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Wednesday, April 1, 2009

This is what happens when anything goes meets enough already!

Today the global brain trust met to solve economic conditions. Much like the little Dutch boy our economy explodes a new hole with each attempt to stick the finger in the previous hole. In the future I would like to refer to Timothy Geithner as the “little Dutch boy, it is a fitting title for his role in attempting to solve the economic woes here in the US. Remember the little Dutch boy is the ONLY mind in our entire society who can solve our problems (this character portrayal was hammered home directly by Pres. Obama).

However today I would like to discuss Health care as it remains a staple of change in the new administration’s plan. As with any apocalyptic and fundamental change one must start with a villain (remember just recently how AIG was villainized while the Treasury used the misdirection to print 1 trillion dollars to give out to the banks) and in the case of health care the portrayed villain is the Insurance industry. This falls under the category of it is successive repetitions that do the work. A falsehood often repeated gets to be believed.

I will show you how incredibly deceptive it is to hold the insurance industry in contempt for the present state of health care. The following are real facts (something neither the administration nor the media are fond of using) and said facts are from the Health Insurance trade organization (AHIP) “Factors Fueling Rising Healthcare Costs survey, published by PriceWaterhouse Coopers.

If you have any experience with small businesses or employers of such then you would know that claims represent about 85% of the overall costs to the business. According to the survey, the 2007 figure was 87%. Physician and clinical services grew by 5.5% in 2007 and accounted for 33% of all health care expenditures the largest single segment. These services also accounted for 1.8% of the 6.1% increase in private insurance premiums. So 1/3 of each health care dollar spent covers the cost of your doctors and the testing they perform.

Hospital inpatient costs were the second largest segment, representing 20 cents of each dollar; in 2007 these costs grew at 7.5% and made up 1.5% of that 6.1% increase in private premiums.

Coming in a close third, and representing 15 cents of the dollar, were hospital outpatient costs, which grew at an annual rate of 8.2%, the highest growth rate of any of the segments. This is consistent with the down lining of many procedures that once were completed in large multi-specialty hospitals and which required admission and those nasty additional costs that are associated with overnight stays. From the consumer viewpoint this trend is a good thing. However the trend did represent 1.2% of the overall growth in premiums.

Remember we are at the fourth largest portion of the health care dollar and we still have yet to discuss insurance companies (the perceived villain of the Obama, and Hilary Clinton camps). Overall prescription drugs’ spending occupies this fourth largest segment. In fact the report points out “Prescription drugs had, in the past few years, been the fastest growing component of health insurance premiums, reaching well into the double digits.” (None of the administrations past or present wants to create a more competitive environment for prescription drug costs) Any audit of annual claims reports zeroes in on prescription costs. Even with the slowdown in overall spending, drug costs still grew by 5.7% in 2007.

The next 5 cents of the health care dollar were spent on what the survey calls “other medical services.” While these costs were relatively modest and grew at a reasonable 3.8%, they still accounted for more than our villains the insurance companies took in.

Government payments, compliance costs, claims processing, and other administrative costs account for the next 6% of spending, with an additional 4% to consumer service, provider support and marketing.

If you are keeping the math only THREE cents of that dollar is left. And that is the amount pocketed by the insurance companies. Of course the administration wants us all to believe that these are the villains in health care costs. Does anyone reading this really think that saving 3 cents is going to somehow solve the problem of rising health care costs? Of course it won’t!

Premiums continue to rise as they reflect cost increases in the other 97%, thus the insurance companies stay at the 3% spread. The study gives this perspective: “While premium increases have lowered, there are still major concerns about underlying health care cost increases continuing to outpace inflation.” In conclusion, both utilization and price increases in excess of inflation contribute to health care spending increases. Those factors are the Cause of the increased premiums. So insurance companies are simply staying inside the 3% margin they have always worked at.

It is difficult to refute nonsense that is repeated constantly by media and government leaders, of course unless it is refuted by the facts. Deception is never truth no matter how long you tell the same lies; of course people need to be aware of the facts as they are not going to be produced by a self-serving ideological agenda. You must ask yourself if you want the government to supply your health care. Can the government truly deliver a better and more cost effective product? When has the government EVER delivered a better and more cost effective product (just look at Military appropriations and ask yourself is this really who I want providing my healthcare?) Better yet look at the Postal Service now there is a monument to a Federal Government run business, would you like your healthcare delivered with the same magnificent competence that the mail is delivered with? That reminds me, it’s almost 3pm and my mail should be here at any minute.