Story at the Weekly Standard.
I think it not unfair to say that Buffet is possibly conflicted here as he has a lot of his wealth tied up in insurance schemes.
Well in any case he may be trying to influence the Obama Administration and perhaps wear them down on how resilient they will be in defending the Affordable Care Act aka "Obamacare" in current budget negotiations with the GOP leadership crazies, which I see as a great threat to the status quo of current insurance schemes operating in at least the healthcare space.
Here's how Buffet sees it, notice his use of false metaphor (btw, it ALWAYS shows up from these morons, but I digress...) in his highly technical description of what our country's problem is, and how the ACA will not address this major problem:
"Healthcare costs in the United States are like a tapeworm eating at our economic body."
(Ed: LOL! It's a "tapeworm"!.... Cue the rubes: "Oh, yes, a tapeworm... now I get it...." I guess it is at least not "gobbledegook".... unbelievable.)
"Those words come from famed investor Warren Buffett, who said he would scrap Obamacare and start all over."
'We have a health system that, in terms of costs, is really out of control,' he added. 'And if you take this line and you project what has been happening into the future, we will get less and less competitive. (Ed: With who?!? Over what!? We're not under the gold standard anymore, what are we "competing for" you dope?) So we need something else.'
"Buffett insists that without changes to Obamacare average citizens will suffer. (Ed: What about the people currently without access?!)
"'What we have now is untenable over time,' said Buffett, an early supporter of President Obama. 'That kind of a cost compared to the rest of the world is really like a tapeworm eating, you know, at our economic body.'I'd like to see him try to explain his observed "problem" without resorting to false metaphor, I'll save him some time: He can't.
The only potential "problem" we might have as a nation is whether or not the REAL healthcare services and materials will be available to our citizens who need them, and Buffet makes NO ATTEMPT or even does he really seem aware of this reality in his attack on "Obamacare" here.
To Buffet, it is a "cost" or "financial" problem which we know is no problem at all for a nation that operates under a system of state currency.
Time to retire Buffet, do us all a big favor and go play golf or fishing or whatever it is that you do.
I don't think that's what Buffett means. Buffett's clearly stated in the past we can't go bankrupt as a country (he'd rate US debt "AAAA" if he could). He's said it's an inflation problem, not default.
ReplyDeleteWhat Buffett is concerned about here is that the percent of our gdp spent on healthcare is higher than other countries, and this % is expected to continue to rise. This is common knowledge among anyone familiar with the issue, which I am sure he is. He's concerned about competitiveness because he doesn't want such a high % of our resources going to healthcare, when other countries spend less on it and supposedly get just as good outcomes. We can debate about this, but I'm sure that's what he means.
A free market in health care, which does not exist now and will be more remote upon full implementation of ACA, would deliver better health care to more people at an affordable price than what is coming in the pipeline with ACA.
ReplyDelete@Rombach Report... The only way to get close to a "free market" health care system would be to get the employer based system out of the way. It seems this is what Warren Buffett is hinting at, as well as every other talking head when they refer to the "cost." Health care is a cost of running a business. The recipients of employer based health insurance don't have any participation in the "free market." They take what limited options their employers offer. Then they go to the limited options their insurance participates with. The worse part is workers take or stay at jobs that otherwise might not be otherwise ideal... all to keep their current health care at the cost of foregoing higher salaries or positions with more potential upward mobility. Nobody would ever design such a system from scratch, yet ACA doubles down on this ridiculous setup.
ReplyDeleteSingle payer pays funds to the patient and let the patient decide where to allocate those funds.
ATR,
ReplyDeletethen he is even more stupid than I thought...
Would he ever think that it is the insurance industry's cut that is making total system "costs" higher than other countries?
Ed,
If they stick with the "exchanges", then the way I look at it, providers will affiliate themselves and cut out the insurers...
My state (MD) is proceeding with the exchange no matter what (trying for $281/mo.) ... if Johns Hopkins and U of MD Med Ctr each led their own affiliated network, they each could cover the whole state for a fixed fee per enrollee... and "compete" against each other so a lid could be kept on things... all that would be missing is the income for enrollees to pay the premiums which can come thru federal fiscal policy... this is how I look at the "Obamacare"...
rsp,
Matt -
ReplyDeleteHah. Touche indeed. But there are a ton of reasons. If there is a problem, insurance isn't going to solve it alone. If you think he has ulterior motives, he could be trying to go after all the other reasons.
Replace "health care" with "military expenditure" and you've got an argument. The military is like a tapeworm in America's gut. The generals and their cronies in government and the private sector never get enough and always want more and more of the pie.
ReplyDelete"Would he ever think that it is the insurance industry's cut that is making total system "costs" higher than other countries?"
ReplyDeleteWhat do you believe is driving the cost up?
"What do you believe is driving the cost up?"
ReplyDeleteMultifactoral but the biggest driver is shareholders I think. Shareholders of pharmaceuticals, medical supply cos and insurance cos have expected AND received enormous returns the last 3 decades. The money to pay these shareholders comes form insurance premiums, as does the money to pay everything in health care. CEOs are probably the second biggest driver.
Bear,
ReplyDeleteWho cares?
If an MD says some test or procedure is necessary and the patient receives a favorable second opinion, then just do the procedure and pay everybody...
That is all it should be about...
Buffet is in "competition" with nobody and doesnt even know it...
rsp,
This comment has been removed by the author.
ReplyDeleteThe problem with the health care system as it currently exists is that consumers/patients have been dis-intermediated from the health care services and products that they purchase via their insurers which are provided by their employers.
ReplyDeleteFor example, back in the Spring my wife broke her foot and when she went to her primary care physician she was given a temporary sandal type shoe to wear until she could get to see an orthopedic specialist who gave her a cast/boot to wear to keep her foot stable. The bill she subsequently received for the shoe was for $42 and the boot/cast was $280 which was not covered by the deductible. My wife found the exact same boot/cast for sale on the internet for $54.
If the cost of health care is to be reigned in, then consumers of health care services and products will need to be put in the drivers seat and price what they buy before the buy it. Instead of Obamacare, why can't we choose among health care insurers from all 50 states? Why can't we buy insurance that would be like 5-year or 10-year or 20-year term life insurance that would lock in the price of health care over a defined time horizon? Why can't we have medical savings accounts that function like 401K plans that would be portable from employer to employer that employees could convert to retirement savings if they stayed relatively healthy? Wouldn't it make sense for people to be able to have a tax credit for all out of pocket medical expenses incurred in a given tax year.?
Healthcare as it exists now and especially where it is going is medical industrial complex fascism.
Ed that is the way the cost accounting works out, that is like the famous "$500 hammer" in the defense department.... it is sort of a straw man when folks throw those kinds of numbers at you dont be taken in...
ReplyDeletethe way I understand "Obamacare" is that the 50 states are to set up "Exchanges" where networks of providers can post offers for healthcare for uninsured citizens of the state...
So in my state even though there have been "delays" at the Federal level from what I understand the state is proceeding to stand up the exchange and press reports indicate that the state is shooting for a monthly premium of $281 for healthcare for uninsured citizens... not too bad if you have the income to pay it, and that can be handled thru fiscal policy just credit our citizens the premiums via fiscal....
then we have to find something for the people currently working in the insurance schemes to do we cant just let them twist in the wind either....
This situation needs INFORMED LEADERSHIP not some over privileged phony going around spewing corn pone aw shucks moron metaphors...
RSP,
The Weekly Standard has now added an "update" to the story clarifying that Buffet's comments were made in early March 2010, before the Affordable Care Act had been passed, and while it was still being debated.
ReplyDeleteThis is the interview the quotes came from. "Note his comments about Plan A, Plan B and Plan C."
Ed
ReplyDeleteI dont think people who want to choose health insurance providers form all 50 states fully grasp why they cant (although there are plenty of insurers who DO operate in all 50 states) The insurance comp them selves have tried to capture small markets and worked with state level regulators and hospital systems to do so, as I understand this. Yes Obamacare could stop this practice, but imagine the cries about "States rights" if this were to happen.
The nature of health insurance can set up some strange perversities where its actually better to have a smaller less diverse customer base then a larger one. If you get too many customers your chances of getting someone who costs you a lot goes way up.
Dan,
ReplyDeleteHighly duplicitous from Kristol & Co.... (btw one thing I always try to do even if short on time is check datelines) textbook propaganda tactic imo Herr Goebels would be proud...
Greg,
The way I look at it, the providers can form their own networks now that IT costs have been reduced to the cheapest in history...
Before, the insurers could be looked at as providing the information infrastructure and services to perform the 'networking' and 'back office' functions, with the advent of inexpensive IT, this is no longer necessary, we have all had to deal with this "disruptive technology" whether we liked it or not, no reason for health insurers to get a pass...
It is now the most possible point in history for providers/hospitals themselves to network and this looks like what is happening in my state... Here is a press report where Aetna has pulled out of the process here in MD because imo they simply cant compete with the providers themselves:
http://articles.baltimoresun.com/2013-08-02/health/bs-hs-aetna-maryland-exchange-20130802_1_maryland-health-connection-rebecca-pearce-individual-insurance-market
Here in MD imo two "competing" networks, one chaired by Hopkins and one chaired by U of Maryland Hospital can cover the whole state for anything anyone could need... the only questions are at what premium/mo. and where the "money" to pay the premiums is going to come from... MMT has the answer to the latter... its up to the Healthcare sector to come up with the first...
We'll see how this goes the Maryland exchange is supposed to go live in a few weeks... may be a test case for the nation....
If this works the insurers (like Buffet) are going to shit their pants...
rsp,
Here is a key excerpt from the Sun article I linked to above:
ReplyDelete"One other insurer, a new cooperative model, said it remains committed to Maryland's exchange.
"We are very much devoted to staying on the exchange. That's the mission for our entire insurance company in the first place," said Dr. Peter Beilenson, president and CEO of Evergreen Health Cooperative Inc., which formed in November and plans to offer two types of plans on the exchange."
Ive seen evidence of these types of recently formed networks (here the CEO is probably an MD...).... the doctors are cutting out the insurance middlemen.... basically, what modern IT systems do is provide historic capability to 'cut out middlemen'...
Look at the "for profit" stock exchanges its like Nasdaq has a breakdown every week now as that model looks to be failing and circling the toilet bowl...
Times they are a changin' Buffet welcome to the 21st century... he'll probably need another govt bailout for Berkshire again in a year or two...
I think Buffet would be sympathetic to single payer. He doesn't think the insurance companies are the drivers of high health care costs, but thinks the providers and suppliers are the problem. Single payer would mean that the government would have a great deal of control over supplier prices.
ReplyDeleteWell Dan if Buffet can get Washington to focus on "costs" and cram down the itemized costs of procedures, or even eliminate the prescribing of some procedures or even better start "death panels", then his margins will increase at least temporarily as any reduction in premiums will naturally lag the the govt mandated cuts in itemized "costs"...
ReplyDeleteLike this: negotiate premiums based on a certain level of care, go to washington Dc and get certain care prices reduced or even "outlawed", never have to pay for the care that was built in to the original premium, keep bazillions of premiums... rinse and repeat... this is all this phony MFer does...
So it behooves Buffet to keep pushing this "costs are out of control" mantra... it comes back to as usual that "we cant afford it" and/or "we are out of money" his whole philosophy here on "costs" is out of paradigm, what is his basis for claiming "costs are too high"? He HAS TO think "we are out of money" imo ...
Who cares about these costs other than either an insurance company or those who think "we're out of money!"?
Seriously, think about it: Only an interested insurer or someone who doesnt understand about state currency systems would be all riled up about "healthcare costs" in the US... everyone else just wants to get treatment when they are sick or in need of a corrective procedure....
And all the providers want to do is get paid for what they do... this is not unreasonable...
Only corrupt/morons could F this up... which is what we are witnessing...
rsp,
http://mikenormaneconomics.blogspot.com/2013/09/ellen-brown-armageddon-looting-machine.html
ReplyDeleteProvider, supplier, and pharma costs are a lot higher in the US than the rest of the world in standard measures. Health care is largely a controlled market with artificial pricing since there is little actual choice and competition and quality can be uneven and difficult to determine owing to lack of transparency. It's a ver imperfect market and it not suitable for market pricing the way it is presently structured with special interests dictating terms. Moreover, health care is increasingly recognized as a public good if only because so much of the research is government funded.
The government pays bottom dollar in Medicare and Medicaid reimbursements. Health care would be a lot less expensive with single payer if the same schedule is followed.
Single payer is really the only viable way forward in a competitive world in which other developed countries have universal care and shift costs to business and ration care by ability to pay.
Dean Baker has some ideas for reducing health care costs:
ReplyDelete"Drugs are cheap. There are few drugs that would sell for more than $5-$10 a prescription in a free market. However, many drugs in the United States sell for hundreds of dollars per prescription and, sometimes, several thousand dollars per prescription. There is a simple reason for this fact: government-granted patent monopolies.
The government gives patent monopolies to provide an incentive for drug companies to carry through research. This is an incredibly backward and inefficient way to pay for research. It leaves us paying huge amounts of money for cheap drugs. It also often leads to bad medicine.
We can do better – and Senator Bernie Sanders has proposed a way. He has introduced a bill to create a prize fund that would buy up patents, so that drugs could then be sold at a free market price. Sanders's bill would appropriate 0.55% of GDP (about $80bn a year, with the economy's current size) for buying up patents, which would then be placed in the public domain so that any manufacturer could use them at no cost.
This money would come from a tax on public and private insurers. The savings from lower-cost drugs would immediately repay more than 100% of the tax.
The country is projected to spend almost $300bn a year on prescription drugs this year. Prices would fall to roughly one-tenth this amount in the absence of patent monopolies, leading to savings of more than $250bn. The savings on lower drug prices should easily exceed the size of the tax, leaving a substantial net reduction in costs to the government and private insurers."
http://www.theguardian.com/commentisfree/cifamerica/2011/may/31/healthcare-pharmaceuticals-industry
"doctors in the United States earn on average about twice as much as their comparably trained counterparts in Western Europe and Canada.They earn five to ten times as much as doctors in the developing world.
If the government were to set up mechanisms that could fast track the certification of doctors from other countries so that they could quickly establish that they have been trained to U.S. standards and then would be free to come to practice in the United States just as any native-born doctor, it is likely hundreds of thousands of doctors from around the world would quickly take advantage of the opportunity. (In the case of developing countries, it is easy [even a DC policy wonk could do it] to design mechanisms where they would be compensated for doctors who came to the United States so that they could train two or three doctors for every one that came to the United States. This would ensure that developing countries gained from the arrangement as well.)"
http://www.cepr.net/index.php/blogs/beat-the-press/doctor-shortage-nyt-has-never-heard-of-qimmigrationq
I have a friend who was a nurse and then nurse practitioner and then a professor of nursing at Georgetown. She finally got fed up with the BS that MD's dish and decided to apply to med school. Of course, no US med school would take her in her late fifties, so she applied abroad and was accepted. She graduated some time ago, finished her internship and residency in the US and is now practicing here. I recommend her to everyone living in her area since she is also into alternative medicine in addition to allopathic.
ReplyDelete"we will get less and less competitive. (Ed: With who?!? Over what!? We're not under the gold standard anymore, what are we "competing for" you dope?)"
ReplyDeleteThe gold standard is completely irrelevant to the fact that health care costs can be too high.
"The only potential "problem" we might have as a nation is whether or not the REAL healthcare services and materials will be available to our citizens who need them"
That's the real cost, and the real cost can be too high, for any number of reasons. The point is to try and reduce real costs if they are too high.
Even if you have a 'fiat money', costs are still important.
Business will have higher labor compensation costs than other developed countries where businesses don't contribute to health care, since government picks it up. That raises the price of US exports making them less competitive in the market unless US firms cut profit margins to compensate for their higher prices due to higher costs. Or reduce other factors affecting compensation. What typically happens in the US is that firms suppress wages to keep compensation cost relatively constant as it has been in the US. As health care has risen wages have stagnated or fallen, reducing demand and forcing borrowing to sustain living standard. Now many people cannot afford that level of borrowing are the housing bubble burst, and the living standard is declining as more and more people slip out of the middle class and poverty grows in the US.
ReplyDeleteIf you want to reduce health care costs look to supply & demand. Doctors, nurses and other health care professionals should be incentivized by getting a tax credit for donating their time and skills on the cheap or for free at local clinics. More insurance companies need to include alternative medicine in their coverage like acupuncture and medical marijuana to help break the strangle hold that big pharma has on health care.
ReplyDelete"the strangle hold that big pharma has on health care".
ReplyDelete"There is a simple reason for this fact: government-granted patent monopolies."
"There is a simple reason for this fact: government-granted patent monopolies."
ReplyDeleteWake me when big pharma comes up with a way to patent the medical benefits of marijuana. Have a look at what the National Cancer Institute has to say on this topic
http://www.cancer.gov/cancertopics/pdq/cam/cannabis/healthprofessional/page2
Wake me when big pharma comes up with a way to patent the medical benefits of marijuana.
ReplyDeleteThat's an easy one. Standardize the dose. The big complaint I hear from users of medical marijuana is that there's no standardized dose.
There's also no quality control.
"The big complaint I hear from users of medical marijuana is that there's no standardized dose."
ReplyDeleteNot true Tom. States that have passed medical marijuana laws provide regulatory guidelines to one degree or another on product grade and dosage. Besides, do you know how many deaths have occurred from overdose of marijuana? ZERO.
Not what I am hearing, Ed, because without lab standardization, different batches of the same amount have different potency.
ReplyDeleteThis is important to people who want a minimum dose for their issue that doesn't affect their consciousness.