Health Care Passes in House 220-215

[De Selby]

Shootinstudent, please show me an example of anything the government does more efficiently than private business. At this point I'm 100% certain that if I ran a lemonade stand, you'd say it sours you on free market principles.

If any mutual fund operated the way Social Security does, the board of directors would be in jail. Ditto for any insurance company that was run like Medicare.

There are three major reasons why health costs are higher than in years past. One is the biggie: advancements in technology, which are costly but incredibly more efficient. The second is Medicare. Doctors and hospitals treating Medicare patients are losing money on the deal, and so transfer the lost money to those with insurance. The third is the number of people who don't have insurance who are treated, and the costs for the free services are passed on to those with insurance.

If doctors and hospitals could bill Medicare at full rate, your health care costs would go down. Your taxes would go up astronomically, but your health care costs would go down.

So here's the question:  How come the cost for private care here is less than what medicare has to pay for those same services, and why isn't the technology any different if technology is driving the cost in America?

This would all make sense if private medical care prices were higher here than in America.  But they aren't - they're on average far cheaper.  And you don't have to go to the wal-mart to get that price; basically the absolute cheapest that's been cited here in a few places with a few doctors is the norm in Australia for a standard visit in the most expensive parts.

You'd think if technology advancements and the losses of medicare were the cause of high American prices, the prices would actually be higher here in the private system, or at least similar to American prices, because it is entirely pay-your-own. 

Yet that is not the case: the cost of private medical care here is far below what it is in America. 

The only explanation for that I can see is that the public care competition keeps the prices down.  If private care gets too expensive, people go to the public system.  Also, the insurance companies have very little leverage to demand profits for the same reason.  And with those two pressures, there's still a fully accessible private medical system on top of the public one.

[Strings]

>You'd think if technology advancements and the losses of medicare were the cause of high American prices, the prices would actually be higher here in the private system, or at least similar to American prices, because it is entirely pay-your-own.<

The fact that the private system over there is entirely "pay your own" is exactly why it's cheaper: those choosing the private system don't have to "make up" for the non-payers or medicare underpaying providers...

[De Selby]

>You'd think if technology advancements and the losses of medicare were the cause of high American prices, the prices would actually be higher here in the private system, or at least similar to American prices, because it is entirely pay-your-own.<

The fact that the private system over there is entirely "pay your own" is exactly why it's cheaper: those choosing the private system don't have to "make up" for the non-payers or medicare underpaying providers...

that's certainly part of the reason - but the combination of private and public expenditures here is still far below what it is in the United States.  The actual prices for all services are higher there, which means that they are not as efficiently delivered.

[Monkeyleg]

shootinstudent, I was talking about the US. I can't speak to what's going on in Australia without taking time to research the system in that country, time I don't have.

So let me rephrase my statement: show me an example of anything the US government does more efficiently than private business.

[French G.]

Good summary. I'd also add a fourth. Malpractice insurance has become ridiculously expensive for most doctors, meaning they have to charge more for services.

AND practice defensive medicine (i.e. order more tests inter alia) which also costs more.

That's why our Speaker of the House was adamant that a tough tort reform package be an integral part of the final bill.

[Racehorse]

That's why our Speaker of the House was adamant that a tough tort reform package be an integral part of the final bill.

I wasn't sure if your post was sarcasm or not (figured it was), so I searched the bill for tort reform. All I could find was this:

Nothing in this section shall be construed to expand medical malpractice liability protection under the Federal Tort Claims Act for Section 330-funded Federally qualified health centers.

[RevDisk]

that's certainly part of the reason - but the combination of private and public expenditures here is still far below what it is in the United States.  The actual prices for all services are higher there, which means that they are not as efficiently delivered.

Is the US subsidizing the drug prices there? 

That's one thing that never gets press.  Most of the countries with public healthcare uses price controls on their drugs.  US doesn't.  Ergo, US ends up covering the bulk of the tab. 

[Headless Thompson Gunner]

It's not just drug prices that are subsidized by Americans, it's all sorts of medical R&D and discovery costs.

It's an awful lot cheaper to deliver treatments when you don't have to pay the costs of discovering the treatments yourself.  Much cheaper to just read it out of a journal than to go through the expenses of discovering these things yourself.

I would say that this is a prime opportunity for Atlas to shrug, but that would lead to people dying needlessly.

[AZRedhawk44]

Obama did an interview with ABC recently...

There's a threat of jail time if you don't get Fed health insurance.

Obama compares it to auto insurance (which is obviously dumb since you can just choose to not drive).

-14:20 in this video is where this issue comes up.

 

http://blogs.abcnews.com/politicalpunch/2009/11/interview-with-the-president-jail-time-for-those-without-health-care-insurance.html

[De Selby]

Is the US subsidizing the drug prices there? 

That's one thing that never gets press.  Most of the countries with public healthcare uses price controls on their drugs.  US doesn't.  Ergo, US ends up covering the bulk of the tab. 

It isn't a subsidy to bargain for a lower price, which the Government here does - yet drug companies choose to sell the drugs anyway, because they still make a profit. 

The US could bargain prices for its purchases too, but it's prohibited by law from doing so.  The higher prices are not a "subsidy", they are the result of little or no bargaining power on the part of most drug consumers.

[makattak]

It isn't a subsidy to bargain for a lower price, which the Government here does - yet drug companies choose to sell the drugs anyway, because they still make a profit. 

The US could bargain prices for its purchases too, but it's prohibited by law from doing so.  The higher prices are not a "subsidy", they are the result of little or no bargaining power on the part of most drug consumers.

>.<

Yep, it's "bargaining" when you tell them that you either sell us this drug at a very low price or we'll ignore your patent and make it ourselves.

It's sort of like a mugger "bargaining" with you: "Your money or your life!"

You have a choice! YAY!

[RevDisk]

It isn't a subsidy to bargain for a lower price, which the Government here does - yet drug companies choose to sell the drugs anyway, because they still make a profit. 

The US could bargain prices for its purchases too, but it's prohibited by law from doing so.  The higher prices are not a "subsidy", they are the result of little or no bargaining power on the part of most drug consumers.

Sigh...  Yes, it is a subsidy.  Just not a direct payment one.  This is what is called an "uneven playing field".  Companies have somewhat fixed costs.  Production equipment, R&D, overhead (IT people, finance, etc), etc.  The material cost of making a pill is stupid cheap.  The infrastructure to MAKE the pill is stupid expensive.  Any country engaged in price-fixing drugs engages in logical fallacy and says "It costs you TWO CENTS to make this pill.  We'll be insanely generous and allow you to sell it at 50 cents per."  (They're generally not actually that stupid, but that's what they publicly claim.)  Reality is, they know companies would rather make a little profit instead of no profit (and usually more importantly, it ups the revenue they can claim) and they knew the drug companies can 'overprice' the US drugs to pay for the infrastructure costs.

Don't get me wrong.  Any company probably has inefficiencies.  You could claim that drug companies waste too much money on some internal factor.  Might even be right.  Management fads are supposed to identify and remove these, but oddly rarely do.  But yea, drug companies are forced to make the US pay for the bulk of these ancillary costs, or stop selling drugs to socialist countries, or stop R&D/testing/development.  I'm sure if the majority of the drug companies stopped selling to said countries, they wouldn't face a PR campaign "zOMG!   merchants of death!  Refusing to sell medicine CUZ THEY'RE GREEDY CAPITALISTS!" or whatnot.  Or simply called racists or whatnot.  Ask companies that are more or less blackmailed into providing AIDS drugs to be sent to Africa, which often never actually reach the intended sick folks, at below market rates.  It's a subsidy.

As expensive as drugs are, they're stupid cheap in the long run compared to surgery or death.  I should actually thank the socialist countries for price-fixing.  It killed the European pharmacology, and led to a significant boom in US pharmacology.  One of the few manufacturing industries were America is kicking tail and taking names.  I'm aware of two posters here that did/are working for such companies, they could probably explain better than I could. 

[Monkeyleg]

I wonder what will happen to new drug development if the health care legislation effectively caps what pharmaceutical companies can charge.

If the US ever cuts into those companies' profits, the other countries that "bargain" for their drugs are going to be in a world of hurt.

[Ben]

Here's the other thing that irks me about all this. As linked below (yeah, I know CNS, but the quotes are valid), the dems continually refuse to accept the public option insurance themselves. Why is there not more public outrage or concern over this? It should be pretty obvious that if the backers of the legislation want nothing to do with it, that it's a bad deal. Conversely, what better selling point about how great this is for America, than the Administration and the entire Congress signing up for it? Put your money where your mouth is...

-------------------------
http://www.cnsnews.com/news/article/56897

Critics of the health care bill said they offered the 11 amendments – including some that would require the president, vice president, and Supreme Court justices to give up their Federal Employees Health Benefit Program (FEHBP) to enroll in the ‘public option’ or Medicaid – to showcase the problems with the massive legislation.
 
“If Congress forces our constituents into a public option plan over time, then members of Congress should be expected to do the same,” Rep. Howard McKeon (R-Calif.) told CNSNews.com.

[DittoHead]

Yep, it's "bargaining" when you tell them that you either sell us this drug at a very low price or we'll ignore your patent and make it ourselves.

I've heard this before but I don't really understand it. I'm hoping you (or someone) could explain this a little further. Why does this bargaining technique apply only to drugs and not every product/industry? If they really have the option of ignoring patents (I'm assuming because no one will actually enforce it) why not do so and save even more money? What countries use this bargaining tactic and how do we know that they do?

[Monkeyleg]

I've heard this before but I don't really understand it. I'm hoping you (or someone) could explain this a little further. Why does this bargaining technique apply only to drugs and not every product/industry? If they really have the option of ignoring patents (I'm assuming because no one will actually enforce it) why not do so and save even more money? What countries use this bargaining tactic and how do we know that they do?

Just taking a shot in the dark, I'm guessing that we don't really have a way to retaliate if other countries don't have pharmaceutical companies on the scale that we do. If they started ignoring patents on cars, then we could retaliate by making Mercedes, BMW's, Jaguars, Renaults, and other cars here. (Well, maybe not Renaults).

[dogmush]

I've heard this before but I don't really understand it. I'm hoping you (or someone) could explain this a little further. Why does this bargaining technique apply only to drugs and not every product/industry? If they really have the option of ignoring patents (I'm assuming because no one will actually enforce it) why not do so and save even more money? What countries use this bargaining tactic and how do we know that they do?

Are you familiar with China?  They seem to play fast and loose with patent law just about anywhere they think they can make a Yuan.

[RevDisk]

I've heard this before but I don't really understand it. I'm hoping you (or someone) could explain this a little further. Why does this bargaining technique apply only to drugs and not every product/industry? If they really have the option of ignoring patents (I'm assuming because no one will actually enforce it) why not do so and save even more money? What countries use this bargaining tactic and how do we know that they do?

Because not every country has a significantly advanced pharm industry.  Also, good luck selling products back to America, getting investment money from the US, getting other American companies to sell to you, etc. 

I've rarely heard of countries threatening to "invalidate" US patents.  For drugs, it's nearly always "Sell to us at X or you don't get to sell us any drugs period, and we will blame you for refusing to knuckle under."  Folks ignore patents all the time.  Not just China, either.  It's up to the patent owner to enforce their patents.

[sanglant]

Just taking a shot in the dark, I'm guessing that we don't really have a way to retaliate if other countries don't have pharmaceutical companies on the scale that we do. If they started ignoring patents on cars, then we could retaliate by making Mercedes, BMW's, Jaguars, Renaults, and other cars here. (Well, maybe not Renaults).

and that is what we need to do, if you don't respect our drug patents, we don't respect ANY of your countries patents, or copyrights

man what a run on

[Monkeyleg]

Hmmm. An American gun company could really expand its business by building exact HK copies. It would be nice to see $900 HK91's again.

[Boomhauer]

An American gun company could really expand its business by building exact HK copies.

I'm going to amend that to exact, quality HK copies.

[Headless Thompson Gunner]

I've heard this before but I don't really understand it. I'm hoping you (or someone) could explain this a little further. Why does this bargaining technique apply only to drugs and not every product/industry? If they really have the option of ignoring patents (I'm assuming because no one will actually enforce it) why not do so and save even more money? What countries use this bargaining tactic and how do we know that they do?

Because when they do this "bargaining" they prevent the company that developed the drug from recouping the costs of development.  

Developing new medications is terribly expensive.  It costs hundreds of millions of dollars.  Those development costs have to be divided up and spread out over each pill they sell, which makes the pills more expensive than just the cost of the raw materials that go into producing them.

Countries like Australia and Canada force the drug makers to sell the drugs at raw-material cost, which makes it impossible for the manufacturers to recoup any of the development costs from these sales.  This means that the only chance the manufacturers have of breaking even on any given medication is to overcharge the American consumers to make up for the fact that they're forced to undercharge foreign consumers.  It's a great deal if you're Canada and Australia.  Not such a deal if you're America.

The interesting thing is going to be when American starts pulling the same obscene stunt.  Once the drug companies lose the US as a market as a place where they can try to break even on development, they'll have no choice but to stop all new development.  It's either that, or go broke and disappear.  the money has to come from somewhere, ya know.

The state of the medical art would freeze.  Hooray for socialized medicine!

[Gewehr98]

Hmmm. An American gun company could really expand its business by building exact HK copies. It would be nice to see $900 HK91's again.

I'd have to echo Avenger's sentiment.

Google "Todd Bailey" or "Special Weapons, LLC" for an example of how not to build HK copies.  

[Boomhauer]

I'd have to echo Avenger's sentiment.

Google "Todd Bailey" or "Special Weapons, LLC" for an example of how not to build HK copies.   

That's the guy I had in mind when I added "quality".

He has changed the name of his company many times...and is pretty sue happy, from what I hear...

[Gewehr98]

He's sue happy, but also getting a lot of lawsuits on the receiving end, too.