Sunday, July 10, 2011

Markets in Everything and Antidote to Obamacare: On-Site Modern, Full-Service Medical Clinics

LA Times -- "Major employers across the country, eager to curb fast-rising healthcare costs, are opening their own state-of-the-art health centers where doctors and nurses provide medical care to workers often just steps from their desks.

The cost-cutting strategy has been embraced by dozens of companies — typically large employers that are self-insured and pay their own medical claims, including Walt Disney Co., Qualcomm Inc. and American Express Co.

Many of the health centers are full-service medical offices equipped with exam rooms, X-ray machines and pharmacies. Some provide on-site appointments with dentists, dermatologists, psychiatrists and other specialists who treat life-threatening illnesses.

Executives say providing in-house medical care keeps workers healthy and productive. But the clinics also help the bottom line by reducing absenteeism and slashing employers' medical bills for outside doctors and emergency rooms."

35 Comments:

At 7/10/2011 11:23 PM, Blogger Wayne Adams said...

I like that businesses are innovating. But this is exactly the type of innovation that we don't want.

These are innovations that mitigate economic losses. They aren't innovations that increase economic gains.

Isn't a major factor to the health care problem the very practice of health care being tied to employment? And didn't this start as an innovation to avoid paying salaries during the high income tax era during and after WWII?

 
At 7/11/2011 6:28 AM, Blogger juandos said...

Good point Adams!

Another point is that patient privacy is problematic...

 
At 7/11/2011 8:08 AM, Blogger morganovich said...

"These are innovations that mitigate economic losses. They aren't innovations that increase economic gains."

this is not true at all.

it just shifts gains around and makes the system as a whole more efficient.

it provides the same service for less money because you take out the overhead and profit of the insurance companies and all the insurance claim overhead from the doctors.

this is the sort of service you'd love an employer to provide. they are still insuring you as well. it's not like they have onsite chemotherapy or surgery.

your argument is equivalent to saying that getting free lunch in the company cafeteria is bad because it means you'll be worse off if you leave. you could say the same about higher salary for that matter.

 
At 7/11/2011 8:12 AM, Blogger Methinks said...

We've long had a full medical facility in every investment bank in NY (at least the ones I worked in).

They did skin cancer screenings, physicals, etc. They were equipped like a regular physician's clinic and two or three physicians held office hours there in addition to their private practice. Great set-up.

 
At 7/11/2011 10:51 AM, Blogger KauaiMark said...

"...health care problem the very practice of health care being tied to employment"

I always thought it was: health care problem the very practice of health care being tied insurance companies and lawyers.

 
At 7/11/2011 11:09 AM, Blogger Buddy R Pacifico said...

""...health care problem the very practice of health care being tied to employment"

I always thought this was a bonanza for the employee.

 
At 7/11/2011 11:14 AM, Blogger Benjamin said...

This comment has been removed by the author.

 
At 7/11/2011 11:18 AM, Blogger Benjamin said...

Love the innovation, but...the national time bomb is how to take care of old people, who are typically retired.

The elephant in the room is euthanasia. Right now, we expend mountains of money keeping people "alive" who are both terminally ill and aged.

Other factions (largely within the GOP) even want to keep the Terri Schiavos of the world "alive" indefinitely, at enormous expense.

If we insist on keeping people "alive" past their expiration date, we will bankrupt ourselves, no matter how we fund health care.

The "pulling the plug" on the terminally ill is one topic you will never hear at a Tea Party gathering. It is one topic we need to hear.

 
At 7/11/2011 11:39 AM, Blogger Bill L said...

It's not about medical care. It's about employee productivity. It is safe to say that a 15 minute physician visit takes one to two hours patient time when travel and waiting room time are included. That is one to two hours during the productive work day. Cutting the wasted time from hours to minutes is a great way to boost company productivity, especially for large facilities. And productivity gains is what drive economic gains. Good for them.

 
At 7/11/2011 12:07 PM, Blogger morganovich said...

"The "pulling the plug" on the terminally ill is one topic you will never hear at a Tea Party gathering. It is one topic we need to hear."

there's a very easy solution:

make medicare into cash grants. make the whole system cash pay from HSA's.

then, make you own choices about what care is worth spending money on.

the problem is that we have made "pulling the plug" the purview of government at all.

they should not even be in a position to influence such choices.

 
At 7/11/2011 12:14 PM, Blogger morganovich said...

"Other factions (largely within the GOP) even want to keep the Terri Schiavos of the world "alive" indefinitely, at enormous expense."

i have never understood this logic.

god wants us to keep her on life support?

isn't he the one who made her unable to sustain life on her own?

perhaps it was god's will that she die and we're messing it up.

if he wanted her to live, he should have healed her, no?

 
At 7/11/2011 12:26 PM, Blogger Benjamin said...

Morgan Frank-

I think we actually agree on something. I am going to lie down for a while.

 
At 7/11/2011 12:38 PM, Blogger Seth said...

"if he wanted her to live, he should have healed her, no?"

Using that logic, "he" would not have let life support machines be invented in the first place, would he?

btw...as I recall the Schiavo case wasn't about keeping her on life support at any cost, it was about who was to make that decision.

"Isn't a major factor to the health care problem the very practice of health care being tied to employment?"

Sure. But that doesn't mean that companies can't try to make the best out of the situation they have. Until Congress decides to change the tax advantage of employer-provided health care, they will look for the best options they have.

 
At 7/11/2011 12:43 PM, Blogger Innovation rules said...

These are innovations that mitigate economic losses. They aren't innovations that increase economic gains.

This statement is only partly correct. The current principal consumer of health care (employers) are innovating in an attempt to control their costs. One way to do that is to vertically control the supply chain, although in the end freer markets prove a different, more complex model is more efficient.

Until we put the ultimate customer back in charge of health care, our gains will be minimal.

 
At 7/11/2011 12:47 PM, Blogger Innovation rules said...

The "pulling the plug" on the terminally ill is one topic you will never hear at a Tea Party gathering. It is one topic we need to hear.

This statement is not technically correct. The conversation about pulling the plug should be had by the individual consuming the health care, not anyone else.

There are many methods of guaranteeing every individual a minimum of care, including end of life issues, without destroying or regulating a market which would naturally develop complexity and quality while controlling cost.

 
At 7/11/2011 12:48 PM, Blogger Benjamin said...

BTW, before we voucherize Medicare, we should test it out on the Veteran's Administration.

 
At 7/11/2011 12:58 PM, Blogger Jet Beagle said...

Wayne Adams: "And didn't this start as an innovation to avoid paying salaries during the high income tax era during and after WWII?"

Not exactly.

In the early 20th century, insurance companies were reluctant to offer private health insurance. Melissa Thomasson, Miami University, explains:

"Commercial insurance companies did not believe that health was an insurable commodity because of the high potential for adverse selection and moral hazard."

By 1940, however, insurance companies had discovered how to overcome adverse selection:

"The success of Blue Cross and Blue Shield showed just how easily adverse selection problems could be overcome: by focusing on providing health insurance only to groups of employed workers. This would allow commercial insurance companies to avoid adverse selection because they would insure relatively young, healthy people who did not individually seek health insurance."

from Health Insurance in the United States

The growth in employer-provided health insurance was already underway when the federal government implemented wage restrictions in WWII. Those restrictions accelerated but did not start the growth in employer-provided health insurance.

FYI, it was not until 1954 that tax deductibility of health insurance was made available to all employers.

 
At 7/11/2011 2:00 PM, Blogger arbitrage789 said...

Any one of three things could derail, or at least significantly hobble, Obamacare:

a) the Supreme Court recognizes that the individual mandate is not justified by the commerce clause of the constitution;

b) the Supreme Court finds that the mandates on the states with respect to Medicaid constitute a violation of the 10th amendment;

c) Obama fails to win re-election.

Of the three, I’d say that the first of these has the best chance of coming to pass.

 
At 7/11/2011 2:13 PM, Blogger Michael Hoff said...

Benjamin,

Old people are the wealthiest demo in the country. Hence, they can afford health care and health insurance easier than those of us who are actually paying for it for them.

 
At 7/11/2011 2:25 PM, Blogger morganovich said...

benji-

i was thinking the same thing.

gonna need a big drink of some sort.

 
At 7/11/2011 2:28 PM, Blogger morganovich said...

"BTW, before we voucherize Medicare, we should test it out on the Veteran's Administration."

why?

why not just move it all?

the VA is a little tricky though. if you are wounded in combat and require medical care, that's kind of a workman's comp issue, no? (talk about an unsafe workplace)

if might be easier for the military to just pay for care than to go through the settlement process then bill for the VA.

 
At 7/11/2011 2:48 PM, Blogger Benjamin said...

Morgan Frank-

Actually, the VA is the first agency we should voucherize and privatize.

Now, veterans can only get care at a VA facility. No competition whatsoever.

So, whatever reduction is suggested for Medicare, in terms of outlays, should also apply to VA benefits.

Surely the private sector can provide benefits for a lot less, and veterans can prioritize their outlays (vouchers) to best effect.

That said, I now believe that all federal retirement benefits--civilian and military--need to be stoppered. The tax-paying public just ends up paying for financial time bombs.

 
At 7/11/2011 2:57 PM, Blogger Jet Beagle said...

Michael Hoff: "Old people are the wealthiest demo in the country."

The average wealth of retired persons may be higher than that of working persons. But I don't think the median wealth is much different.

Michael Hoff: "Hence, they can afford health care and health insurance easier than those of us who are actually paying for it for them."

Without Medicare, most retired folks would be unable to obtain health insurance. Medical costs for old people are many times larger than medical care for working-age persons. Absent government funding of some sort, I do not believe insurance companies would bother offerring health insurance for retirees.

 
At 7/11/2011 3:17 PM, Blogger juandos said...

""The "pulling the plug" on the terminally ill is one topic you will never hear at a Tea Party gathering"...

What absolute blather!!

Typical pseudo benny stupidity at work again...

At the local TEA party meets here in St. Louis county its a topic returned to time and again...

Why? Because all 'end of life issues' are known to be the most expensive part of getting old...

 
At 7/11/2011 3:20 PM, Blogger Benjamin said...

Jaundos-

Delighted to know that the St. Loo chapter of the Tea Party will advocate for euthanasia.

When the national TP comes on board, let me know.

 
At 7/11/2011 4:05 PM, Blogger juandos said...

"Delighted to know that the St. Loo chapter of the Tea Party will advocate for euthanasia"...

We've advocating the euthanasia for decades now...

 
At 7/11/2011 4:31 PM, Blogger Benjamin said...

Juandos-

I did not know the Tea Party was such a storied institution, reaching back decades--and so enlightened!

My impression has been that "right-wingers" want to keep Terri Schiavo "alive" forever, and think that "death panels" are instruments of the devil (or Obama, which may be the same thing).

As I always say about euthanasia, "Euth first."

 
At 7/11/2011 5:17 PM, Blogger morganovich said...

"Actually, the VA is the first agency we should voucherize and privatize."

and how will you determine the value of the vouchers?

what's a chest wound worth.

"Now, veterans can only get care at a VA facility. No competition whatsoever."

huh? i thought they could buy insurance or pay cash anywhere they like.

the VA is just a perk of having been a soldier, not the whole of their health plan.

it's also an immaterial amount of money relative to the other programs.

it's around 5% of the size of medicare/aid.

i have no idea why you harp on it so incessantly like it is somehow the problem.

 
At 7/11/2011 5:31 PM, Blogger Benjamin said...

Morgan Frank: VA outlays in recent years have tripled to more than $130 billion annually.

That will be $1.3 trillion in next 10 years. At least.

Oh, I think a trillion dollars is worth thinking about. That taxpayer money, siphoned out of hte private, jobs- and wealth-creating sector.

Veterans get their health care at federal, taxpayer provided VA facilities--not free market clinics, hospitals etc. The most inefficient method possible.

Reduce VA outlays to $40 billion annually, give veterans vouchers that money. Wipe out the VA entirely, let the veterans go where they want to for care. Free to chose.

We save $800 billion in next 10 years.

It is roughly the same plan as the Ryan plan for Medicare.

 
At 7/11/2011 5:31 PM, Blogger morganovich said...

"Absent government funding of some sort, I do not believe insurance companies would bother offerring health insurance for retirees."

sure they would. it would just be expensive.

of course, if you save 3% of your income for your whole career and invest it at 5-8% return, you'll have plenty of cash to pay for it, even at 20k a year.

do the math on saving $1700/year at 5% return for 40 years. (and keep in mind it keeps compounding even after you retire)

you'd have about $230k in cash (at 5%) or up to $540k (at 8%).

that's plenty of money to buy insurance or cash pay for procedures.

it's easy to overlook just how much we wind up paying in FICA and how poorly the government compounds it for us.

your social security nest egg (assuming $57k income) would be $920k at 5% and a whopping $2.15 million at 8%.

that's MUCH more than you'd get from social security.

a $2 million annuity would pay you easily 10 times your SS benefit. hell, at 5% interest, it would pay you 100k a year and you'd never touch the principal.

it's really easy to underestimate just what a horrific deal these fica programs are.

 
At 7/11/2011 5:42 PM, Blogger morganovich said...

benji-

you may have noticed that there have been a couple of wars on.

that increases that budget.

these wars have had a lot of wounded. that kind of thing is expensive.

still, compared to the medi programs, it's tiny.

they had what, 800 billion in cash costs and another 1.8 TRILLION in unfunded liabilities in 2010?

so $2.6 trillion vs 130 bn and you want to focus on the small one?

it's 5% of the costs getting racked up.

so again, what's your bizarre obsession with the VA?

it's a drop in the bucket cost wise, that cannot be the explanation.

seriously, did a soldier knock you down, kick sand in your face, and steal your girl or something?

i would much rather pay the healthcare of someone who took a bullet defending me than that of some oldster who wants $300k of chemo to live an extra 2 weeks.

 
At 7/12/2011 5:03 AM, Blogger Jet Beagle said...

morganovich: "it's really easy to underestimate just what a horrific deal these fica programs are."

I agree that social security is a horrible deal. I do not agree that medicare is a horrible insurance deal for seniors - at current levels of benefits. Of course, medicare is not sustainable at current levels of benefits - and even worse at projected levels of benefits.

morganovich: "that's plenty of money to buy insurance or cash pay for procedures."

Diabetics such as me would not be able to obtain health insurance for $500K. The expected cost of remaining lifetime treatment for my illness is higher than $500K.

I am fairly certain that many other medical conditions which medicare covers will cost more than $500K over one's retirement.

The problem I have with private solutions to retiree coverage is the ease with which private insurers can drop an insuree.

IMO, anyone who believes they could depend on private insurors for insurance coverage until death is a fool. Anyone who is willing to gamble that $500K will cover medical care through death is equally foolish.

Please know that I am - for almost every other good and service - a believer in free market solutions.

 
At 7/12/2011 9:23 AM, Blogger morganovich said...

jet-

i think you are making a bit of a specious argument.

first, you argue that we cannot afford medicare as exists, then you try to use the fact that it covers some very expensive treatments as grounds for arguing that it is a good deal. you seem to be on both sides of this.

all insurance looks like a good deal if you have an adverse event.

if you have a $90,000 car, paying $30,000 a year for insurance is insane overall, but you still win if you wreck your car 6 months later.

that doesn't make it a good deal.

the winning lottery ticket is always a great buy, but that does not make buying lottery tickets a good buy.

 
At 7/12/2011 9:26 AM, Blogger morganovich said...

bunny-

you seem to be very inconsistent here.

on the one hand, you applaud a private company reducing healthcare costs and upping convenience by running their own care, then, you attack the VA for doing the same thing.

you seem to do things like this all the time. you have some of the most remarkably inconsistent thinking i have ever come across.

 
At 7/12/2011 10:12 AM, Blogger Jet Beagle said...

morganovich,

You are attributing arguments to me which I did not make.

The point I argued is that medicare is currently a good deal for those folks who are receiving its benefits. I do not believe private insurance companies would ever offer a benefits package near what medicare is offerring. At least not at a price as low as current medicare beneficiaries have paid over their working lives.

Furthermore, medicare will continue to be a good deal for current beneficiaries and near-term beneficiaries as long as taxpayers continue to fund it. People like me just haven't paid in near as much as we are going to receive in benefits - even if we factored in the time value of money.

I am not arguing that medicare is sustainable. It is clearly not. So, at some point in the future, medicare will become a bad deal even for its beneficiaries.

Medicare is definitely a bad deal for all those who follow the Boomers. amd perhaps some of the later Boomers.

That's an entirely different than social security. Social security has been a bad deal for Boomers and those following them. After FICA taxes were raised in the mid-1980s, social security became a financially poor deal.

 

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