Uwe Reinhardt teaches economics at Princeton and writes about health care for the New York Times. He knows a lot about economics and health care. In an interview with Robert Siegel on NPR Friday (plus a companion blog post on the same topic), he explained why he finds the American system of pricing health care services laughable:
SIEGEL: Is there another market you can think of in which apart from practices of discriminatory, predatory pricing, that the same good or service can cost consumer B a fraction of what it costs consumer A or consumer C, depending on what kind of insurance they have or how rich they are?
REINHARDT: Well, I mean, if you go on an airplane, the person sitting next to you on an airplane probably paid a much different price for that fare than you paid. It depends who you are, whether you're a businessperson, whether you bought it 30 days ahead of time and so on. This is called price discrimination. Hotels do it. Airlines do it. But in no other market is it the case that the customer doesn't even know what they're going to get billed. It's just an unseemly system. You cannot go on the Web and find out if you need a hip replacement what a hospital will charge you for that. You can't get that.
So, I say it's like blindfolding people and then shoving them into Macy's or Lord and Taylor's and say, go and shop efficiently for a shirt. You are looking for a man's shirt. And you may come out with ladies' underwear because you can't see nor can you see the price. The way American hospitals price their services, to me, is a source of amusement, frankly. But if you are uninsured and middle class, it's not funny [Uwe Reinhardt, interviewed by Robert Siegel, "Study Reveals Wild Disparities in American Hospital Pricing," NPR: All Things Considered, 2013.05.10].
Tell me again, capitalist friends: how can free market forces solve our health care problems when producers won't tell consumers how much their products cost?
Reinhardt doesn't advocate my preferred solution of single-payer. But he sees some benefits in making health care costs uniform and transparent with a single-negotiator system:
But my preferred approach would be that all the payers - Medicare, Medicaid, private insurers - would jointly negotiate with all the hospitals in the region a common fee schedule and then everyone would pay that [Reinhardt to Siegel, 2013.05.10].
The same fair and honest prices for everyone, negotiated by all of us working together in our best interest—sounds plenty American to me!
The concept of a single negotiator along with a single payer is fantastic and in a free market, this is the only fair way of going. You point out that it is "free market" and you are correct. What you miss and has been missed all along is corruption. That is huge. We see that all the time including right here in South Dakota with overcharges and downright theft. The Rapid City Regional Hospital, the key component to health care delivery in western South Dakota, parts of Wyoming and Nebraska, convicted of Medicare fraud and forced to pay a few million in fines. How much was taken, who knows, but that fine was the end result. Regional was just one in our state, there have been others. Our state is small so think about all of the other providers and hospitals in the US and you kind of get the idea about why many providers and insurance companies fight this healthcare reform tooth and nail. The current governor of Florida's business was also found guilty of fraud and had to pay a billion with a B in fines. This guy is another one of those family value dudes, you know, new republicans. It is a cash cow for many and they do not care they have blood on their hands as long as their pockets are filled.
If you have a life and death situation, who is going to say, well Doc, your prices are to high. Most of peoples health care costs are when they are elderly. Many do not comprehend well and can not go back to work to make up for the costs. The government is not in it for profit as an insurance company is, and so they are the best unbiased entity that is not under pressure of dying or going broke. The government is by the people for the people and paid for by the people. Do we need to hire good honest people to make these decisions, of course. Do we need Thune mocking how many pages of rules it takes to know exactly what it right and proper in all situations, well no we do not. All those rules means that we can know what health care should be and how it is to be done properly.
The Eugene Register Guard had a really informative article on this subject in today's edition. However, it failed to answer my question about coverage for those who are unemployed or work only one part-time job. Cory, you end your story with a statement that makes since in an "ideal world" : "The same fair and honest prices for everyone, negotiated by all of us working together in our best interest—sounds plenty American to me!" However, we don't live in an "ideal world." In reality I see the Affordable Health Care Act (how it's currently written) causing massive economic problems for an already stagnating economy. The reality is that most of us, who have jobs, earn just enough to make ends meet (to cover our current life expenses).
My point is and I continue: many will not be able to afford this.
"Affordable" Health Care Act. That part of the name should be in huge quotes with a question mark. Will it really be "affordable?" I seriously doubt it.
Cory, another thing to seriously consider: there will be ways around this for companies. In fact, many companies are already inquiring how to do just that. They may just begin hiring more "temporary" employees from temp employment agencies. The "Affordable" Care Act may result in a larger pool of part-time and temporary employees who will still lack insurance. In other words, the act may just increase these types of workers and decrease stable, permanent income jobs.
The number and use of temporary employment agencies in Eugene has risen dramatically.
Now, I'm beginning to understand why Stephanie voted against the "Affordable" Care Act. Too many questions and concerns about this are becomming much more clear as we get close to the Act's official enactment in January 2014.
Stephanie voted against the "Affordable" Care Act because she had genuine concerns, like most Americans, about the realistic sustainability of such a program and it's unrealistic mandate on many who are not going to be able to afford it. She can not be accused of voting against it to appease Republicans in South Dakota like some have accused her of. Now, it's becomming quite clear that Representative Herseth shared the concerns of many across the political spectrum. That's the real reason she voted against this.
I gotta wrestle with you there just a bit, G. She could have expressed and fought to address those concerns by arguing for a stronger bill with cost controls, perhaps won by going whole hog with something like Reinhardt's single-negotiator plan or by revisiting the Medicare prescription drug benefit to allow the government to bid those prices down. Did SHS fight for a stronger PPACA, or did she keep trying to drag it R-ward?
Young Ms. Herseth is wiser than some. She is the most reasonable of the Democrats in recent decades. We must give credit where credit is due, and Ms. Herseth saw that Obamacare was bad. Bad.
i miss bill fleming, don't you, grud?
I root enough pearls of wisdom from his ravings as it is. Sometimes when it is late at night and I miss him most, I go back and re-read some of his most obnoxious stuff and then use it to prepare arguments for breakfast.
Cory, as much as I hate to admit it. I have to agree with grudznick. Steph did what was best at the time. The Democrats, fully in control of Congress at the time, did not bother to get reasonable debate to pass common sense healthcare reform. I know because I was literally in Washington, D.C. when the bill passed and there was lots of controversy from protestors on the Capitol Mall. The current act is not going to work and I think you, along with many Democrats, know that deep down, but, you are not going to admit it...at least, until it becomes fully enacted and we see exactly the downside. Many people are not going to be able to afford the mandate.
I will remain patient on this subject because it's all I can do, but, I know that this bill will be an epic failure and time will prove me right. Unfortunately, our economy is going to suffer because of it. But, we'll have to wait the test of time before most Americans see it and protest to get rid of it when enough hurt from its mandates and can't afford to live according to its mandates and that is coming...
Cory, I'm not against you on everything, but, on the ACA, I am...
Pelosi said something like: Let's pass the bill first, and then we can find out what's in it...The ACA that is. That's what she said at the time and I knew nobody knew all the details, especially, those Democratic politians who forced it through with little debate. Stephanie knew that this is bad politics. Thank God the Democrats had a Stephanie Herseth at the time and frankly they need her or someone with some reason like her again.
ObamaCare was NOT well thought out. It was rammed through Congress without careful consideration. While I can appreciate the lofty goals that such legislation was hoped to attain, the end result is going to make health insurance unaffordable for our family. We will have to dramatically reduce the quality of the coverage we have now.
Michael, you express what is unfortunately going to hurt all of us...
Frankly, I don't know how anyone is going to live a quality life if we are forced to live and pay according to the dictates of the ACA???
The individual mandate that is at the core of Obama's health care reforms originated with the Heritage Foundation in the late 1980s. People had 20 years to think it out.
One can argue that it's bad policy or good policy, but twenty years indicates that it is well thought out.
http://www.forbes.com/sites/aroy/2011/10/20/how-a-conservative-think-tank-invented-the-individual-mandate/
Mr. H. should understand and defend that having something jammed down your craw, even if it's happy health care or more money for good teachers, isn't the way to do it.
The cretins behind Obamacare do not share Mr. H's point of view in this matter.
Speaking of Bill Fleming, where is he?
I hear a lot of whining about the ACA but haven't seen a solution to the health care problem, which is typically of Republicans.
It just isn't about people who can't afford health insurance, it's also about people with pre-exsisting conditions who can't get insurance. let them die?
The ACA had to be passed. As dysfunctional as a lot of it is, it would have taken another 50 years (or more) for our more dysfunctional Congress to get anything else passed. The public option should have been in it, then big insurance would have been forced into lowering their prices. But no, the public option was some kind of terrible, evil entity. Big insurance got their way, but in the long run, I think this big historic healthcare bill will change healthcare in America for the better and give it a more level fair playing field.
There has been nothing more thought out than health care reform. People who say "it was rammed through Congess" haven't paid attention for 20 years, and whatever they have to say after making that statement should be ignored. There have been partial health care fixes in the form of bills and there have been legislative hearings every year over that period. Everything that is in Obama Care has been studied repeatedly for years and years. There is plenty to criticize about Obama Care, including the lack of a public option, but what you can't criticize legitimately is that it is not well thought out and that it was rammed through Congress without much thought. That's a complete lie.
I beg your pardon?
There was not bi-partisan support for ObamaCare. Many changes were made late in the legislative process to gain those few last votes needed for passage. We are still learning new things that will be required of us. We don't know if it will help us with health care costs or make going to the doctor a luxury the middle class cannot afford.
I sure hope it works out but until the feds get better at communicating, I will still be worried.
Mr. Fleming is around when he wants to be around. And he has huge doubts HUGE doubts about this Obamacare crap that is going to cost Mr. Weiland the election.
Nobody said it was rammed through Congress until now because I am saying that. We were talking, Mr. Pay, about stuff being shoved down one's craw. Like bonuses for teachers, and Obamacare.
Congress may have bent over, but the public will not. Take back your thermometer from my anus, sir.
http://www.cpapracticeadvisor.com/news/10913493/americans-still-dont-understand-obamacare-health-plans-what-the-different-options-are
"When survey takers were asked, "How will the new ObamaCare Bronze, Silver, Gold and Platinum health plans differ from one another?" 86 percent of the respondents said they didn't know. Only four percent of those in the poll selected the correct answer: "The percent of medical costs covered by insurance," when listed among five answer options in the survey."
Get mad at your politicians and ask them why they're always in bed with big business. Doctors are just as much to blame also. Look up Pro Publica and you can see how much your in kickbacks your doctor gets from big pharma.
Your doctors get kickbacks from big pharma (meant to say)
http://www.propublica.org/
http://projects.propublica.org/docdollars/states/south-dakota Hmmmm, look at all the ethical doctors....
Republicans have been part of bi-partisan support on anything. They have been AWOL on sense. The bad parts of ACA are the result of the GOP influences. Then they turn around and attack it because of the problems they themselves introduced.
Like the attacks on Hillary regarding Libya, the attack on ACA was designed to deny Obama a second term. Now we have the GOP wasting time trying to turn insignificant irrelevancy into a reason to impeach Obama. I do hope they try that. It worked so well against Clinton.
Send the retrograde obstructionists howling in the wilderness for 40 years, and maybe the congress will actually represent you and I instead of $20 million per year executives.
I just do not know how the average person is going to be able to afford this? Nobody seems to have an answer to that crucial question.
Well, I guess we all have to wait see if it will really work out. . .I have serious doubts that it will work and I do believe many people are not going to have the money to pay for this and that is what will ultimately decide the fate of the "Affordable???" Care Act.
G-Man, at peril of questioning your first-hand experience... what Kal Lis and Donald said above. How was there not debate about the PPACA? Debate and negotiations extended from summer 2009 to passage in March 2010, all the preliminary discussions all the way back to when the individual mandate was a Republican idea, all the compromises Obama made (and those compromises are at the root of why the PPACA still has problems)... it seems there was all sorts of debate and input... just not from us leftists who can look clear-eyed past our borders and free-market obsession and realize that single-payer works pretty well in other places, that single-negotiator would actually be better for our economic liberty in fields where the free market does work, and that a public option would rock the house for folks who can't afford the mandate on the predatory private individual market.