Why do People Hate Obamacare?

[temporal1]

No for-profit company would be allowed this level of waste and extravagance.
And what Appleman mentions is just the tip of the iceberg. We had an air ambulance system that was government sponsored/supported/mandated and the waste there was astronomical.
But the people of Ontario continue to re-elect the government that is responsible for this waste.
The same type of situations apply in other government agencies outside of healthcare.
A for-profit company could make an obscene profit and yet be more economical for the people than our government run programs.

one incredulous reality is how people keep voting for it!
people actually vote for the loss of their own rights+freedoms, and increased taxes.
it's one thing for over reaching governments to oppress and force losses - but, what can be done when people vote for it, themselves?! it's actually bizarre. you could not make this up.

regarding government waste.
when obama was early in his first term, beginning to sell obamacare, i recall hearing him state that much of the cost could be covered - by ending waste+fraud in the Medicare system.
i heard him speak of this once, never again. i believe max's wife heard the same statement.

he had my attention - who doesn't want an end to gov waste?
in the following silence, i have supposed "they" quickly figured out, for government to go after gov waste would be spectacularly expensive - and, unlikely a fruitful endeavor. government's SOP.

[appleman2006]

It seems to me that health insurance companies are carrying on two different businesses when they collect your premiums:

1) As insurers
2) as resellers of medical services.

How this would work is that your premium is set not only according to your anticipated health needs, but also according to the anticipated cost of meeting those needs at a certain standard cost. However once having set the premium, the insurance company is free to negotiate a bulk discount from the health care provider which then adds to its profit. It ends up buying those services cheap and "selling" them high by way of policies which are rated at higher standard price levels. This especially applies in a local market where there are only a few insurance companies operating (which seems to be most states nowadays). In an increasing number of cases you end up with something close to a monopsony (a situation where there is only one buyer).

But the deeper the discount which the insurance company negotiates as part of its second line of business, the higher the provider needs to set its standard cost for everyone else to compensate (which sets up a feedback loop which affects the policies based on those standard costs) .I suspect that this second business carried on by insurance companies is what drives most price inflation for medical services in the US.

One partial solution might be to move from 50 separate state markets to a nationwide market, which though a no brainer economically seems to be politically impossible.

Another might be for the government to enter the medical services reseller business itself to provide an element of competition where there otherwise would be none. It could do this by allowing a Medicare buy in whereby people not otherwise eligible for Medicare coverage could purchase medical services at Medicare rates through the Medicare network either by paying cash or by referring the charges to a private health insurance plan which sets its premiums according to those rates with low or no mark up. This would create a new market for health insurance which operates as a pure insurance policy - something which currently does not exist.

I know that the entry of a large number of new users which this innovation would entail would stress the existing Medicare providers network, but the withdrawal of the same number of users from the conventional health care market would make it more competitive and induce more providers to pick up Medicare business to supplement their lost market share. In the end the providers will follow the market.

An added feature might be to provide for personal health care savings plans, the contributions to which would enjoy the same tax deductions as a 401(k) and the unused portion of which would be available for retirement at age 65. Although if I'm not mistaken, a 401(k) itself could be used as a health care savings plan under current hardship provisions, though it's not set up for that.

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Some incredible ideas there. I think at least
I am wondering if you have any good ideas to fix our system in Ontario as well.

[Bootstrap]

For bigger, sweeping, long-term reforms, I think the best thing in the long run would be to end the system of employer-provided health care, which creates a bunch of perverse incentives that encourage unnecessary procedures with no incentive to control costs.

I agree with this. Why put the burden on the employer?

But I don't want single payer - that has its own problems, and I don't like socialism; I think it will not be good in the long run either. At least not national single-payer, like the Canadian and British systems. The best single-payer systems are in Sweden and Denmark, but those systems are run mostly by the local governments. Some of the best health care systems overall are Switzerland and Singapore; they have individual markets where everyone buys their own health care. I think we really need to develop a plan modeled after their systems.

The Singapore public healthcare system is a single-payer system, though it allows private medical care on top of it. It has some nice incentives built in - you have to pay for healthcare, what you pay depends on your income. It's like an HSA where funds accumulate if you don't use it, and you can build up quite a bit of money over time. You always have to pay part of the price, so you know that healthcare isn't free. It's built on compulsory savings, subsidies, and price controls.

[Bootstrap]

One partial solution might be to move from 50 separate state markets to a nationwide market, which though a no brainer economically seems to be politically impossible.

Another might be for the government to enter the medical services reseller business itself to provide an element of competition where there otherwise would be none. It could do this by allowing a Medicare buy in whereby people not otherwise eligible for Medicare coverage could purchase medical services at Medicare rates through the Medicare network either by paying cash or by referring the charges to a private health insurance plan which sets its premiums according to those rates with low or no mark up. This would create a new market for health insurance which operates as a pure insurance policy - something which currently does not exist.

I know that the entry of a large number of new users which this innovation would entail would stress the existing Medicare providers network, but the withdrawal of the same number of users from the conventional health care market would make it more competitive and induce more providers to pick up Medicare business to supplement their lost market share. In the end the providers will follow the market.

An added feature might be to provide for personal health care savings plans, the contributions to which would enjoy the same tax deductions as a 401(k) and the unused portion of which would be available for retirement at age 65. Although if I'm not mistaken, a 401(k) itself could be used as a health care savings plan under current hardship provisions, though it's not set up for that.

I agree with all of this.

[Bootstrap]

Can't complain about money if we're not willing to do anything to confront the cost side of the equation.

Nothing's going to get better until we as a people agree on how to control costs.

And telling private industry what they are allowed to charge for their products or services will have what effects?

Consider the alternative: If a company produces a life-saving drug, it can charge whatever it thinks you will pay to save your life. And the tax-payer winds up paying for most of that. Very little of healthcare operates in a free market, so costs aren't managed by normal free-market mechanisms.

This is what we do with regulated industries, and utility companies are doing just fine. This is what the rest of the world does with medical care.

[Josh]

Health care isn't a fee market at all, starting with how Medicare sets its pricing structure.

[appleman2006]

Actually bootstrap not quite. Even in our extremely socialized system here in Canada there are lots of steps where the market still decides what gets paid out. And I think that is part of the problem. In some areas we really try to control costs by arbitrarily setting prices while in others we seemingly have no control over. Or perhaps it is because of government ineptness and lack of political will that they choose not to control certain areas.
Here are some examples.
1. Labour costs. (Very powerful unions have made sure that health practitioner labour rates have risen at a rate that is much higher than the average person out there not to mention many of the other benefits that are attached.)
2. Drug costs. Again I am not sure if you took the free market component out of this whether nearly as much research would actually get done.
3. Over all capital costs of building health facilities and equipment. This is one that really falls by the wayside when government is involved. Initial costs as well as overruns simply go way off the rails.

I know some would argue that in fact were we to totally socialize our whole system it would actually work better. I of course disagree. It would simply mean the money would run out even faster.

[appleman2006]

Health care isn't a fee market at all, starting with how Medicare sets its pricing structure.

It might actually be a fee market. I am assuming you meant free market.

[Dan Z]

Can't complain about money if we're not willing to do anything to confront the cost side of the equation.

Nothing's going to get better until we as a people agree on how to control costs.

And telling private industry what they are allowed to charge for their products or services will have what effects?

Consider the alternative: If a company produces a life-saving drug, it can charge whatever it thinks you will pay to save your life. And the tax-payer winds up paying for most of that. Very little of healthcare operates in a free market, so costs aren't managed by normal free-market mechanisms.

This is what we do with regulated industries, and utility companies are doing just fine. This is what the rest of the world does with medical care.

I agree...healthcare is a unique market that needs to be regulated to some degree. It does not exist under normal supply & demand free-market conditions.

Drug patents on the supply side give almost unlimited monopolistic price power to pharmaceutical companies...and medical conditions on the demand side often make the purchase of patented drugs a unavoidable necessity - taking away the consumer's ability to choose. Unregulated, it is a recipe for gouging - and I believe that is much of what has been driving the unreasonable costs in this country. There needs to be some watchdog control placed into the system to keep a lid on unrestrained profiteering.

[appleman2006]

I would argue that if you totally regulated it and turned it over entirely to the government (drug research that is) that the wastefulness would far out way any of the so called gouging of today. But that is jus my opinion although I think based on most government's track records I think it is a good one.