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Tag Archives: rising health care costs

The health care system is seriously flawed in this country and getting worse.  Many in Congress, especially those within the GOP/TeaParty, want to do more of the same that has created this quagmire.  Clearer thinking about what’s involved with a government-funded single payer program could help alleviate the concern many have about their increasing medical expenses.

The main argument being touted by those who oppose single-payer programs like the ones in most every other Western Country, including our neighbors to the north and south of us, is that it will ration care and increase our taxes.  There is no real evidence of any consequence that justifies the “rationing health care” claim but clearly taxes will increase if such programs are implemented.  Health care after all isn’t free.

This latter fact however really shouldn’t alarm people if they would only look closer at their overall out of pocket expenses they already pay for health insurance and other health care coverage not covered by insurance.

We spend almost $3 trillion nationwide on health care, about twice the average of all other wealthy nations. Our health care system has plenty of problems, but a shortage of money is not one of them. Historically, we in the U.S. have responded to problems in health care by throwing money at them. This mountain of money has led to a lot of wasteful spending.

High health care costs have raised taxes and insurance premiums, depressed wages and eroded public budgets. The more money we pump into our health care system, the worse it seems to get.

We spend so much because we have the highest prices for products and services in the world and often overuse them. Experts estimate that 30 percent of health care services provided in the U.S. offer little or no benefit to patients.   SOURCE

That we pay too much for products and services that we overuse was brought to light in a recent “60 Minutes” segment.  In Leslie Stahl’s report, Treating Depression: Is there a placebo effect?,  research has shown that anti-depressant medication like Prozac has little if any affect on many patients who are treated with this product that rakes in $11.3 billion annually.  This information was revealed in Stahl’s interview with the Harvard expert who has done the research.

Irving Kirsch is the associate director of the Placebo Studies Program at Harvard Medical School, and he says that his research challenges the very effectiveness of antidepressants.

Irving Kirsch: The difference between the effect of a placebo and the effect of an antidepressant is minimal for most people.

Lesley Stahl: So you’re saying if they took a sugar pill, they’d have the same effect?

Irving Kirsch: They’d have almost as large an effect and whatever difference there would be would be clinically insignificant.

Stahl: But people are getting better taking antidepressants. I know them.

Kirsch: Oh, yes.

Stahl: We all know them.

Kirsch: People get better when they take the drug. But it’s not the chemical ingredients of the drug that are making them better. It’s largely the placebo effect.

Irving Kirsch’s specialty has been the study of the placebo effect: the taking of a dummy pill without any medication in it that creates an expectation of healing that is so powerful, symptoms are actually alleviated.

What appeared to go unnoticed late in the 60 Minutes report was an example that demonstrated how a government-controlled single payer health care program could eliminate such needless costs and better utilize those funds to treat depression without invasive drug use.  Great Britain’s National Health Service (NHS) has changed it practices following its own review of clinical trials with anti-depressants, eliminating the use of drugs in most cases where they serve no real benefit, and redirecting those funds to create jobs by training more talk therapists to bypass the chemical dependency of anti-depressants.

Dr. Tim Kendall, a practicing psychiatrist and co-director of the [NHS] commission that did the review says that like Irving Kirsch – they were surprised by what they found in the drug companies’ unpublished data.

Kendall: With the published evidence, it significantly overestimated the effectiveness of these drugs and it underestimated the side effects.

Stahl: The FDA would say that some of these unpublished studies are unpublished because there were flaws in the way the trials were conducted.

Kendall: This is a multibillion dollar industry. I doubt that they are spending $10 million per trial to come up with a poor methodology. What characterizes the unpublished is that they’re negative. Now I don’t think it’s that their method is somehow wrong; it’s that their outcome is not suitable from the company’s point of view.

Because of the review, new public health guidelines were issued. Now drugs are given only to the severely depressed as the first line of treatment. For those with mild to moderate depression, the British government is spending nearly half a billion dollars training an army of talk therapists.

Further evidence revealed by the NHS showed that physical exercise has an equal curative effect for those on anti-depressants who are classified as mildly depressed.  Imagine the costs savings to this program which gets passed on to the taxpayer because of this study and the policy change it effected.  Now imagine if there were a single-payer program in this country that severely limited this needless drug for many of the 17 million Americans currently taking some form of anti-depressants.  The argument by those who oppose government-managed health care would be significantly weakened.

In fact if you go back to the argument that government-managed health care would “ration” health care you would find that such rationing is exemplified in changes like that with England’s NHS’s decision to eliminate unnecessary products.  Much of what is increasing our health care costs in this country are physician prescribed tests and drugs that many patients ask for having been influenced by the heavy commercialization of these controlled medications and procedures.

What all this points to, like the information I shared with you in my last post concerning Merck Corporation’s bogus claims about Vioxx,  is that there is a concerted effort in this country in the health care field where private, for-profit interests take precedent over a patient’s need.  Also, those governmental agencies that are established to look out after our interests are found to be too friendly and cozy with Big Pharma and the major health care providers in this country, often looking the other way when evidence shows that services and products are being needlessly touted for the beneficial needs of consumers.

Corruption and inefficiency can occur in any effort where large sums of money are involved, public or private.  Examples like this show that unjustified expenses which impact high health care costs occuring where private sector policies and practices along with weak and negligent government oversight exist, have negative consequences for American citizens.

Private industries don’t review their practices in ways that necessarily cut consumer costs because it is the profit they seek over any savings for consumers.  Only when some outside watch-dog group has spotted this profiteering does the company then either try to justify it or take corrective action.  But by then a lot of damage has been done and huge profits have already been paid out in the form of stock holder dividends and executive bonuses.

Medicare and Medicaid have been judged too costly and inefficient in this country by those who champion privatization but research has shown that rising costs are the result of fraudulent claims in the private sector by medical suppliers, some physicians and health care institutions.  However, consumers can also be conned into adding to this cost issue.  The influences of those companies that manufacture medical devices, pharmaceuticals and provide services, through their direct appeal to consumers on TV, radio and newsprint ads, has increased a needless demand for such commodities that either insurers are expected to cover or must come out of our own pockets.  As these unwarranted procedures and medication usages increases, those costs get passed on to us directly in the form of higher premiums.

To their advantage a diligent, certified set of people within the insurance industry  can often catch needless health care recommendations, refusing to pay for them and thus help keep overall costs down.  But like the pharmaceutical companies and health care providers that they have to deal with, health insurance companies are also motivated by profits and sometimes get too zealous in their efforts to deny services for patients; services that are genuinely needed to save a life.  There are also built-in incentives at some insurance companies for employees to deny as many claims as they can through various unethical methods.

A government run health care program that’s always being transparently scrutinized by the public and their representatives is highly motivated to keep tax payer costs down by insuring that only qualified and necessary goods and services are being utilized.  What’s key in implementing such a program though is to establish criteria that makes it tough if not impossible for people who serve this government function to have any ties or allegiances to the private sector.

With better access to affordable and adequate health care for all people we become a more productive society and thus set the stage for generating greater wealth for more people.  This is something that clearly needs to be addressed as we have slowly watched a once vibrant middle class in this country disappear over the last few decades.

People now sense something new. Something fundamental is wrong, not just if we elect the next guy. That’s a big deal in history when that begins to happen and I think that’s one of the things coming out of this pattern of decay and stagnation. - Gar Alpwerovitz, author of America Beyond Capitalsism


You can’t trust them on this issue and here’s how you know they are deceiving you

You don’t have to be a retiree or even be getting close to retirement age to show some interest in Medicare.  People of all ages are being directly impacted by this necessary social program either as a recipient of its services or as a donor to the costs of it in the form of your FICA deductions on your payroll check.

Medicare is the federally funded health care insurance for people 65 or older.  It provides a health care safety net for those seniors whose retirement income is nil or inadequate to purchase private health insurance.  It may come as no surprise to you that about 95% of us would qualify for Medicare based on this single point.

The biggest reason for this is that health care coverage in the private sector begins to fade for many elderly people as they age, for obvious reasons.  Insurance companies are unwilling to insure people who are more likely than not to have health issues so if they offer anything at all they do so at rates that are beyond the retirement incomes of most Americans.  This reality saw too many people die at earlier ages than they would have if for but basic health care coverage and adequate medications.  So most Americans supported and the government passed the Social Security Act of 1965 that established Medicare and Medicaid to assist the aging and disabled poor in this country.

The benefits are paid through a payroll deduction listed as the Medicare Tax on your paycheck.  Like Social Security this tax goes toward current expenses meaning that when young people today reach retirement age, unless they have been able to set vast amounts aside to cover long-term health care coverage, their benefits will come from the existing crop of the labor market.

It is this factor that sparks this conversation about misinformation your GOP representative will tell you in order to achieve their agenda for dismantling Medicare.  It is true that based on current practices Medicare will become a large burden to the U.S. deficit and a continuing drain on your ever smaller paychecks.  But the devil as usual is in the details.  There is a fix for this that Speaker John Boehner, Paul Ryan and the Tea Party members of the GOP are unwilling to discuss with their constituents.

Costs are getting out of control for Medicare because of two primary factors: Fraud and rising health care costs.  Medicare fraud is the abuse of doctors, hospitals, health care providers and medical supply companies over-charging the government for services rendered, or in some cases, deliberately billing Uncle Sam for non-existent services to both living and deceased Medicare beneficiaries.  Yes, there are scam artists out there that use the social security numbers of deceased beneficiaries to submit fraudulent claims to state Medicare offices.  These abuses of the system cost the U.S. taxpayer as much as $60 billion a year by some estimates.

The new health care reform legislation passed by the Democrats last year attempts to recoup these losses which will strengthen Medicare and keep your tax share between a meager 1-2% of your total gross wages.  The reform legislation saves anywhere from $7 to $14 dollars for every dollar invested to combat fraud, according to one report by AARP.  Yet the Republicans not only battled to prevent this health care legislation from being enacted into law, since winning back the House this last November the GOP is trying to repeal it.

If you want to scare today’s youth about what impacts their wages as they struggle to find a job in today’s market, raise the specter of higher Medicare costs that will be deducted from their shrinking paychecks.  Do  not explain to them that you are not only avoiding efforts to curtail rising health care costs in the private sector which impacts Medicare costs but that you are also trying to prevent measures that will recoup much of what has been lost through abuses by the private sector.

Young people and many middle-aged people who oppose Medicare because of these frightening costs projections by the GOP and their Tea Party mongrels need only look at what their costs would be if they or their elderly parents and grandparents had to pay for everything required to sustain a quality life for them as their health deteriorated.  Obviously many of these seniors are on fixed incomes.  Thanks to Social Security many would not even have these small amounts.

Clearly these assets are insufficient to purchase adequate health insurance coverage from the private sector so that financial burden would fall on kids and grandkids, if they truly care about their aging elders.  We won’t even touch on those elders who perish simply because they have no family and close friends to assist them.  Without control measures to stem the rising costs of private health care, all are at the mercy of an industry that seeks to satisfy its share holders above any need to provide reasonably priced health care for low and middle-income wage earners.

Under this arrangement individuals whose aging parents suffer from long-term diseases like Parkinson’s and Alzheimer’s would have to front the expense to care for them.  In 2010, 14.9 million family and friends provided 17 billion hours of unpaid care to those with Alzheimer’s and other dementias alone at costs to them estimated at $202.6 billion.  This is prohibitive even for those of moderate means.  Without efforts to reduce health care costs and the help to distribute these high costs across a vast number of people, many older people we love would suffer needlessly and die sooner as a result of the poor health care they would have to endure.

That’s what your meager 1-2% in Medicare taxes alleviates for you and the majority of Americans.  If health care needs are out-pacing the means to pay for them then why not ask your elected official why they don’t either act to curb out-of-control health care costs or even create necessary revenue to insure there is no reduction in services.

There are reforms that we should focus on regarding things like what is necessary as opposed to what is convenient for caregivers, such as expensive redundant procedures that do little more than give them an extra CYA tool in the event there is a lawsuit.  These reforms however touch only the tip of the health care cost iceberg in this country.

Cutting health care costs and raising taxes at a fair rate across the board are measures that 0ne should not demagogue to serve a political agenda that sides with private corporate interests.  Free-market mechanics simply don’t play out acceptably in health care coverage as it does with buying and selling durable and non-durable goods.  The cause and effect of the so-called “invisible hand of the market” reacts too slowly too often, allowing people to die or suffer needlessly before it corrects itself.

When the GOP is unwilling to cut corporate welfare subsidies for oil and large agricultural companies, or lower Defense costs in order to balance the budget, they have no right to expect the rest of us to carry the burden of doing so as they further diminish our efforts to pay for “the greatest health care system in the world”.



As money talks, doctors walk to greener pastures, leaving lower-income patients to find health care services in a shrinking field of primary physician services.

On the health care horizon there is a practice occurring in patient/doctor relationships that if it takes off, could create a problem for people who are on fixed incomes and rely on Medicare to help pay their medical costs.  A practice known as retainer-based arrangements or informally called “concierge” or “boutique medicine” is appealing to many primary care physicians who say they are struggling to sustain a practice.  In order to make ends meet with more and more patients unable to afford the increasing costs of health care in this country, some doctors say this extra fee for services reduces their urges to get out of medicine altogether.

For those who can afford it, patients pay a monthly or yearly fee ranging anywhere from $600 to $5200 annually, depending on which one of three models the doctor subscribes to.  This additional fee is above and beyond what Medicare or private insurance pays for and gets you a more direct line to your doctor with more time to discuss your personal health issues.  The potential for harm here to lower-income patients is that this greater access by higher income people is time that will be taken away from those who can’t afford this luxury.

The benefit to doctors other than the obvious monetary one is that they get to spend a greater amount of their time with patients, enabling them to better diagnose a patient’s problems and more accurately prescribe treatments that will remedy or cure what ails them.  It is this aspect of the arrangement that some doctors are finding attractive, though, according to an AP report on this issue, “people unable to afford the retainer might find themselves stuck on a lower tier, facing less time with doctors and longer waits.”

“Medicare recipients, who account for a big share of patients in doctors’ offices, are the most vulnerable. The program’s financial troubles are causing doctors to reassess their participation. But the impact could be broader because primary care doctors are in short supply and the health law will bring in more than 30 million newly insured patients.” (High-end medical option prompts Medicare worries, by Ricardo Alonso-Zaldivar, AP, 4/2/11)

Currently there are fewer than 800 concierge doctors nationally but that is five times the number it was just six years ago.  In a field of about 300,000 generalists the small number who have signed on for this elite service is having no real impact on physician-patient heath care relationships.  But Robert Berenson, a commissioner with MedPAC, which was created by Congress to advise lawmakers on Medicare and watches for problems with access, sees this arrangement as the “canary in the coal mine” for more doctors.  He’s concerned that “the fact that excellent doctors are doing this suggests we’ve got a problem.  The lesson is, if we don’t attend to what is now a relatively small phenomenon, it’s going to blow up.”

Fellow commissioner and MedPAC chairman Glenn Hackbarth agrees.  “My worst fear — and I don’t know how realistic it is — is that this is a harbinger of our approaching a tipping point,” said Hackbarth, noting that ‘there’s too much money’ for doctors to pass up.”

There is of course great value to this for those who can afford it.  Many of us who deal with the health care system today often feel we don’t get the attention we need and want.  This is a factor of too many patients being handled by a single physician.  But unless a physician or health care provider has large numbers of patients paying at often break even rates, it is hard for many providers to cover costs to sustain a practice.

Where this arrangement may run into legal problems with government assistance programs like Medicare is when it could lapse into a form of double dipping.  One of the three models that presents this problem is where the arrangement exists to charge the retainer fee while still billing Medicare for some visits that the physician will claim are not covered with the retainer.  Elizabeth Hargrave, whose study from the National Opinion Research Center at the University of Chicago and Georgetown University was  presented to MedPAC during a Sept. 13 briefing in Washington, D.C., pointed out that “there are potential liabilities posed by billing patients for services that are already covered.” (Concierge medicine a mere blip on Medicare radar, by Chris Silva, amednews staff, 9/30/10)

Adding fuel to this potential crisis is the fact that numbers of primary care physicians in this country are dropping.  “In 1949, 59 percent of doctors worked in primary care, but by 1995 that number was down to 37 percent. Over the past ten years, as many as one in five primary care providers have left the profession. There’s a broad expert consensus that we face a critical shortage of general practitioners and that the problem is only getting worse,”  according to N. Thomas Connally, a retired internist who practiced his trade for thirty-three years in Washington, D.C.

The recent efforts by Democrats and the Obama administration to reform health care coverage has run into stiff opposition by the health insurance industry and many corporate health care entities, along with their conservative backers in Congress.  The Patient Protection and Affordable Care Act (PPACA) will extend the life of the Medicare Trust fund to at least 2029.  But House and Senate Republicans say these measures  will be a burden to taxpayers, despite the plan’s ability to pay for such costs as it recoup funds lost to waste, fraud and abuse that have been rampant over the last couple of decades.

Spending on U.S. healthcare as a percentage of...

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There is still uncertainty amongst many doctors too as a recent Thomson Reuters – HCPlexus National Physicians Survey found, where 65% of those questioned “fear that the quality of care will deteriorate under PPACA and that their reimbursements (pay) will go down as well.”  Clearly there is much work that needs to be done to correct what is wrong with our current system.  With more and more baby-boomers joining the ranks for Medicare coverage there will be a greater opportunity for many to fall through the cracks.  Without addressing the need to increase the number of primary care physicians, the practice of concierge medicine will only elevate the problems if this practice continues to grow at it’s current rate



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