rickyp wrote:Where every other country allows the insurance administration in national systems to negotiate and bargain for lower prices

I am sorry but what happens is not negotiation or bargaining. When the government says this is what you will charge or you will not get paid, it is called take it or leave it. There is no negotation involved. It is mandated pricing or price fixing.

The federal government regulates prices of patented pharmaceutical products
with the objective of protecting consumers against excessive prices. Regulation has very likely been
responsible for bringing Canada’s prices for patented medicines roughly in line with European
comparators. Prices of generic products, which are not regulated, are relatively high although high
penetration of the Canadian market has been achieved. All Canadians have coverage for drugs provided in
hospitals through a publicly financed scheme that furnishes hospital and physician services free of charge
to patients. Drugs dispensed outside the hospital setting are not included among the insured benefits
guaranteed by the Canadian Health Act. Consequently, two-thirds of the Canadian population, including
most employees and their families, obtains such coverage through private health insurance, while most
senior citizens, together with designated groups of vulnerable populations, are covered by provincial,
territorial or federal plans. In most cases, patients share in the costs of reimbursed medicines through copayments
or co-insurance, sometimes after meeting a deductible. The lack of protection against the risk of
catastrophic out-of-pocket spending for drugs remains an issue for a small part of the Canadian population,
concentrated in the Atlantic Provinces. Reflecting these coverage and reimbursement arrangements, 54%
of drug expenditures are financed by private insurances and households. Drug expenditures have been
increasing very rapidly in recent years. Formulary management, now facilitated by a government initiative
to undertake common drug reviews, and the promotion of generic substitution have been the main levers
used by public plans to improve the efficiency of drug expenditures. Private plans have historically
covered all medicines authorised for sale in Canada, although this is changing in light of cost pressure.
Overall, new drugs are available in the Canadian market on a timely basis, but maintaining comprehensive
availability and accessibility may be an emerging challenge.
http://www.oecd.org/dataoecd/21/40/37868186.pdf

Okay, regulated. But then again it hasn't meant that pharma has left the country, or Europe,, in the lurch. And pharma had their patent periods lenghtened to protect from generic compeitors....
The point is that the prices are contained, drugs continue to be manufacture, and developed.
Its a reason that costs are held in check versus the runaway inflation in the US.
Is that runaway inflation due to efficient market competition?

Ray
Okay, but you are the one who said that medicare is an example of socialized medicine working. I just commented that it is not a good example. Now you are amending your original statement by saying that hypothetically if medicare was run well it would be a good example of socialized medicine working

First remember that the Kaiser Institute demonstrated that a dollar in the US medicare system delivers what takes $1.20 or so with private insurers... So, although it might not be socialized medicine without the regulations on pricing, it is still more efficient that private insurance in the US.
I'm comparing the socialized part of your system with the private.... That its not a great socialized system, in that it treats the service providers and pharma as entitled entities.... entitled to maximum profits... doesn't matter in the comparison. It does matter in that it also points to just about the only mechanism that seems to control medical costs anywhere in the world.
And do lets remember that US doctors like medicare patients. The administration of fee submissions is far less difficult and certain.

Medicare treats providers as entitled to maximum profits. Holy crap ricky put down the @#$! crack pipe. Medicare doesn't pay anything near the actual cost of providing services. I always remember a meeting I had with an association of EMS chiefs. The average cost of an ambulance run for ALS (Advanced lifesaving service) was about $1,000 per run. Medicare paid $350 and Medicaid paid $200.

As I have mentioned before, there are 3 hospitals that are about equidistant to my house. St Marys, Aria Lower Bucks and Lower Bucks. Lower Bucks predominately handles the poorer neighborhoods of Levittown, Bristol Township and Bristol Borough. A large number of their patients are Medicare/Medicaid patients. This hospital is always on the brink of bankruptcy because the M/M reimbursements do not cover the costs and the hospital does not have enough private insurance patients to make up the difference.

In my former position, I had more then one health care provider say M/M does not pay enough and if it went any lower they would be no longer accept M/M patients.

Archduke

In my former position, I had more then one health care provider say M/M does not pay enough and if it went any lower they would be no longer accept M/M patients.

(Why is it that Neal's doctor would only accept Medicare patients?)

Well, they would say this wouldn't they? And big Pharma would say that you can't regulate drug costs because they won't be able to operate.
And yet they haven't pulled out of the other countries where they face regulation or negotiation have they? (How many pharmaceutical companies are actually non-US Archduke? Swiss or English?)
The evidence says that in regulated health care economies the drug companies continue to operate, the ambulances continue to run (And in France are far superior to the US, as an aside) doctors continue to treat patients and hospitals continue to operate. All at reduced operating costs to the end user (tax payers and patients).
I know you like to get down into the weeds and debate the claims and counter claims of the operators in the US like the ambulances who claim $1000 per run.... But that's exactly the problem Archduke.
If its costing $1000 a run in the US and $400 in France for a better service how'd that happen?
Health care service providers have protected themselves from real competition effectively. There is no effective check on their demands for higher fees.... The market has failed.
If you want Medicare and the additional costs that patients pay to health care to stop from "bankrupting the nation" as Ray claims, don't you need to introduce proven systems that keep ambulances from costing $1000 per ride? If that ends up being the kinds of regulation and negotiation that the Netherlands and New Zealand and France and pretty much everybody else does .... why is that a problem? It works. And people in those nations generally are as free as Americans. More so, in that they aren't slaves to high medical or insurance costs.

rickyp wrote:The market has failed.

Question: If government efficiency and negotiating power is the key in this one area, why not across the board? Does the market always fail? If not, why is the healthcare and healthcare insurance market so different than every other market? Why is it that competition fails only in healthcare?

There must be some reason, Richard. Why is it that socialistic medicine is superior, but the market seems to be able to handle food, clothing, housing, etc.?

Please explain.

steve

Question: If government efficiency and negotiating power is the key in this one area, why not across the board? Does the market always fail? If not, why is the healthcare and healthcare insurance market so different than every other market? Why is it that competition fails only in healthcare?

There must be some reason, Richard. Why is it that socialistic medicine is superior, but the market seems to be able to handle food, clothing, housing, etc.?

The levers of supply and demand only work when demand is elastic. That is that consumers of the product or service can opt out of the market.
Health is one area where the choices are limited and where opting out of the market can mean death. Many consumers prefer not to select this option.
. Almost every other situation, even food, has natural elasticity. You have enough options that food prices, though they rise according to supply problems are always reactive to consumers choosing other food....for instance.
So, in almost every other situation a fee market provides enough elasticity that providers don't have the ability to command outsize control over price..
The supply of water in most cities in the US is regulated, isn't it? There is generally a private company or public utility providing water at a regulated price. Imagine if the water supplier had the ability to charge as much as he wanted regardless that a percentage of the market couldn't afford its connection to the system anymore?
The alternatives to water supply for washing, and consumption are limited and generally either difficult alternatives or really expensive.... And they would diminish the market demand for water consumption in such a limited fashion that no downward price pressure would occur. (Has the sale of bottled water for drinking ever affected the utlity enough to lower its rates?)

rickyp wrote:The levers of supply and demand only work when demand is elastic. That is that consumers of the product or service can opt out of the market.
Health is one area where the choices are limited and where opting out of the market can mean death. Many consumers prefer not to select this option.
. Almost every other situation, even food, has natural elasticity. You have enough options that food prices, though they rise according to supply problems are always reactive to consumers choosing other food....for instance.
So, in almost every other situation a fee market provides enough elasticity that providers don't have the ability to command outsize control over price..
The supply of water in most cities in the US is regulated, isn't it? There is generally a private company or public utility providing water at a regulated price. Imagine if the water supplier had the ability to charge as much as he wanted regardless that a percentage of the market couldn't afford its connection to the system anymore?
The alternatives to water supply for washing, and consumption are limited and generally either difficult alternatives or really expensive.... And they would diminish the market demand for water consumption in such a limited fashion that no downward price pressure would occur. (Has the sale of bottled water for drinking ever affected the utlity enough to lower its rates?)

Interesting analysis, Richard. Let's look at another example: communications.

When I grew up, there were two telephone companies. They didn't compete and each had its own area.

Now, most people opt to have a telephone because it can be, quite literally, a matter of life and death. So, why has the price gone down, since there was little elasticity (as you define it) in the market, after competition was encouraged and monopoly was abolished?

Now, most people opt to have a telephone because it can be, quite literally, a matter of life and death. So, why has the price gone down, since there was little elasticity (as you define it) in the market, after competition was encouraged and monopoly was abolished?

You're kidding right?
There's tons of elasticity in the communications market. And the elimination of the need to build the more expensive infrastructure of wired systems versus wireless has added to that.Indeed it revolutionized the communications world in Eastern Europe and Asia which lead North America substantially. (Here the old line companies had to protect their expensive infrastructrue investments) . Wireless competition took phones out of the "protected utlility category".
What do i mean by elasticity. Where everyone "needs a phone" at one time some had a home phone and a mobile. Many eliminated the home phone. Where communication service choices have sky rocketed and we now have phone, choice of long distance, Internet, VOIP, cable, telelvision ;
the numbers of competitors has increased. People jump into and out of service contracts all the time. Some people choose pay as you go...
Phones are a fine example where people's choices also include leaving cable for watching over only the Internet, Leaving phone companies for VOIP.... (all of this is now communications, and "phones" compete in that mileiu)

Compare all that choice with someone who is sick and needs to see a doctor.... Can he choose to do without that high blood pressure medication his doctor tells him is vital to keeping him alive? (The alternatives are a lot less attractive to consider for many people than which mobile provider has the best minutes package...)
Can he shop for a doctor who'll prescribe something else? Realistially a patient generally follows his doctors advice and deals with the financial consequences as best as they can...
.
You can see how someone deciding on communications is more powerful in his position as a consumer? You can describe his life or death decision to own a phone as that, but really its not going to affect his health if he decides to use a pay as you go over a blackberry...
By the way, fun fact, Ralph Nader has never owned a phone.

rickyp wrote:If its costing $1000 a run in the US and $400 in France for a better service how'd that happen?

Because it doesn't actually cost only $400 to run an ambulance in France. That is all the National Government has mandated they would pay for it. You know how we know this. The French healthcare system is running a $15 Billion deficit.

As a percentage of the budget, what is that deficit? I'd guess less than 10%. So perhaps a French ambulance should cost $440? That makes a 'massive' difference to the comparison, huh?

archduke

Because it doesn't actually cost only $400 to run an ambulance in France

What makes you think it actually costs $1100 to run an ambulance in the US other than that's the claim the ambulance industry makes - even though they accept the much much lower fee from Medicare.
Here's a hint, if the ambulance companies regularly accept runs when they are losing money, as opposed to refusing sevice and cutting back on unused capacity the way most for profit transportation companies deal with unprofitable capacity, - the odds are that they ARE making money from the Medicare runs.

By the way, I let you have the "regulated versus negotiated rates" point in order to move the conversation forward. But just to be clear, what you claim are fee by decree are indeed negotiated between the providers and the insurance schemes. The providers have to provide evidence of their expenses, costs and profit expectations whenever they request increases....And the regulators want to ensure that the supply of service continues to grow so they ensure that the service providers are happy...They don't want doctors quitting the profession. .It isn't some devious dictatorship of the state, its a collaboration designed to keep every one reasonably content. .
Sourced from Wikipedia:

Central negotiations (as in Japan, Germany, Canada and in France) or hybrid model (such as in Australia, France's sector 2, and New Zealand) where GPs can charge extra fees on top of standardized patient reimbursement rates.

Be that as it may, France does indeed run a deficit. Almost every country has been running into the problem of the aging populations and the higher use of medical services. Socialized countries the same as the US. But again the relative efficiency of the socialized countries is outstanding versus the so-called free market US system.
France has 3.4 physicians per 1000 people. The US 2.4 (The US has more nurses per capita)
France spends $3,601 per person on health care. The US $7,290
The French government spends 14% of its revenues on health care , the US government spends 18.5% of its revenues ... BUT France's govenrment accounts for 79% of all health care spending the US only 45%.

Tell me again why the deficit France is running makes it a worse system the the US?
source : http://en.wikipedia.org/wiki/Health_care_system

rickyp wrote:What makes you think it actually costs $1100 to run an ambulance in the US other than that's the claim the ambulance industry makes - even though they accept the much much lower fee from Medicare

Because I have seen the numbers. These are volunteer EMS services not for profits and as such are heavily subsidied by the state and local governments via grants and special volunteer firefighter/ambulance service allocations. I know this because one of the duties in my former job was to coordinate those kinds of things for all the services within the district. I can tell you that if the EMS's had to rely solely on what they receive as reimbursements for their runs, they would be out of business in a heart beat.

rickyp wrote:By the way, I let you have the "regulated versus negotiated rates" point in order to move the conversation forward. But just to be clear, what you claim are fee by decree are indeed negotiated between the providers and the insurance schemes. The providers have to provide evidence of their expenses, costs and profit expectations whenever they request increases.

And if the government regulator refuses to accept the increase? That is still not negotiation that is mandated price fixing with the occasional increase. You know who we know this. Experience has shown us that in Massachusetts when the insurance companies said they had to raise rates, the Insurance Commissioner said no. I believe the Secretary of HHS made a similar threat nationally late last year/ early this year as well.

rickyp wrote:Tell me again why the deficit France is running makes it a worse system the the US?
source : http://en.wikipedia.org/wiki/Health_care_system

I didn't say it made it a worse system. I just say it is not the wonderfully efficient system you make it out to be. If efficiency is the goal, wouldn't it be more efficient, instead of having government run a deficit paying for the health care, to leave it to the private market and set price controls. This way the government controls the cost but doesn't have to spend any money?

However, since you asked cancer survival rates are better in the US then France. When you use the same definition of live birth, the U.S. has a better infant mortality rate then France. While the avg life expectancy is higher in France (by about 4 yrs), the national death rate is lower in the U.S.

archduke

And if the government regulator refuses to accept the increase?

Ahh, well then you actually start to control runaway medical services inflation....

Which is the point of this arguement. How do you start to control costs?
In your free market system the providers seem to get any rate increase they want...and all that has meant is that your health services system is incredibly expensive.
Ray made the remark that "Medicare was socailism bankrupting the country". In fact its not, its actually runaway health services cost.
And its clear that socialism seems to actually control that inflation. Why? Becasue sometimes they say to the service providers "sorry, but you aren't getting that increase".
There appears to be no mechanism in the US that ever says that....and someone has to be able to say no. (In a free market, when no one is reasonably able to say no, and opt out, you lose the elasticity of demand that allows a free market to work. That ability to say no has to be put in place by regulation (or negotiated compromise) or you soon lose any control.
I know there are some specific areas of measurement where the health service in the US is delivered better than some socialist countries Archduke. Not many though considering the twice as expensive cost. For twice the expense shouldn't the results be staggeringly enhanced? And I grant you that the wealthy can get the best care in the world. But thats not the point. The point is, how do you avoid "bankrupting the country" in order to get health care provision. Continuing on with your current system is a sure fire route to bankruptcy. Moving to the French (or danish or dutch) systems will actually provide a system that controls costs....
And the original point of this conversation was about conservatism. A true fiscal conservative would assess the cost/benefit analysis and the delivery of care analysis, and the evidence of parts of the population who aren't receiving adequate care and say, "The hell with the stigma of the word socialist. This is better".
But conservatism in the US now necessarily entails the embrace of mindless labels that belie the cold clear use of evidence and depend upon the refutation of such in order to protect the myth that supports the label.' Conservatism, stopped being an intellectual pursuit in the 80's and became an exercise in faith based belief. How else to explain the reticence of so-called fiscal conservatives such as your self to actually embrace the known and proven postive results becasue it comes from a system that you've been taught to beleive doesn't work? The world is not flat.

(And before Someone jumps in with Obama care slagging, I'm not supportive of that effort, except that it is, by increments or marginal rates, better than the status quo.)

It would be helpful to understand how much health care innovation is coming from the US vs. how much is coming from these other countries. If the French system has lower costs but no internal innovation, it would not be a model I would endorse. How much innovation is squashed to control costs? I'd like to understand the trade-offs before opining that one system is better or worse than the other.