Bush's 2007 Budget
- Thread starter andrasnm
- Start date
How has the system been gamed, specifically, healthcare, so that there is collusion between all the companies out there causing artificially inflated prices?
You can't prove it....it's a baseless charge....and perhaps you are the one who is both disingenuous and making a weak arugument.
Perhaps you should pull out an economic text to review the definition of these business models, and then demonstrate to me how the healthcare industry fits within that definition.
My contention is that it is a competitive industry with no collusion, and the many options available in terms of healthcare plans makes them substitutes for each other. It is very competitive. Not perfect competition because there are some barriers to entry, and those are regulatory issues. (afterall, an insurance company should have some cash on hand to pay for claims when they arise)
Now you and your cronies run out there and prove me wrong....I don't want to read another series of worthless opinions, formulas, or other tom foolery...just a well drawn out economic case.
I wish you good luck, you may have the last word!
mschey,i dont know about proof or whatever you have in mind but you should consider the fact that in Japan with their super efficient and higher qualithy healthcare the costs are about half per capita compared with the healthcare cost here in the states.how comes? isnt a "free market" healthcare supposed to be better,more efficient and actually cheaper ?
...yea,i know we have the Mayo clinic and a dozen others but does that justifies the whole system?
what can the Japanese better that we cant ? btw many Euro countries also have great "social healthcare"...
...after all isnt "social healthcare " supposed to be less efficient,more expensive
?
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i have to agree with some from the above posters about special interest,our whole accounting/tax system is built on special interests/deductions etc,it does only help certain individuals/economic entities but not really the country,the economy.
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just my 2c
...yea,i know we have the Mayo clinic and a dozen others but does that justifies the whole system?
what can the Japanese better that we cant ? btw many Euro countries also have great "social healthcare"...
...after all isnt "social healthcare " supposed to be less efficient,more expensive
?---
i have to agree with some from the above posters about special interest,our whole accounting/tax system is built on special interests/deductions etc,it does only help certain individuals/economic entities but not really the country,the economy.
---
just my 2c
There is no collusion in healthcare among providers but the US through its Medicare program fixes rates for nearly all services. Call it what you like. All insurers use these rates to determine their " allowable" or UCR. EVERYONE
Example, in my state all work comp or MVA are paid at 110% of medicare , no exceptions its state law. This is thru private insurers like Aetna Allstate, etc. Medicare gives a 2-3 % rate increase each year. So the govt controls the rates.
Example, in my state all work comp or MVA are paid at 110% of medicare , no exceptions its state law. This is thru private insurers like Aetna Allstate, etc. Medicare gives a 2-3 % rate increase each year. So the govt controls the rates.
The main reason the US is so unhealthy in so many measures is primarily lifestyle.
The second reason is that medicine only treats the disease once you are sick or show show symptoms.
Other than vaccines please name some drugs that are truly prevention based and do not treat a disease.???
The second reason is that medicine only treats the disease once you are sick or show show symptoms.
Other than vaccines please name some drugs that are truly prevention based and do not treat a disease.???
Good Morning,
Please let me do the work for you.
First a general point about substitutes.
We don't have any real substitutes for hospitals, drugs, or medical devices. I don't choose which stent I get or which antibiotic I take or which hospital I go to when I need urgent medical care. I certainly don't price shop under those circumstances -- in fact I have no idea what these services cost until I see the bill. Just as clearly, consumers are price takers with respect to insurance plans -- they take whatever plan their employer gives them. It really isn't the case that the majority of Americans get to choose which plan you take or what the cost of it will be.
Next, the terms I mentioned in my last post, Monopoly, Oligopoly, Cartel. You need to understand the definitions of those terms and how they work. It doesn't take every company in an industry -- or even most -- to collude to set prices. No one would assert that collusion requires every market participant to meet the definition of price fixing.
So let's talk about the health care industry for a second.
Profit Picture:
Healthcare industry profits grew by an average of 26.4% per annum over from 1999-2004. Healthcare insurance profits grew by 18.9% per annum. Medical Products and Equipment profits grew by 17.3% per annum. Each of these industries was in the top 8 of all industries for profits.
Return on Equity:
These three groups have had the 2-4 highest return on equity of all industry sectors over the past 5 years -- only homebuilders did better. ROE runs from 26% - 34%. Having worked in private equity I can tell you that that would be considered a nice return for funds investing in risky startups -- not large publically traded Fortune 1000 companies. Clearly, the industry is making excess profits at this time.
Market Concentration:
Taking the top 10 companies in each sector as representing the bulk of the sector, the top 3 control over 50% of their markets. In the hospital sector it is well over 65%.
Costs:
During this time, consumer healthcare costs have increased at double digit rates. Yet, inflation has been in the low single digits. What does this suggest to you about industry pricing power and profitability? Finally, reread some of the other posts which illustrate that other countries provide higher quality care at a lower cost.
Political:
This is a bit easier -- as it is more blatant. Congress has refused to allow bulk purchasing by the states to reduce costs. Congress refused to allow import of drugs from Canada -- and don't give me that BS that Canadian drugs aren't safe. The Senate Majority leader sold stock in his brother's Hospital company from a blind trust right before bad news was released and the stock cratered. During the time he held this stock he directed reform on Medicare and patient issues.
Legal:
Vioxx: Merk knew the drug was dangerous. They hid the information figuring that it wouldn't be noticed and that fighting it in court would be cheaper than losing their blockbuster drug. [for your tort reform argument if that's not clear]
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So for inputs to this discussion I have added. :
1. A market for which there are no real substitutes.
2. An industry which has rammed through double digit price increases for years while inflation is in the low single digits.
3. A congress that prevents reducing drug costs for americans.
4. A head of the senate whose brother runs one of the two largest hospital chains in the country and just coincidentally is accused of dumping stock in that company at a propitious moment.
5. A major pharma company that would knowingly let patients die from their drugs and risk the lawsuits then remove it from the market.
For outputs we have:
1. Private equity style returns for Fortune 1000 companies.
2. 5 year average profitability run rates of 26%+.
Doesn't it seem obvious?