual war sustainable? Or is that not relevant?
+1 That and guarantee that the billionaire's fortunes always grow to the sky no matter what they do.
Ron paul supporters do not advocate personal gain and socialized losses. A lot of those billiOnaires would be ex billionaires except for government subsidy special favors and bailouts
I never see a libertarian advocate high levels of military spending or messing with brown people but you keep building that strawman and make him really pretty before knocking him down
Hmmm. . . "brown people"? What the hell does that mean? You do realize that Afghans, Iraqis, Iranians, Syrians, and so forth are CAUCASION, as are many Hispanics, right? We used to hear about bombing the "yellow man" and killing the "red man"--then we realized it was not about the color of those we bombed, but their agenda vis-a-vis our interests that mattered. Seriously, do you really think that skin color matters to those who "bomb"? Maybe you had better ask a Dresden German about that one.
"Brown" is an adjective used to describe color.
Afghans, Iraqis, Iranians, Syrians are BROWN IN COLOR.
Unlike "white people," who are not "white" at all.
No, I'm not color-blind and just for fun I can use photoshop color-selector tools to compare.
Afghans, Iraqis and Yemeni people killed by US drones are definitely BROWN people.
Iranians and Syrians have NOT yet been bombed by the USA military this generation.
Demographics is destiny. "Be fruitful and multiply" isn't just a command. It's a good idea.
That's horrible advice and no society on Earth has increased its population as its GDP per capita has increased. One of India's biggest problems is that although they have really reduced birth rate it is still too high and places a terrible strain on their resources & economy.
Actually most have had increasing populations and increasing gdp
Look at population and per capita gdp in the 19 th century versus 20 th century
Or maybe you should go back to daily kos
Children per parent falls in every economy as GDP per capita increases. There isn't a society in the world that hasn't bucked this trend in the long-term.
Go to any source and look for yourself on global reproduction rates. They are highest in the countries (Sub-Sahara Africa) that has low GDP per capita.
53M since Roe v. Wade and counting. And funny thing is, we are paying to kill them.
What people choose to do with their own life is their own business. Controlling someone's reproduction system is one of the most profound ways in which a gov't can control its citizens. Imagine you advocate 'freedom' except in situations where you are fine with the gov't controlling one of the most important and inimitate parts of a person's life.
You fail to understand that the FUNDAMENTAL right is the right to life. Killing babies deprives those babies of their lives. Human nature dictates that women sometimes become pregnant following sexual intercourse. Accept that fact, as a woman, and accept your moral responsibility to the other human life you bear inside you. The timing of your freedom to act is not upon finding you are inconvenienced by a baby in your womb. The timing of your freedom to act is in choosing to have sexual intercourse. If government stands for anything good, it is that innocent life shall not be killed by those with greater strength. Abortion is the classic case of a person with greater strength killing a person with lesser strength.
Even many Libertarians nowadays recognise this truth. Liberty is protected AFTER life is protected. You have all the freedom in the world to have sex. But once you have a baby in your womb, your freedom is limited by nature. Your moral obligation is to care for that baby into this world.
Assuming that the abortion issue were purely a State issue (which, but for overreach by Leviathan, it would be), and a State banned abortion totally, even then it is not a case of the governtment "controlling one of the most important and intimate (correct spelling) parts of a person's life." It is merely protecting the life of a human being. The government is not telling the woman to have sex, not have sex, use birth control, or anything else. The woman CHOOSES what SHE does. Once she carries her child, the one thing, under an abortion ban, she cannot do, is deprive her child of the child's life.
Life is the single most fundamental right of all. A woman's liberty concerns sex. Not the taking of life.
A clump of cells is not a 'life' and while prenatal technology has greatly expanded the ability of a fetus to survive outside the womb the medical community doesn't argue that 'life' occurs right after conception.
If the right to life is a fundamental right. then I assume you are also against the death penalty and would make exceptions to an abortion ban where the life of the mother is threatened or the baby can not be brought to term.
How would you propose we determine the insurance premiums for kids pre-birth?
gotta love all you dudes who rage on about a zygote's RIGHT TO LIFE - but care zip about what that life looks like after it's forced to be.
admit it, it's all about control of women's bodies, and zero to do with "the babeeez" - if you cared about those that were born, you'd be working towards eliminating child poverty, etc. - and I'm absolutely sure the majority here don't.
of course, the Madonna model of motherhood - no mentioning of the fact that it takes sperm to make babies - just the obligation of care that falls on the mother. while I don't agree with the current methods of support, the facts are: culture tells young women that their main purpose is to appeal sexually to men, that's where they are to source their worth to society, in their "attractiveness" - and it tells young men that those young women are receptacles for their desires, no need to take full responsibility for the consequences of sexual desires.
and I'm waiting to read a decent argument from a Libertarian perspective about creating LAWS to regulate a human's sexuality /body.
when those who desire enforced pregnancies also start talking about the consequences to society of forcing women to carry and bear babies they don't feel they can truly care for - emotionally AND financially - and when they begin to factor personal responsibility for the sperm donor, in other words, when the whole picture is acknowledged and seeks solutions beyond control dreams,
I'll be listening. . .
"You fail to understand that the FUNDAMENTAL right is the right to life."
NO. You fail, fail badly.
You fail completely to understand that an unborn baby should have no rights because to elevate that set of organs-still-connected-to-the-mother above the mother herself is to command her to absolute poverty against her will.
The right to stop your own pregnancy is as fundamental as the right to your own breath. Anyone stopping it is a Hitler. A Eugenicist who sits calmly behind a desk deciding everyone else's yes/no decisions about having babies, what kind of babies, when, where, all to shape society in your own Final Solution.
No thanks, asshole.
If no woman could have an abortion then 99.9999% of all humans would live in abject poverty with 20 children and would be murdered endlessly because life would have no value. The power-elite today would be but mere children compared to the Mega-Emperors of such a world who could command that billions be killed and laugh over it at lunch time because human life would have no purpose but to be snuffed out for entertainment.
So thank you and shut the fuck up.
Take the $450+ Billion Interest* payment on the National Debt (2011) and use that to help fund SS.
* This is what we pay the owners of the Fed to use those FRNs that Bernanke prints in his spare time.
the Great Society ain't so Great
Here's my offer. Return to me every dime that you have taken from me for Social Security and Medicare over my lifetime. I don't even demand the interest due on this amount. Just the principal. Then leave me alone. Don't ask for any more. I will NEVER ask you for medical help, welfare, retirement. In fact, I will take a final journey into the mountains when my time to go is even vaguely clear.
Since no health insurer would give you a policy if you were old and had a preexisting condition, you would either go broke if you had a serious medical complication or just let yourself die/kill yourself. Those are you two options.
Do you comprehend English? I believe that is exactly what the commenter just wrote.
That's assuming the poster is able to get a diagnosis and still be able to 'travel the mountains.' Doesn't really matter either because it basically wouldn't nobody would choose that course of action.
Correct. And I would much prefer to go out in the wild than to languish in the local nursing home. Heaven forbid.
Which brings us to the reality in all of this. We are certainly all going to die. What is the point of carrying on a misery-filled, painful, bed-ridden existence at enormous expense to our children. Why not let us opt out, as I described, and let us choose (assuming we are physically able) to take a final act of swimming with sharks, wrestling a grizzly, jumping off of El Capitan?
You are assuming you will be given that choice. A number of elderly people are not due to what happens to them medically.
Frankly if I was diagnosed with a terminal illness I also would not treatment except to minimize pain and suffering. One of the things that I am a huge advocate of is that each person literally over 35 has a registered living will that given implicit instructions on how that person wants to be treated medically even if they are not capable of the time of making that known themselves.
Living wills are something that I would imagine both parties could find common ground on & wish that were more emphasized because way too few people have them now.
You do have the option of a romantic final act RIGHT NOW!
I suggest you take advantage of the opportunity before government outlaws such behavior.
(This is a reply to post 2432089 2432089 from Watauga.)
wait, he said DIME. Every dime.
Make them silver dimes & I think you're in business.
i think there is a huge difference between what medicare is "billed" and what actually gets paid. If a doc/hospital "bills" $120,000 for a procedure, that is no where close to what they actually get paid...it may even be as low as $10,000. I don't have the average for all bill to payment data, but I know in the lab testing area, the "bill" to actual payment is about 10%....yes, you read that corect,...the lab bills $100, but contract/agreements with insurers (govt and private) designate that they actually pay just $10.
not sure, but that doesn't seem to have been taken into account in the article.
1) The only suckers who pay the fully billed rate at hospitals are those without insurance, of whom some don't pay at all.
2) Only reason to upbill people is that medicare and medicaid barely pay a living wage, and none of us in medicine want to deal with the shit we have to deal with for free.
3) The day's coming very soon where the whole "death panel" concept will have no choice but to be repackaged and rechristened into something sellable to the masses. It's truly sad that the AMA (which is also totally fucking useless) hasn't gone into the fray on the topic with it's medical ethics people and TOLD the U.S. populace that getting your CABG done at age 90 isn't realistic. They're just trying to ride this fucker out until it's gone.
4) Eat better and stay healthy. You won't be able to have your kids bail out your healthcare tab forever. Oh, and when you get truly sick, think hospice. Everyone dies eventually. On a long enough timeline the survival rate for everyone drops to zero, or so I've heard.
The "Greater Depression" is sinking in deeper.
Glad I bought those 3000% Yld Greek Bonds instead of keeping my money in these "High Yield 0.06% Savings Accounts."
"If the typical worker makes $30,000 a year for 35 years"
No, he won't.
If you don't assume for hyperinflation (you should, but it's a different topic), but take an average 3% historical inflation his income will rise to $85,000 a year in 35 years. Neither today's nor yesterday's Hugh Smith article took this into account (or did I miss it?)
See what life is like in Greece today...coming here within a decade...
Medicare is very different then Medicaid.... Medicare was a promise, Medicaid is entirely different. Unfortunately Healthcare is NOT a right.......
Problem is readily solvable.....
1) One time doctor hospital cut in re-imbursements of 20%.
2) Tort Reform
3) All drugs covered under Medicare must be generics (sorry and sad fact, but its necessary)
4) $50 copay for all Medicaid visits (to keep) the emergency rooms clear of illegals and bums.
5) Means test Medicare, if you have private insurance, you do not qualify.
6) 2 percent increase in medicare tax. While your at it have SS tax go all the way up, and cap SS payments where they are....
7) End life time health coverage for Gubermint employees at all levels, except military.
That was easy.
Sure. Just increase taxes and reduce services.
It's always easy from that perspective.
Health care IS a right, imo. I consider it to be part of protecting the general welfare. Promoting the general welfare means looking at the needs of all people rather than the selected few (ie 1%). There are so many benefits to single payer, from allowing small businesses to be more competitive to allowing minimum wage slaves a chance to have a life.
Regarding your solutions, i would rather see salaried medicine and single payer, with an increase in providers (maybe with educational subsidies) to meet the needs of the population. This would eliminate reimbursement cuts, copays and means test. Get the insurance industry out of my health care. They are profit driven and not care driven and need to only be an option for those who think they need something above and beyond what is provided by single payer. Absolutely agree on the generics, also would like to see the least invasive treatments exhausted before moving on to high cost procedures. Standards of care need to be evaluated to make sure doctors are not doing unneccesary tests and procedures, based on best practices that can improve effectiveness and efficiency.
it isn't a right IMO. okay, so we disagree there. wait, actually you may be on to something there....I think new Ferrari's are a right. so gimme one. Better yet, whatever you do for a living, I think that is a right and I demand you provide it to me for a severly reduced price.
i don't consider it part of protecting the general welfare. it, and nothing like it, are anywhere in the massive collection of notes, writings, and debates of the founders. to acheive it, you would have to violate so many other CLEARLY DEFINED rights that are actually in our founding documents. so we disagree there also.
There are so many wrongs with single payer, from denying services to govt waste, fraud, and abuse to enslaving one group of people to serve another, and on and on. where are we going to find these angels among us that will operate with a higher than current level of care, efficiency, innovation and cost? it's a fantasy.
Reduce government interference in the insurance industry and remove the employer tax incetive to offer healthcare insurance and let consumers choose what they want and need and give them the tax break.
the profit motive is not perfect, but it's the most efficient method of allocating scarce resources that is known as of yet, especially for large, complex systems. it ain't perfect, it has some negatives, but the alternatives carry far worse negatives. the whole centrally planned directive thing has been tried and failed miserable for hundreds of years.
eff the one payer govt system. they can't do shyte right...social security: bankrupt, medicare: bankrupt, medicaid: bankrupt,....they've done such a crap job on massive programs that there's no friggin way i'm going to entrust them with making healthcare more effective.
I guess I disagree with your entire premise. nothing personal, just a disagreement.
By confusing basic human needs with luxuries you try to make a case for austerity in the US. At first you will get the more impressionable sheeple to agree with you because they have lost, or never developed, their critical thinking skills. Eventually reality will bite them in the ass and they will never have seen it coming. They won't realize that their general welfare is in danger until they, or those they love, are suffering.
The constitution-thumpers are subversive 1%-ers and their misguided minions, IMO. The constitution should support a sustainable economy, not an oligarchy.
Your criticisms of single payer are misguided. Of course we need to clean up the crony capitalism before we can create a sustainable health care system. So it starts with our owned legislature. And what group is being "enslaved" to serve another? Salaried health care workers have job security and they are not earning minimum wage at part time jobs. Pretty sweet gig if you can get it these days. The higher level of care, efficiency, innovation and cost will take some systems engineering to get a data base of outcomes/procedures to base care on. Welcome to the 21st century.
The profit motive, where special interests get to suck out resources meant to address vital needs, is corrupted by crony capitalism. You come across as a corporate shill or someone who has an agenda. My only agenda is a sustainable health care system. If you think the alternatives are worse I guess you haven't looked at the cost and outcomes of the rest of the developed world's health care systems.
But, yeah, keep listening to FOX. They got the inside track all right. You are owned by half of the duopoly.
your sentence that your only agenda is a sustainable health care system tells it all. that's my agenda aslo. but how we define "sustainable" is SO VERY DIFFERENT. There's no way I want to cede my freedoms to you to define what is sustainable and you also should not want to cede your rights to me to define it for you. Illustrated my point so crystal clear,...centrally planned (one payer) systems are INCREDIBLY innefficient at allocating resources among a large group because the individuals in the group have such differing desires. A system where individuals choose for themselves is not perferct, but it's a far more efficient allocator of scarce resources than central planning.
Why are "big pharma" bad and not "big govt". There are 15+ large pharmaceutical companies out there...no one player controls the market and yet it is "big pharma" power you're displeased with. Yet you're perfectly willing to concentrate all of that currently diffused power into the hands of ONE entity....namely "BIG GOVT". That just makes no sense to me.
wow, way off base. don't watch fox. not a corporate shill. so,...dead wrong there. and what is the hate hard on that so many people have for fox? WTF? they provide news from a conservative perspective, yes it's biased, we all know that. And we all know that CBS, NBC, ABD, PBS, CNN, MSNBC provide news with a left bias. It's called compeition for viewers. I could just as easily try to debase your argument by snarkily suggesting you keep listenting to their tripe, but I won't. I truly hope you don't beleive that the only bias that exists in news is Fox.
Holy smokes...the left has had their way with the media for 30 years now and the moment an opposing view gets traction it's freak out city.
Don't get thrown off base and try to put people in some pre-defined box that conveniently fits some steroetype and allows you to demonize or belittle them and not address the merits of the argument. i'm just an average joe that works to provide for his family. not rich, no where close to it.
you only went a little ad hominem, not too much, so i'll play along.
constituion thumping? since when is defending the founding documents a negative? I could call your position constitution shredding. The fact remains, in order to carry out single payer as presently envisioned, many clearly defined constitutional rights would have to be violated. If that doesn't bother you, just remember there are other people out there that would like to conveniently remove various other of your protected rights that you may hold dear. Now that you've set the precednet that it can be done....watch out.
If you still want single payer, then the Constitution has clearly defined methods to go about changing it. Try that route. If you violate the Constitution by ignoring it, then how do you expect future generations to abide by any laws that you pass....since the precedent is to ignore the rules and do what you want?
What is sucking our resources? That is written to sound so negative but who gave you the power to define what is an appropriate use of resources and what is not? I don't want anyone making that decision for me and anyone who thinks they can make that decision for 320 million people is just plain wrong. You definition of sucking is not mine and just as you don't want me to control you major life decisions, I respectfully don't want you to control mine.
Cite the cost and outcome studies. Europe can afford to pay such a huge portion of their taxes on healthcare because of the defense umbrella we provide them. They spend dick on their defense and have more to allocate to healthcare. Not saying it's right or wrong, just is. We have less wiggle room there.
I've lived in Europe. The care is mediocre, slow, antiquated, and without the US...severly stunted in terms of innovation.
The US profit motive drives inventors to come up with new cures and technologies. It's expensive at first but after a while it becomes mainstream and acessible to all. Take away that profit motive and innovation will be much less. So 20-30 years from now you'll have much the same stuff as today.
aaahhh, this is taking too long. gotta go work.
exactly, who is enslaved in your first comment?
All that blather and you still can't answer the question of why our health care is so much more expensive than the rest of the world for worse outcomes? If you need evidence, start with the World Health Organization and dig around a little instead of listening to FOX:
http://www.photius.com/rankings/healthranks.html
Sorry your anecdotal evidence of having "lived in Europe" isn't very convincing. I've talked to many who have said just the opposite so my anecdotal evidence refutes yours.
The US profit motive has been corrupted by multinationals and crony capitalists. The little guys are useful to move forward the agenda for these special interests with the money to influence legislation, but only to be used with propaganda such as yours. Are you being paid by one the special interests or are you happy with the status quo?
As far as the Constitution goes, too bad the forefathers didn't conceive a crony capitalistic outcome to our plans. At least we have the hindsight to see the error and do what we can to fix it.
okay, i did dig around for 10 seconds on Google. here you are. That study is a joke/disaster/innacurate...you take your pick.
That's a severly flawed report relying on old and incomplete data, and admitted to be innaccurate by the WHO:
"Philip Musgrove, the editor-in-chief of the WHO report that accompanied the rankings, calls the figures that resulted from this step "so many made-up numbers," and the result a "nonsense ranking." Dr. Musgrove, an economist who is now deputy editor of the journal Health Affairs, says he was hired to edit the report's text but didn't fully understand the methodology until after the report was released. After he left the WHO, he wrote an article in 2003 for the medical journal Lancet criticizing the rankings as "meaningless."
link here: http://online.wsj.com/article/SB125608054324397621.html
"In fact, World Health Report 2000 was an intellectual fraud of historic consequence—a profoundly deceptive document that is only marginally a measure of health-care performance at all. The report’s true achievement was to rank countries according to their alignment with a specific political and economic ideal—socialized medicine—and then claim it was an objective measure of “quality".”
link here: http://www.commentarymagazine.com/article/the-worst-study-ever/
we do get value for our extra dollars, we get better outcomes vs Europe.
link here: http://www.bmj.com/content/344/bmj.e2766
Again, your claim that i'm a fox viewer or a corporate shill are just plain wrong. Propaganda? Riiiiiight. And ALL of YOUR data are above reproach with NO AGENDA whatsoever.
I get it. You're 100% right and no amount of data to the contrary will get you to think critically of the other side of an issue. At least i'm willing to examine proposals made and judge them on their merit and not attack people ad hominem. I urge you to do the same.
next.
Guess I'll skip reading the neocon garbage at Commentary Magazine, too much to do, too little time.
I love picking apart studies, but your third link doesn't give me anything to dig into. No citations, no affiliations, no methodology. From what I have learned elsewhere, a big part of our "better outcomes" comes from extensive screening. Lots of cancers, like prostate, never become life threatening, but if we discover them and treat them we get to skew the outcomes. Lots of that kind of stuff to look at, but your citation is useless as is.
Thanks for the WSJ link. As usual, the best information is in the comments section on that rag. Here is one quote:
"While calling the WHO health care system rankings into question seems justified, you might have mentioned that the US does quite poorly on virtually every comparative health system ranking according to a range of measures. For example, according to CIA data for 2006, the U.S. ranks 47th in life expectancy. The Commonwealth Club's 2006 National Scorecard ranked the U.S. 15/19 in "avoidable mortality" and near the bottom on a range of other measures of health care access and quality. The U.S. ranks 22nd in infant mortality in a 2005 study conducted by a Heritage Foundation analyst and Mayo Clinic physician, Kevin C. Fleming."
wait,...the people that did the study claim it was misused for the ranking as presented and you don't acknowledge that? stunning. okay, you're free to skip Commentary Magazine, but that means I'm free to skip the WHO study because it's a proven "rag" of a study. See, we each get to pick and choose the data we cite, fun huh?
admit it, the issue is not as black and white as you previously thought, it's far more complex than solving with a pithy zero hedge post.
You may love picking studies apart but that doesn't fit with you citing such a proven flawed study. If you're gonna say it, you gotta do it.
So. I took another few minutes to look into the Musgrove thing, still couldn't wade through the neocon propaganda at Commentary Magazine, but am providing a link a Lancet response.
http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2803%2913...
So, here's a more recent study by the Commonwealth Fund. A quote:
"All of the countries in the study, except for the U.S., provide universal health care, and all struggle with rising health costs. The level of health care spending in the U.S., however, stands apart. If the U.S. were to spend the same share of its GDP on health care as the Netherlands—the country spending the next-largest share of GDP—the savings would have been $750 billion in 2009."
and
"Japan offers an interesting model for controlling costs. Although its health care system shares certain features with the U.S., Japan is the lowest-spending nation of the group ($2,878 per capita in 2008). Japan operates a fee-for-service system, while offering unrestricted access to specialists and hospitals and a large supply of MRI and CT scanners. Rather than containing costs by restricting access, Japan instead sets health care prices to keep total health spending within a budget allotted by the government.
In the U.S., individual payers negotiate prices with health care providers, a system that leads to complexity—and varying prices for the same goods and services, according to the report."
http://www.commonwealthfund.org/News/News-Releases/2012/May/US-Spends-Far-More-for-Health-Care-Than-12-Industrialized-Nations-but-Quality-Varies.aspx
And, hey, the Commonwealth Fund doesn't have any neocon ties to the Hoover Institute (or neolib ties for that matter) to give me reason to be skeptical.
Spooz wrote:
"At least we have the hindsight to see the error and do what we can to fix it."
I think we agree here on one thing. If you beleive there is something that needs altering in the Constitution, then please go about doing it within the existing legal framework to do so. Go for it. I simple disagree about what you're trying to do but I agree you have the right to TRY it, within the rules.
The forefathers didn't have to conceive of every possible future outcome. That was part of their brilliance. All they had to do, and did, was provide methods to modify the constitution. And we have, many times.
"Reduce government interference in the insurance industry"
NO, precisely wrong.
You make the entire health insurance industry ILLEGAL.
All of it, top to bottom.
People may provide health SERVICES for service-FEES.
Insurance is a scam to collect a fee and provide NOTHING.
This is MONEY-LAUNDERING. Everyone doing this for medical insurance should be jailed for life without PAROLE.
"eff the one payer govt system. they can't do shyte right...social security: bankrupt, medicare: bankrupt, medicaid: bankrupt"
In Canada and Australia, in Sweden and Norway, it is NOT bankrupt and it's a lot more affordable including all taxes compared to USA health care - higher quality of care too.
Fortunately health care is THE FIRST AND TOP-MOST right and it is very cheap.
It starts with preventative medicine.
It continues with education about billing and jail for frauds.
It survives by using single-payer systems only and to banish as ILLEGAL The practice of denying care for "pre-existing conditions"
That is 100% sustainable.
To say health care is not a right is to demand death of everyone as soon as possible for no reason whatsoever and this would crush the entire economy as well as damage the gene pool beyond reparation.
IF a Govt of any sort still exists after TSHF.
Eactly what happened in France and the UK after WW1.
The prority then was paying family's to have children.
However, back then familys were still nuclear and looked
after their elderly.
As much as it pains me(@55 years old),Medicare has to go.
Or the age qualification has to be raise to 105.
Doesn't have to go, just needs to be replaced with Medicare for all (single payer) and reduce the costs sucked out by Big Pharma, corporate medicine and insurance profits.
It was easier to take care of the Patient with a LPN, Orderly, Nurse and Ward Clerk near the beds in view.
Today's expensive crap keeping our vegetables alive as a means of income... a special kind of what was the name of that medical novel series?....
The title of the article points to Medicare as unsustainable; the problem as I see it is much larger and is the entire US Healthcare market in terms of the growth rate as a % of GDP.
We were at about 9% in 1980, about 12% in 2005 and are running about 17% now, and headed for 20 + % shortly.
As I see it many elements of the "Affordable Care Act" and other legislative requirements (ICD-10 and 5010 code sets) are not going to help as they are increasing the complexity of the system overall and adding cost to ongoing operational overhead without providing a corresponding value in improved health of people.
I believe that as system complexity grows the amount of waste as a percentage of system output is also on a big growth trend. While I have no facts to prove this, I have observed a number of large very large expensive Healthcare projects in large organizations go on year after year after year without the least bit of tangible outcome or benefit. Often no one notices the silent death of these projects, lawsuits are filed, payoffs made but no one is held accountable. As the whole thing fades into institutional ADD/amnesia a slew of new projects are in progress.
If I were master of the healthcare universe I would demand to see a much higher level of both adaptability and accountability of those in charge based on results on a few measurable themes:
1. System project change implementation expectations (get something out the door that is useful early on, or kill the funding).
2. Improve the health of system participants including; patients, providers, payers, etc.
3. Reduce administrative complexity.
That’s my two cents for the day (both pure copper wheat pennies by the way 1909 S VDB)
All the best!
Mike McGspot
What a physician bills and gets paid are two different things. Medicare posts their fee schedule and if you participate then you are bound by that schedule. Doesn't matter if you billed $400,000 or $650, etc. The rest is a write off. Commercial insurers closely follow medicare billing guidelines but usually don't disclose their fee schedules in full to physicians. So if you charge less than what a commercial insurer is willing to pay, they will not pay you the higher amount. As a result, the "cash" fees are a lot higher just so you don't leave money on the table. Most physicians aren't going to sit and figure out what Aetna, United or Horizon will pay for a certain procedure so we will just take the medicare fee and inflate it by 50, 60, 70% so we don't leave money on the table. Ultimately, the difference is written off. It's when uninsured patients enter the system that they can get screwed. In my practice, we charge them a few percentage over medicare (I'm not allowed to bill less than medicare). But most self pay patient's end up stiffing us anyway. While I agree that Medicare is in trouble, let's use realistic numbers. And for you garlic lovers, make sure to stop that a few weeks before surgery or you'll bleed out!!!
I visited the Er for a problem that resulted in Pain that needed controlled medicine to stop.
The chemistry off the blood draws along with all the billing:
Hospital, Doctor, ER Supplies, Needles, butterfly etc, chemistry, Labs as far as two states away, xrays, CT, MRI, Linens, food, etc etc etc etc... turns into a tornado of billing statements that buries you at the Post Office and leaves you standing desitute.
At least you are feeling better and should be strong enough now to handle this shit.
Doctor Sahab,
Thank you for articulating a billing model by payer from the provider view as well as the warning on pre surgery garlic.
I would be most interested to hear what you see as our most pressing problems in healthcare and what your top change recommendations for this system, also what to perscribe to keep the vampires away if we need to get of the garlic for a little pre surgery prep?
Please share as you see fit.
Thank you,
Mike McGspot
"That which is ......" Does that mean the 700++billion subsidy to the Military Industrial Complex? You know, for Weapons of Mass Destruction and Wars of Cultural Racism and Imperialism? Nooooooo, we just want to watch all the little old ladies Die in the Gutter! "Let 'em Die, "Let 'em Die" "FREEDOM means all those little old ladies NEED to DIE!
Leave the Military out of this.
Liberty requires the Tree to be watered with the blood of Patriots.
And the Military is one of the Last Remaining venues where Medical assistance is a Medic call away.
Is that before or after raping the children of the country you invade?
Now, let's review the bidding. First, it has been calculated that pensions are unsustainable in our glorious capitalistic system. Next up, healthcare, a system that only covers the 65 and up set to begin with, also unsustainable.
Most countries that are even moderately socialist have had full fledged socialized healthcare covering people of all ages for decades longer than US Medicare and are not finding it necessary to conclude that health is unaffordable.
Yet, there are those who think the viability of capitalism cannot be questioned, ever?
That's rich. Pun intended.
The title of the article is Freudian!
Just 'who' are the unsustainable?
Well, I think with Obama care it will not matter. As those that are too old will be denied treatment and they will Die. The Government will save future SS Payments and Health Care for the elderly.
A type of Eugenics. Kill the old to depopulate the planet. After all, all the Money they paid into the system thru Taxes and into SS, Medicare are gone. So be done with them.
It's important for all of you young and relatively healthy people to realize this:
When you pay taxes, and healthcare premiums, and inflated prices for healthcare when you need it, you are essentially subsidizing the elderly, the diseased and disabled, the obese, the drug abusers, who have chronic medical conditions and use up most of the healthcare resources.
"Bankruptcy" from healthcare costs is true, but partly a lie. If the costs were actually passed on to the end user, many of these people would have NEGATIVE net worth. Or, they would be dead. Which of course will happen to all of us eventually.
How is the rest made up? Easy. National Debt. Treasury bills are created like magic, and so nobody ultimately pays, but your grandchildren, when the currency finally dies.
Despite everything that you might read from the right (or left) wing, healthcare is 100% socialized in America. We are all paying for each other.
its important for all of you young people to be able to develop critical thinking skills necessary to filter neocon and neolib propaganda.
the problem with health care is that profits are being put above affordable care. here are some things that could change that:
1. Single payer health care so that we have the same leverage against Big Pharma that the rest of the world does and we can stop paying more for prescriptions. This would also keep the insurance industry and corporate medicine from sucking profits out of health care.
2. Subsidized education for health care professionals, who work for salaries.
3. Development of data on procedures and outcomes to get information on best, most efficient and economical practices for care
4. More cost effective front line employees like nurse practitioners who can take care of the easy stuff and pass on the complicated stuff to specialists/internists
5. More end of life care provided in hospices instead of ICUs when outcomes are unlikely to change. Hospice care would focus on making patients as comfortable as possible and procedures would be limited.
Just a few ideas off the top of my head. I hate to see propaganda being spread by the 1% in an effort to divide the sheeple into factions.
For-profit prisons will take those drug-addicts and make them work $20/hour jobs-worth but pay 25cents an hour. Maybe less.
It's the New (lucky!) Chinese Sweat Shop (tm).
Medicare will otherwise rehabilitate those not incarcerated so they can be productive workers.
Win-win!
"Medicare was billed $120,000, or roughly the lifetime contributions of three workers"
But you must not realize that Medicare does not pay what it is billed. That is routine and exactly why some doctors don't want to work with medicare.
If the govt was paying the full Medicare bills, we would have been bankrupt a long time ago.
It really seems like so many people are just itching to see a massive collapse so they can watch people die. I think you will get what you want PLUS more.
Sadly, those, like Smith, are going to find out the hard way just how much humanity is an interconnected web. You're just not going to be able to kill off half the population without causing suffering for yourselves...