What’s the Truth About the Cost of the Affordable Care Act?

Paul Krugman of the New York Times editorial staff has accused the Republicans of lying in their recent statements concerning the deficit being produced by the Patient Protection and Affordable Care Act (hereafter referred to as the ACA), which is also known as “Obamacare.” He says that the ACA is actually projected to cost about $50 billion less than originally predicted by the Congressional Budget Office. What Mr. Krugman does not report is what follows in this blog post.

Republicans have noted that the ACA is producing a huge federal budget deficit. They have acknowledged, however, that the very recent reevaluation of the deficit by the Congressional Budget Office shows that there is to be a $50 billion deficit decrease over the 10-year period of 2012-2022. http://1.usa.gov/GP62s2

If one will examine the last line of table 1 in the above link, he will note that the projected budget deficit will, indeed, decrease by $48 billion over the next 10 years. However, this “decrease” is not a decrease in the total deficit, but it is a decrease in the rate of INCREASE of the projected deficit. The ACA will finally be accompanied by a total increase in the national federal debt by a little more than $1trillion according to the report by the Congressional Budget Office.

Americans were told by President Obama that this ACA would not cost us any money, because the costs incurred would be offset by savings in general medical costs and revenues received as a result of payment of penalties from those who opted not to buy the insurance.

I think that if we are to look for someone who has lied about the cost of the ACA, we should look to some place other than the conservative Republicans.

You Can Help Cut Health Care Costs, Yourself!

Often, patients do not realize that doctors have no idea what their medical orders and prescriptions actually cost. Helping your doctor understand what his orders cost you will help cut health care costs.

In the May issue of Archives of Surgery, a study was published from Rhode Island Hospital in Providence. The authors simply informed the staff doctors of the cost of “routine” lab tests, which the doctors were ordering.

At the beginning of the 11 week study, the daily cost per non-intensive care patient was $147.73. At the end, the daily cost had dipped to $108.11.

Staff doctors were not coerced into ordering fewer tests. They were only informed of the cost of the lab tests. This simple procedure decreased hospital costs dramatically.

You can do essentially the same thing with your doctor. Just let him/her know how much his prescriptions are costing. Tell him how much out-of-pocket money it cost you, and tell him what the actual, total, cost of the medicine was, which was paid by your insurance.

You might be surprised how this simple action will decrease your health care costs.

National Health Preview

I have been all in favor of several features of the new ObamaCare bill at one time; but now I am beginning to have second thoughts. The state of Massachusetts has a law called CommonwealthCare, which is an almost exact copy of the new ObamaCare bill. We can learn a lot about how ObamaCare will work by looking at CommonwealthCare.

A survey of medical care delivery in Massachusetts was recently done by the Massachusetts Medical Society. Following are some of the results of the survey:
Fewer than half of the state’s primary care practices are accepting new patients, down from 70% in 2007 before the Massachusetts law came into being. The average wait time for a check-up with an internist is 48 days. It takes 43 days to secure and appointment with a gastroenterologist for chronic heartburn, up from 36 last year. It now requires 41 days to secure an appointment with an OB/GYN, up from 34 last year.

Health insurance premiums in Massachusetts are among the highest in the nation.

Emergency room visits jumped 9% between 2004 and 2008, due, probably, to lack of access to primary care providers.

Medical care providers are refusing to accept CommonwealthCare payments for treating patients. Only 43% of internists and 56% of family physicians accept CommonwealthCare in payment for their services. The respective figures for acceptance of price-controlled Medicaid are 53% and 62%.

ObamaCare looked good at first to many people; but I think we should all take a hard second look. This thing will begin to effect the health care delivery system in the whole nation exactly as it has affected Massachusetts.

Result of the Health Care Bill: My Opinion, Part 2

The alternative to the 1st possibility I outlined in my last blog is that many people will be disenchanted with the new health care deal; and they will revolt. Already we are seeing that companies that insure their employees are revising their health care contracts, preparing for new expenses. It is reported in the Wall Street Journal today that drug companies are raising drug prices 10%--the largest hike in years. The drug companies are anticipating increasing costs mandated by the new bill.

These tendencies give more fodder to Republicans who want to win in November; and if voter discontent with the bill is strong enough, they certainly will. When the Republicans recover control of Congress and the Senate, they will most certainly make modifications to the health care bill. Hopefully, they will keep some of the good parts and insert some good things. They will keep the features that allow sale of health care policies across state lines. They may well keep the parts called “rationing” by opponents of this bill, i.e., the committees that supervise distribution of questionable surgeries and treatments. I hope that they will make marked inroads into lowering tort claims, and I hope that they will institute a prohibition against using Federal dollars to fund abortion.

There is no doubt that President Obama will veto most of the changes that Republicans make to the bill, and it is quite likely that the hoped-for Republican take-over will not include a filibuster-proof majority in either house. However, public opinion may be so strong that even President Obama may bend to the wishes of the American people, at last, and do something acceptable to us.

I sincerely hope that this last option will be the one that finally takes place. The present bill is ill-conceived and will be horrendously expensive.

Results of the Health Care Bill: My Opinion

I believe that we, in the United States should look carefully at the model of socialized medicine we can see clearly in Great Britain that we can see in their National Health Service. The Brits are now in a great controversy with their elections coming up on May 5. They are seriously considering revamping their health service because their cancer survival rates are lagging behind the rest of Europe and especially far behind those rates in the United States. The Conservative Party is proposing pumping £1 billion into the system to improve access to cutting-edge cancer treatments. The Tories are proposing allocating £200 million to pay for drugs that have been prohibited or controlled by Britain’s’ rationing bureaucracies, thereby giving doctors more latitude in prescribing. The Labour government wants to avoid both of these measures. What does all this mean? The Brits are unhappy with their medical and treatment options for cancer.

So…what can we learn from this? I believe that the new American health care bill will result in one of two likely outcomes. The first, I will outline below; the second I will post on my blog next:
1)There will be a mixture of outcomes in America. Many people will be happy with the new services resulting from the new law. Some will be unhappy, particularly older people; but, overall, the positive effects will override the negative outcomes; and a majority will want to keep the services.
2)The costs of the program will go out the overhead.
3)Republicans will paint the program in such an unfavorable light that they will sweep into control of the government.
4)Then, the Republicans will refuse to fund the services adequately.
5)Services will deteriorate; and controversy will cover the whole program.
6)Democrats will come back into power, raise taxes, and borrow more money from abroad to fund the program.
7)Republicans will return to power.
8)Etc., etc. The cycle will continue.
I believe this is the worst outcome of the new law. Follow the next blog post to see the alternative.

Health Care Industry Profit Margin

It has often been said, lately, especially by President Obama, that the health care industry is taking inordinate amounts of profit from the money it takes in from premium payments paid by its customers. The table below indicates that the health care industry is #86 among other industries in the United States in amount of profit margin. This table was constructed in August 2009 by Mark J. Perry, Professor of Economics and Finance in the School of Management at the University of Michigan. Dr. Perry has a Ph.D. from George Mason University and a MBA from the University of Minnesota. His complete report on this issue can be viewed at http://tinyurl.com/nyw78m. (Double click on the table to view it in a zoomed in size.)

It seems to me that, even though, 3.3% of the premium money that goes into health care payments, is a lot of money, this is not an unreasonable amount of profit for an American industry.