A simple health care proposal

I would propose a simple health care plan. Make the health care plan available to federal employees open to all residents of the United States. Any premiums would be deductiable by the individual and if you cannot afford the plan, then the government would pay the premium. The employer would pay the government portion.

This is one plan available to federal government employees.

Plan: Blue Cross and Blue Shield standard family plan

Cost: $1,120.47 a month

Individuals share: $356.59 a month (up $42.12 from 2008)

Annual deductible: $300 per member or $600 per family

Routine physical: $20 for doctor, screening tests fully covered*

Well-baby care for the twins: fully covered*

*with preferred providers

A simpler and less expensive plan would be for the government to pay for all health care for everyone. The cost should be about $700 per month or $6,400 per year. This is in line with the cost of health care in Minneapolis. Doctors would be prohibited from earning any profit from business dealings with their clients, owning equipment used for treatment or interests in medical facilities. (This was the ethical standard of the AMA before the Supreme Court held that they were in violation of the Sherman Act).

Letter to Pete Sessions re health care

This post is a copy of a letter to Pete Sessions, U.S. Representative from my district in response to a letter he wrote to me, probably just a form letter. The paragraph heading are a paraphrase of his response.

Dear Pete,

Thank you for your response to my inquiry about health care. What is there about the current proposals you do not like.

You favor affordable health care for all Americans.
Included in most Democratic proposals.
Do you know what health insurance with a high deducible costs? About $3,000 per year per person. With 46.6 million people uninsured that’s $139,800,000.00 per year, $139 billion. You’re going to pay for that? (Granted some of these uninsured are so by choice, but since as a country we only allow 18,000 actually die for lack of medical care the health care costs for the uninsured are passed on to the insured in the form of higher charges for treatment.

You favor allowing insured to retain their current health care plans.
Included in most Democratic proposals.

You favor prevention and wellness.
Don’t we all, but this will cost money. How do you pay for it. 18,000 die each year, because they do not have health insurance. This is the ultimate rationing of health care.

You favor reduction in health care costs and suggest pooling.
If pooling had worked, large health insurance carriers are a form of pooling, why are costs rising for large insurance companies.

You favor equalizing the tax treatment for individuals and corporations.
Many of the Democratic proposals favor eliminating the tax favored treatment of health insurance enjoyed by large corporations. Is this what you mean?

You favor portability and uniform regulation of health insurance.
This is a provision in Democratic proposals.

As a member of Congress you enjoy a government financed health care program.
Why is this good for you and bad for the country. See, answer to question one for the reason that a government sponsored is necessary. Medicare costs 6% of the payout for administrative expense. A commonly quoted figure for a health insurance company is 25%. Some hospital administrators have told me that they spend 25% in additional costs to collect from health insurance companies. These numbers seem to be inline with the experience other industrial countries which spend about half what we spend on health care as a percentage of GNP. Incidently they also deliver better health care by standard measures of health care, infant mortality and longevity. Rich Canadians may come to this country for health care, but the poor don’t.

I expect you will be urging our U.S. Senators to vote in favor of the Democratic proposals.

Sincerely,



Ben Goff

Some have indicated that I have misstated Mr. Sessions position on health care. The following is a direct quote from the letter I received from him:

"Patient-centered solutions, not government programs, are going to be the driving force to insure nationwide equal-access to healthcare. Every American should have access to affordable health care regardless of health condition. If Americans are happy with their current health care coverage they should be allowed to keep it. Prevention and wellness should be advocated to all Americans to insure a healthier generation. In an effort to reduce costs, Congress should be promoting greater pooling options. Equalizing the tax treatment of health care dollars to allow individuals and small businesses the same pre-tax purchasing options that larger employers enjoy would help affordability for many that are currently uninsured. We need to promote portability and ownership so individuals are not tied to their employer health plans and can take their insurance from job to job and across state lines."

Did lawyers cause the crisis in medical costs?

Writing for Slate Timothy Noah suggests that Goldfarb v. Virginia State Bar
laid the foundation for one of the major causes of the present medical costs crisis. The reasoning is that the cause of the constantly rising cost of medical care is the physician owned hospital and excessive and unnecessary referrals for expensive testing. Goldfarb held that the practice of law and other "learned professions" constituted commerce as defined by the Sherman Act and therefore the lawyers of Virginia could not fix prices as this was "anticompetitive conduct." The entrepreneurial doctors, with no doubt the help of their lawyers, convinced the American Medical Association that the previous practice of restricting doctors from advertising, to selling drugs, or owning a financial interest in any lab or machinery they used to perform tests constuted an unlawful restraint of trade. What resulted was the unrestrained increase is medical costs. Great for doctors and the insurance trade, but driving the rest of us to bankrupcy.
The one reason the "silent hand" of the market place does not work to efficiently keep medical care costs down is that entry ino the the market of the "learned professions" is restricted by the state. The state controls entry in to the professions by requiring licenses to practice them. It is recognized that to practice the "learned professions" it is in societies interest that they have minimum levels of training. This monopoly is the reason the Sherman Act should not have been applied the Virgina lawyers. Perhaps the Court should have said that because the lawyers have a legal monopoly that they should not be allowed to fix prices to the injury of their clients. Now that the "learned professions" have sipped the honey of entrepreneueship, it is going to be difficult to get them to restrain themselves. Perhaps, the way to control medical costs is to either abolish their monopoly or for the government to take over some regulation of the profession by restricting their activity to practicing medicine.

Medical Costs

Although the central thrust of this blog is toward legal issues, I have submitted a number of posts concerning medial care costs and billing. Since most law firms are small and if they provide health insurance coverage for their employees, we are saddled with the highest medical insurance premiums as are other small businesses. Congress is debating reforms in the health insurance industry. The cost of health care has been rising at a rate far in excess of the general price index some where in the area of 7% per year. We have learned in Texas that restricting the rights of Texans by "med mal reform" has not reduced the cost of health care in Texas. Our health care costs are among the highest in the country. The expenditures for health care varies widely across the country. An article of in the New England Journal of Medicine outlines the problem. They have found the enemy and as Pogo said, "They is us". That is we just use more medical resources than the rest of the country. We use medical procedures that are more complex when simpler, and cheaper, procedures would be better. But we are healthier because of the use of these procedures, wrong. According to the Dartmouth study cited above by Katherine Baicker and Amitabh Chandra: "In fact, the four states with the highest levels of spending—Louisiana, Texas, California, and Florida—were near the bottom of the national rankings on the quality of patient care." We are not only not healthier, but are somewhat less healthy because of the procedures. All medical procedures carry a element of risk, hence, the lower result.
Another article, this time in the New Yorker magazine, pins the cause of the high costs of medical care on the doctors and their "entrepreneurial spirit". That is, where doctors act more like businessmen and less like doctors, their incomes increase, medical costs increase and patient care declines. Like most New Yorker articles it is long, but worth the read.

The cost to you of the uninsured

Cost shifting is adding $1100 per year to your health insurance premium.

How cost shifting by hospitals is killing the middle class

Hospitals are like hotels, there is the rack price (retail price), which is paid by to the uninsured, wholesale price, which is paid by the insured , and the government price that is imposed on the hospital. The system is not too bad for the poor as they will not pay the bill anyway and there is no way to force them to. Those uninsured with some assets faced with these outrageous bills are forced into bankruptcy. One third of all individual bankruptcies are caused by medical bills. This system fails those with modest assets and no insurance.
Those with insurance pickup the tab for the uninsured who do not pay their bills and the underpayment by governments by increases in their health insurance premiums. The employees of small employers are forced to pay the price reductions in health insurance that the large employers by their bargaining leverage are able to extract from their insurers.
In an article, “Predatory Hospital Billing: Dynamic Cost Shifting to the Uninsured” Robert S. Walsh M.D. presents how the middle class is being killed by hospital billing practices:

“Over the past year, aggressive billing practices have been exposed at a number of hospitals in the United States. Despite the fact that a widower had paid $16,000 of his late wife's bill of $18,740, some 20 years after the incurrence of the bill a teaching hospital held a lien on his home for $40,000 in interest. Many years earlier the hospital had seized his bank account, and now the 77-year-old man was destitute. Only tremendous publicity caused the hospital to back down. That same week, another nonprofit teaching hospital reportedly drove a 25-year-old uninsured woman from New York City while dunning her for a $19,000 bill for a two-day stay for an appendectomy. In California, a patient was forced into bankruptcy in 2000 by a for-profit hospital from a day-and-a-half stay in the hospital that did not include any surgery but totaled $48,000 in hospital bills. These have become common stories as hospitals aggressively market, bill, collect, and foreclose, just like any other corporation. The uninsured are facing the brunt of the hospital industry's billing practices.”

Morally wrong and fiscally unsound.

The New York Times this morning in a curious combination of op-ed pieces combines a plea by Nicholas Kristof for animal rights with a piece advocating no rights for people who do not buy health insurance by Ramesh Ponnuru.

Ponnuru concludes his article opposing universal health care with the statement; “Some people would, of course, chose to go with out it (health insurance). But that would be their call, as it should be in a free country.” In addition being a rather appalling moral judgment, it ignores those who would be without health insurance regardless of how cheap it is, because they would rather eat, those who are mentally so confused they cannot make a rational judgment, those too ignorant to understand they are making a choice, the spouse of a person who is too cheap to buy the insurance, those who because of their age do not have the right of choice, or the unborn who die because their mother or father gambles wrong.

There is good reason to question the assertion that cost shifting from the uninsured to the insured amounts to an increase in premiums of only 1.7%. In The Cost Shift from the Uninsured the writers claim the shift is 8%. The writer of the Times article does not name the article that is the source of his figure. The writer goes on to assert that government mandated insurance would specify the type of coverage that must be afforded as this was an evil. Without some criteria as to what constitutes “health insurance” the mandate would be meaningless. He then drifts off into speculation that these mandates would include fertility specialists and massage therapists and that we would end up with costs-shifting and no savings. Of course, there would be costs-shifting that is the whole purpose of mandated insurance coverage. To place the cost on medical care on those that elect not to buy health insurance rather than force the insured to pay the cost of the uninsured as the present system does.

Ponnuru then admits that a strong case can be made for universal coverage to see that the poor and near poor have decent medical care. He then seems to say that the cost would be less if we used clinics, reducing medical errors or nutrition. Government funded clinics would be an effective method of providing some medical services to the destitute, poor or near poor, but that is a more radical solution than mandated health insurance. It would involve an army of government employed doctors, buying the necessary equipment and housing the clinics. Reducing medical errors would certainly reduce medical costs, but how would the be accomplished, by another army of beurocrats to police the doctors. Lots of luck with that. Better nutrition would certainly help the poor, but that involves case workers to teach the poor how to cook and eat. This was done in the south in the 30’s with great success, but was abandoned when the war started. I doubt that it would reduce medical costs much. None of these things, good as they might be, address the cost shifting in hospitals where most of it currently occurs. The poor simply don’t go to individual doctors or clinics because of the cost.

Ponnuru asserts that universal coverage reduces the quality of health care or retards medical innovation. Since we rank 15^th in the world by the commonly used standards of health care and 1^st in the amount of money spent on health care, I don’t see that the present system is doing such a hot job. I do not think our lowered life expectancy, and high infant mortality rates are because our doctors or hospitals are inferior. They are because of the misdistribution health care.

Ponnuru would replace our present employer based health insurance with private individual policies. He proposing abolishing the tax deduction to employers and substituting a tax credit for individual policies. No employer would maintain a costly health insurance program if it was not tax deductable. A tax credit does no good if you aren’t paying any taxes. Who would pay for the health insurance if an individual is unemployed?

This is one of the worst articles written in a major publication concerning health care issues. It is both morally and fiscally unsound.

The Texas Supreme Court on April 3rd in Entergy Gulf States Inc. v. Summers has revisited a controversial decision allowing a premises owner to avoid common law liability by purchasing a workers compensation policy for the benefit of employees of a contractor. The decision is a mixed bag for employees. It will as the majority suggests encourage premises owners to buy workers compensation insurance covering a contractors employees while denying them the right to sue the premises owner. If the injury is not the result of the negligence of the premises owner then this is a good thing. If the injury is the result of the negligence of the premises owner, then it is bad. Whether the trade off benefits the employee more than the premises owner is difficult to measure. I suspect that premises owners will not rush out to buy workers compensation insurance. It is generally more expensive than premises liability coverage. It might have been nice for the employees to get both workers comp. and legal liability, but that does not strike me as fair. In reality there probably was no legislative consideration of the trade off since apparently the legislature was thinking about some other problem when they changed the statute, but this happens all the time. The legislature attempts to fix some specific problem, but inadvertently changes something else. The courts should, of course, not legislate, but the legislature should be more careful. "Words mean what I say they mean, said the mad hatter, "nothing more, nothing less".

Single-payer health care

If you are interested in a single payer health care plan take a look at HR676.org, Inc. A small investment of $10.95 could save you or your business a fortune this year. Employer provided insurance for a small business is experiencing an expected 23% increase in premiums this year. Single payer health care is the only thing that makes any sense. Make a contribution. You may not get another chance for 10 years.

Costs of having a poor health care delivery system

If was always curious as why if we spend more on medical treatment, yet have lower statistics for things like infant mortality and life expectency than some third world countries. The answer must be that these poor standings in the commonly used benchmarks for quality of health care are created by the our people who do not receive medical treatment. I don't think our doctors, nurses and hospitals are worst than Cuba. Untreated medical conditions cause a a variety of other medical conditions. They also cause a serious loss in time from work, reduced productivity on the job and shorten life expectancy. There the economic consequences of failing to have a medical care system that provides treatment to all the people. It is not a matter of "do goodism". It is just good business. The economic losses of the uneven distribution of our medical care it cause more economic damage than the current business crisis.
In addition to causing loss of productivity our current system by forcing our uninsured into emergency rooms without full compensation to the hospitals for the cost increases the insurance cost to the insured. There is no such thing as a free lunch. Assuming the uninsured could afford insurance, but chose not to and gambling that they would not get sick, passes the losing side of that bet to the prudent ones who secured health insurance. If you are wondering why your health premiums are going up, paying for the health care to the uninsured is a major reason. This is insane. Once we make the decision that we are not going to let the uninsured die in the street, then we must decide what is the most effectively provide treatment and how to pay for it. Emergency rooms are not a cost effective way to provide medical care except in an emergency. Forcing the insured to pay for treatment of the uninsured does not strike me as fair. For responsible businesses to pay for treatment of the uninsured causes our industries to be at a competitive disadvantage to industries in other countries who are not saddled with this costs.

Medicaid Subrogation

I may be a little late to the party, but this is an important case concerning Medicaid subrogation. Surprisingly, it allows the parties to a settlement to frame the amount that Medicaid will receive on their lien. Perhaps someone more versed than me can explain by the Cornell Law site uses the eighth circuit cite in the heading. ARKANSAS DEPT. OF HEALTH AND HUMAN SERVS. v.AHLBORN, 547 U.S. 268 (2006).The parties by agreement reduced the Medicaid lien by 5/6. The Court in upholding the allocation against an argument that the settlement was tainted stated:

"In any event, the aspersions cast upon Ahlborn are entirely unsupported; all the record reveals is that ADHS neither asked to be nor was involved in the settlement negotiations. Whatever the bounds of the duty to cooperate, there is no evidence that it was breached here. Although more colorable, the alternative argument that a rule of full reimbursement is needed generally to avoid the risk of settlement manipulation also fails. The risk that parties to a tort suit will allocate away the State’s interest can be avoided either by obtaining the State’s advance agreement to an allocation or, if necessary, by submitting the matter to a court for decision. Pp. 17–19."

Daylite ? Time

YglesiasYglesias makes the point that according to recent research not only daylight savings time not save any energy, but that it may even increase energy consumption. Has anyone studied whether by interrupting sleep patterns it may to a small extent make us less efficient until we had adapted to it? Also, how many appointments are missed; how much time is lost changing clocks; and how much energy is used conforming programs to meet these time changes?

Tip pooling doesn't meet minimum wage.

U.S. District Court in Texas rules class certified for bartender 'tip pooling' claims Article from: Lawyers USA Lawyers USA Article date: April 7, 2008 April 7, 2008

A bartender is entitled to proceed with a class action claiming the "tip pool" at various bars where he worked violated the Fair Labor Standards Act, a U.S. District Court in Texas has ruled in granting a motion for conditional class certification.

The bartender alleged that the bars where he worked implemented policies requiring bartenders to contribute 5 percent of their tips to their manager, despite paying bartenders only $2.13 per hour and taking a "tip credit" against their minimum wage obligations available under the Act. They were also required to pay cash to cleaning crews.

He claimed that the Act only permits tip sharing for distribution to "customarily tipped employees," which excludes managers and cleaning crews.

The bars argued that the plaintiff class should not be certified because there was more than one defendant and the other proposed plaintiffs were not "similarly situated."

But the court disagreed.

"The language of the statute is clear. An employer is obliged to comply with the prerequisites of announcing its intention to take the tip credit and allowing employees to keep all tips they earn except what is pooled for the benefit of customarily tipped employees. 'These prerequisites are strictly construed,' ...

"In the present case, [the bartender] contends that [the bars] did not comply with one of these prerequisites. Being that the prerequisites are strictly construed, [the bartender's] pleadings are sufficient to allege a violation of the [Act]," the court reasoned.

Further, "[d]efendants' argument that certification is inappropriate because they are separate entities [is] unconvincing. The Federal Rules of Civil Procedure allow joinder of defendants when a cause arises out of the same series of transactions and 'any question of law or fact common to all defendants will arise in the action.' The court concludes that joinder of [d]efendants is proper and does not preclude conditional certification of the class."

U.S. District Court for the Western District of Texas. Bernal v. Vankar Enterprises, Inc., No. SA-07-CA-695. March 24, 2008. Lawyers USA No. 9939548.

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Current unemployment figures

Brad Delong (http://delong.typepad.com/) has a current chart on the unemployment in various recessions that shows the current unemployment figures are worse that previous recessions. He doesn't think it looks good, but is easier to read than a similar one in the New York Times.

Apartment house fires

A Dallas county jury returned a verdict for the death of a mother and two children in an apartment house fire. Tex. Prop. Code Ann. § 92.259(a)absolves the owner from liability for failure to provide smoke alarms unless the tenant specifically requests an alarm unless the property did not have a smoke alarm at the time initial occupancy. The case involved the application of the National Fire Code and HUD regulations as they apply to persons who are deaf and the proper placement of the alarms. The statute does not require visual alarms in the case of deaf tenants although they are required by the National Fire Code and HUD regulations. The proper placement of smoke alarms is critical for the deaf since they must be within the line of sight.

"Message to Regulators: Bank Fix Needed Quickly": reminds me of the Yogi Berra quote: "If you don't know where you are going, you should be careful cause you may not know whether you get there."

Congress is silly

Congress has spent a week arguing about $100 billion in the president's stimulus package while the fed has dumped over 2 trillion thru its unconventional loan program into the economy without Congress letting out a whimper. The 2 trillion has not even made a dent in freeing up the credit markets. No wonder must economists think it would take over a trillion the get the economy moving again. Do they, Congress, really have any idea about what is going on?

Changing the banking system

Before the recent fad of encouraging a small number of large banks, we had a large number of small banks. To enjoy the economies of scale The number of banks declined during the 90's and continued in this century. We have now re-discovered the problems with large scale banking. If they make a mistake, they can bring down the whole economy. As the result of the large scale failures of banks in the thirties we created a system of smaller financial institutions of various sorts and limited banks to specific activities, Glass-Segal that separated lending functions from investment functions. Earlier home lending was done by savings and loan associations that further divided the lending business. In the 80's savings and loans were allowed to make more than home loans. This resulted in a massive failure of S & L's. This lead to more concentration of lending functions in a smaller group of banks. At about the same time several states eliminated prohibitions on interstate banking further concentrating the business. Then the concept of the bank "too big to fail rule" was developed that gave the large banks a huge advantage over small banks. It also created a moral hazard. Large banks could behave in a reckless manner knowing if they made a mistake they would not pay the price of the market place, dissolution. The time has come to reign in the large banks. There is an advantage of having a large number small players in an economic area. It is less likely that an unexpected event will affect all of them equally.