03/23/2010 12:44:12 AM EST

$138 Billion in Savings Over 10 Years is Worthless

posted by EveningStarNM

As Ana reported on the show today, the health care legislation currently before Congress is expected to save us $138 billion over ten years.

We spend $2.5 trillion per year on health care, making our savings over ten years equal to 0.55% of what we spend.

Does anyone not understand that calling that "savings" is complete and utter bullshit?

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< Fact Sheet: Myths and the Truth About The Health Care Bill | Really - the Health Reform Bill Is Good >
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$138 Billion in Savings Over 10 Years is Worthless | 29 comments (29 topical, 0 hidden)
This isn't a deficit bill, it's a health care bill (none / 0)

The point was for the bill to pay for itself.  That is, be neutral towards the deficit.  This isn't a deficit reduction bill.  It's a universal health care bill. 

Democrats achieved the goal of paying for the bill with a little room to spare.  The $1.2 trillion we will save between 2019 and 2029 if the bill passes is equally small, but again:  that's not the point.

by publius on 03/18/2010 08:31:06 PM EST

Millions Still Uninsured (none / 0)

I know we disagree on this bill, but let's at least agree with Brian Unger and not refer to it as a 'universal healthcare bill'.

You can make some reasonable arguments on what it is, but it's not 'universal healthcare'.

by Tom Hanc on 03/18/2010 08:35:09 PM EST

[ Parent ]
Well, To Be Fair (none / 0)
over 95% of Americans would be covered which is about the same as France's Health Care System (which is what many think is the world's best system).

My website: History By Day
Follow my on twitter @historyday.

by HistoryByDay on 03/18/2010 08:52:04 PM EST

[ Parent ]
France (none / 0)

Damn right about France, but we shouldn't even bring them into the discussion! A mandate for single payer vs. a mandate for private insurance couldn't be more different.

But we've already covered that.

by Tom Hanc on 03/18/2010 09:39:19 PM EST

[ Parent ]
My Point Is (none / 0)
just that is that France's system is generally considered as 'universal healthcare' tho they don't cover everyone - the same as this bill in that specific regard.

My website: History By Day
Follow my on twitter @historyday.

by HistoryByDay on 03/18/2010 09:55:37 PM EST

[ Parent ]
Please (none / 0)
This bill can't hold a candle to the French system.

by Alloy on 03/18/2010 09:48:47 PM EST

[ Parent ]
maybe (none / 0)

I don't think the 95% figure is quite accurate. Wikipedia says 95% but http://prescriptions.blogs. nytimes.com/2009/09/11/heal th-care-abroad-france/?page mode=print
Says over 99%
http://www.nyu.edu/projects /rodwin/french.html
Again, over 99%
http://healthcare.change.or g/blog/view/5_questions_abo ut_french_health_care
The Healing of America by T.R. Reid (p.53)says the last 1% received coverage in 2000.
And 92% of french also have private plans as well, so they are basically covered twice for half the cost of here and their waiting times are about the same as ours. Just imagine if France spent the same amount we do, but with their system. It'd be a medical Utopia.

by jhufford on 03/18/2010 10:10:50 PM EST

[ Parent ]
oops (none / 0)
should have proofread, the third link says 99%.

by jhufford on 03/18/2010 10:15:17 PM EST

[ Parent ]
Insurance reform (none / 0)

I am completely fine calling this a "health insurance reform" bill.  I agree with Brian Unger on this.  It is not a "health care reform" bill.  That would require many more reforms

But these reforms of the insurance market result in a Universal Health Care System.  The system isn't a public one, but one run by private insurance companies.   Never the less, it is very very very close to universal coverage.  It is the system proposed by Clinton, Edwards and Obama.

by publius on 03/19/2010 08:50:16 PM EST

[ Parent ]
Hah (none / 0)
The $1.2 trillion we will save between 2019 and 2029...

We won't save anything.


If you think health care is expensive now, wait until you see what it costs when it's "free."

by TheArtistFormerlyKnownAsTwba on 03/31/2010 12:18:45 PM EST

[ Parent ]
The Decade Trick (none / 0)

Republicans use it to scare the shit out of people with the appearance of inflated cost. Now the Democrats are using it to wow people into thinking the cost savings is significant.

Imagine if I wanted to talk you out of renting an apartment in LA, and I told you the rent would be $140,000*!

 

*Over 10 years.

by Tom Hanc on 03/18/2010 08:33:22 PM EST

are you kidding? (none / 0)
EveningStarNM - you did the math wrong.  $138 billion is 5.5% of $2.5 trillion.

5.5% is not amazing, but it isn't trivial either.  5.5% of the salary of an average American is $2,000.  I think most people would be pleased to save $2,000 a year.

And while of course this is pretty speculative, CBO estimates that the bill will save $600 billion in the second 10 years.  That's 25% savings.

EveningStarNM - the arguments you make on these boards seem to come from a conclusion.  You've made up your mind and you make whatever arguments you think of to support that conclusion.

But maybe you should be open to the possibility that you might be wrong.  If the facts don't support your initial conclusion, maybe you should change your conclusion?  Everyone feels right, even when they're actually wrong.  Maybe I'm the wrong one here, but you need to see that most of your arguments are pretty unconvincing as matters of empirical fact.

by dotkommissar on 03/18/2010 09:25:09 PM EST

Actually, you didn't read the problem correctly. (none / 0)
But you shouldn't be ashamed of your mistake.  A lot of people get the word problems wrong.

$138 billion over ten years.

$2.5 trillion per year for 10 years is $25 trillion.

$138 billion / $25 trillion = ...?

I leave the calculation as an exercise for the student.

by EveningStarNM on 03/18/2010 09:38:44 PM EST

[ Parent ]
two different numbers (none / 0)
I could be wrong on this, but when the CBO talks about saving $138 billion they are talking about the federal government. That's all the CBO cares about.

When EveningStar refers to the $2.5 trillion we spend on healthcare, he's talking about the entire country all together, government and individuals and business, I guess. So the two numbers don't even belong in the same discussion.

Furthermore, I dismiss all of these projections.  They strike me as wildly inaccurate. I also believe  that it's dumb for the government to pay subsidies so people can buy health insurance from a for profit health insurance company.  It's so dumb it almost hurts my head. For that matter, isn't the same convoluted system what Obama wants to simplify in the student loan business?  (Yes, the answer is yes, he does want to simplify that system in which the Fed Govt shovels money over to banks which provide the loans, instead of just providing the loans directly.)  So if he wants to clean up that mess, why create another mess in health care insurance?

David

by yturks on 03/18/2010 09:38:20 PM EST

The $2.5 trillion is the problem (none / 0)
We spend more for our health care than any other industrialized country.  Part of the reason that we can't insure everyone is because of our astronomical costs.  And with insurance companies raising there rates as much as 43% just this year, we will soon be spending the bulk of our national income on health care.

The problem is the total that we spend.  Anything that doesn't attack that problem is worse than a waste of time.  We're going broke, and our health care expenses are a large part of the problem.

by EveningStarNM on 03/18/2010 09:42:52 PM EST

[ Parent ]
That's the crux of the issue (none / 0)

A mandate for private insurance vs. a mandate for a single payer type system are two completely different things.

Another general issue that few are discussing is why anyone is confident that we're going to strongly enforce the new regulations on the private insurance industry and or that the industry won't find severe loopholes. And of course it's entirely possible that (as I've pointed out) when Republicans inevitably regain power (possibly directly because of this legislation in some ways) they'll exploit flaws in the system to further weaken regulations and gut the subsidies that mask inevitable price increases. And don't forget that it's not just about insurance premiums, it's also about co-pays, deductibles and drug costs. Just one loophole in one area can royally screw us.

Yes, I realize that technically that's possible with any reform, but it's specifically relevant in this case because the proposed reform is so damn weak and because it ultimately strengthens the private, for-profit system. That means it should be especially easy to take a mediocre system and make it downright horrifying in a relatively short period of time.

I know it's possible that might not happen, but of course the industry lobbyists are going to be fighting for that the DAY after the bill passes, especially with elections coming up.

by Tom Hanc on 03/18/2010 09:49:31 PM EST

[ Parent ]
A difference (none / 0)
One difference between a single payer system and a system that includes a mandate to buy private insurance is that the federal government has the actual authority to institute the former whereas it does not have, by any fair reading of the Constitution, the authority to institute the latter. A mandate to buy private insurance, I believe, can only be constitutionally supported by the interstate commerce clause but the argument that that clause provides the authority is, to borrow a term, weak sauce. The constitution clearly authorizes the federal government to impose taxes to promote the general welfare, however, so I believe there is no constitutional problem with a single payer system. To me, the distinction is important. To the extent the government acts beyond its legitimate authority, it is a government of men and not laws.

by Corpusless on 03/19/2010 07:18:45 PM EST

[ Parent ]
Do (none / 0)
you know a way to get single-payer passed?

Every liberal/progressive in Congress (Senate and House) is already voting Yes for this bill, so how exactly would we get votes from Conservatives for Single-Payer?

My website: History By Day
Follow my on twitter @historyday.

by HistoryByDay on 03/18/2010 10:00:54 PM EST

[ Parent ]
You're right (none / 0)

No way in hell we could pass single payer. BUT *if* they had started with Single Payer I think right now they'd be voting yes on a Medicare-buy-in, in which case I and many others would be much more enthusiastic about the bill.

And before you ask the next question my answer would be that I'd hope that if the current bill dies (it won't) that a Medicare-buy-in would pass within the next several years as more and more pressure for a real solution comes down from the public as they realize the system is broken.

by Tom Hanc on 03/18/2010 10:06:54 PM EST

[ Parent ]
power to the people (none / 0)
You make the case to the people. When you get the people on your side, the politicians will come next.

David

by yturks on 03/18/2010 10:14:12 PM EST

[ Parent ]
There are no savings (none / 0)
The CBO projects that the 500 billion cuts to medicare will offset the costs.  What do you think is going to happen?  That 500 billion is going away, it is simply shifted to the private sector.  Everybody's health insurance is going to go up 500/2500 = 20%.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 03/18/2010 10:24:42 PM EST

Agrees with David.... (none / 0)
You have to get the people educated and in favor of single payer, to the point where a majority will demand it from those who make the laws.

Most people don't even know what single payer means, or they only know it as a frightening "government takeover" of health care.  That's why I believe in being an activist for a single payer system.  Once people are made to understand all the good it would do: streamlined lower costs, coverage and care for everyone within a non-profit system, and having a non-profit insurance agency that emphasizes prevention and wellness. 

And it would be such a boon to our economy for businesses to be free from the burden of paying for health insurance.  Instead they would pay a tax toward the public program, and that would cost them much less than paying private insurance premiums.

And yes, it does seem rather moronic for the government to subsidize private insurance that wastes 30% our dollars on things other than paying for care when it could just expand Medicare for all with its 5% overhead and high customer satisfaction.

by pattilyn on 03/19/2010 12:11:19 AM EST

ugh (none / 0)
My previous comment couldn't have been more hypocritical.  I did miss the units on that math problem, but in my defense I knew there was no way the government spent $2.5 trillion annually on healthcare, so I just assumed you'd meant 10 years.

I think perhaps no one has actually described the endgame of this health care bill.  Despite the justified skepticism that it'll ever make it far enough, I'll take a stab at it.  This is the capitalism alternative to socialized health care.  It's school vouchers, but if all the schools competing for the vouchers were regulated nationally.

The idea is to construct a fair marketplace where different insurance plans can compete for customers while pooling the risk across all the plans in the entire marketplace.  This way if all the sick people go with plan A and the healthy ones go with plan B, the rules of the marketplace would require all plans to contribute to a pool of funds that is used by HHS to offset cost discrepancies that would otherwise bring down the plan with the disproportionate amount of risk.

All the plans must meet basic federal requirements to protect consumers and regulate costs and ensure that every plan covers essential elements that should be a part of every insurance plan.

Then the states have the freedom to add their own rules or tweak the federal ones within certain ranges.

I agree that this may crash and burn terribly.  There are so many ways that it can fail, and our government isn't inspiring much trust right now.  But it's an experiment.  It's innovative.  It doesn't end the private v. public debate, it lets both compete.

That's what I wanted from the public option.  I wanted it to show America that the government plan could offer better care at lower prices - that it was superior to the private market.  That's what the exchanges do, but on a playing field that is much more even.  

I spoke to staffers of some Democratic Senators who argued against the public option because they had yet to hear how it would actually compete fairly with private insurance - the rules would have to be different to adjust for it's much higher risk pool.  The public option would benefit from all the subsidies while private plans would continue to get the tax breaks they currently enjoy.  If private plans were only state-by-state, but the public option could operate nationally, it would have superior negotiating power.  It would have a marketing advantage, being officially endorsed by the government.  And it wasn't entirely unreasonable for people to claim that if the public option started failing, it would get bailouts from Congress because it would be political suicide to let it go belly-up.

The point is, too many people disagreed about how to create a public option that really would compete on an even playing field with private insurers.  Right now you're thinking, "fuck them, let them go out of business."  But a lot of people really believe that the best solution really is to regulate the private insurers but continue to keep health insurance private.

That's why the exchange is a fascinating and hopeful prospect.  It is the best way to allow public and private, for profit and nonprofit plans to compete in a state and eventually national marketplace, while neutralizing the advantages caused by subsidies, unevenly distributed risk, and disparate political protections.

Perhaps this will fail, or never even get properly started.  But I admire the attempt to create an American solution to health insurance instead of simply adopting single payer.  Once we go single payer we'll never have the political will to experiment with something like this.

by dotkommissar on 03/19/2010 01:48:54 AM EST

The math wasn't your only mistake. (none / 0)
Health care is a public utility, something that everyone needs.  Our national bill for it is ~$2.5 trillion per year.  Whether we pay for it through our government or through insurance premiums or direct payments would be irrelevant if any private financing method was as efficient as public financing.  We have to pay for our health care one way or the other, and no citizen deserves better or more health care than another.

The only question is which method of paying for our health care costs us less and gives us the most for our money?  Private insurance premiums, direct individual payments, or government finance?

Obviously, the latter method is the best.  Public utilities should never be privately financed.  That's Econ 101.

by EveningStarNM on 03/19/2010 06:40:23 AM EST

[ Parent ]
oh please (none / 0)
Whether you like it or not, you live in a country where the majority of people believe that competition gives rise to innovation.

The problem with the private sector is that there are legal methods of increasing profits and successfully competing other than innovating and providing the best service/product.

It's much easier to capture a regulatory agency, or find a way to breach contracts under the pretense of fraud, or benefit from perpetual antitrust exemption that allows you to price gauge your customers.

If all of those things were illegal and the laws enforced, corporations would have no choice but to compete on the value of their product/service.

If this were so, it might be a good thing to keep the health sector private, competing and innovating better and more cost effective methods.

In advocating for public health care, you presume that the cabinet members appointed to administer the program will be motivated to continue to improve upon the status quo.  Perhaps they would.  

But it's also likely that, as with other publicly administered programs like schools, there won't be enough will to improve on a system that "works" well enough already.

As for financing, I'm all for public financing of health care.  But when it comes to the administration, I'm not sure what I think.  Either way I have to rely on the government, either to regulate the private sector or run the program themselves.  If this were a country of well educated, sensible people who elected thoughtful, hardworking, honest representatives, I'd be 100% for public administration.  But as it is now, I think it might be nice to keep politics away from health care.

by dotkommissar on 03/19/2010 07:39:56 AM EST

[ Parent ]
I don't care what people believe. (none / 0)
I care what they can prove is true.  People believe all sorts of crazy things, like climate change is nothing to worry about, or that this health care legislation will be good for our country.

Health care is a public utility.  Public utilities should never be financed privately because corruption and extreme overpricing always dominate them when they are.

by EveningStarNM on 03/19/2010 09:18:32 AM EST

[ Parent ]
Utilitarian (none / 0)
Health care is a public utility...

No, it is not. We award a monopoly to a single heavily regulated water company because it would be prohibitively expensive and mighty inconvenient to have the streets dug up and pipes buried three or four times so we could have competition between water companies. Hospitals and insurance companies don't dig up the street to pipe health care to my house.


If you think health care is expensive now, wait until you see what it costs when it's "free."

by TheArtistFormerlyKnownAsTwba on 03/31/2010 12:17:25 PM EST

[ Parent ]
If fox wanted a single payer system (none / 0)
They would get it.

by Smokin on 03/19/2010 12:42:55 PM EST

Dingdingdingdingdingdingding! (none / 0)

Bingo!

by EveningStarNM on 03/19/2010 03:52:44 PM EST

[ Parent ]
$138 Billion in Savings Over 10 Years is Worthless | 29 comments (29 topical, 0 hidden)
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