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Making things perfectly unclear on health care reform

Just watched President Obama's press conference, most of which was devoted to discussion of health insurance reform. I was astonished to hear Chuck Todd of NBC news come on in the aftermath and say that one item of "news" from the event was that the President had said only people with incomes of $1 million and more would be taxed to pay for reform. I could have sworn I heard Mr. Obama say that taxing people with inomes over $1 million is one proposal that has been offered in one of the Congressional committees, and that that proposal satisfies a fundamental principle of his--that reform not further burden the middle class. But I don't believe the President said that this proposal was signed, sealed and delivered.This is a small example of what has become a big problem in this health insurance reform debate. It's a big, tough, complex thing--sort of like the bills one gets after a hospital visit. If the American people are having trouble making heads-or-tails of the various proposals and the bargaining, it is at least in part the result of reporting like Todd's. We in the media should be clarifying things, not confusing them. Ours is supposed to be a discipline of verification.

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...while you are at it please try and clarify for me what exactly Washington politicians think the middle class is anyway... Below 1 mill??? How about - the real world...like 100 grand??? What is the "middle class" for those in DC. Somebody please clarify????

The television media's performance on the health care issue, like its performance on some other issues, has been all too often marked by trumpeting the distorting sound bites of anyone who would make an "attack," as opposed to a considered criticism. Once again, the tv media appear to promote fights instead of thought. It surely smells like their approach is to make their news show resemble the food fights on court tv or "reality" shows. All this clothed in the guise of "objectivity."If you pollute the usual channels of communication, you promote a cynicism in the populace that frustrates efforts to formulate sensible public policy on complex issues.

If you define the middle class as being included within those households in income percentiles 20 through 90, according to Congressional Budget Office data this would represent 78 million households or 70% of the population. The most current income data is for 2005. It shows that the average annual income per middle class household was $69 thousand. The range was bounded by a low of $18 thousand and a high of $126 thousand.

Bernard is right!Media with the need to fill news promotes mantras, spin and semantics over fcats.Even threads may have been based on these on the internet.

Had the same response to Todd's post-presser stand-up. I preferred his work during the campaign.

Charles Ladner: my instinct would be to set the floor for middle-class a lot higher than $18K/household/year. Whereever government bureaucrats set the bar for poverty level, that is poor!

JimI agree. I was pretty surprised when I saw the data. The information is available in the CBO report entitled Historical Effective Tax Rates 1979-2005 updated on Dec. 23 2008. What is even more sad is that 20% of households are below $18 thousand/year.

This might be worth your time to read:http://www.blackagendareport.com/?q=print/content/obama-health-care-plan... Dixon is managing editor at Black Agenda Report, and can be reached at bruce.dixon@blackagendareport.com

Going on ten years ago, complications after surgery for colon cancer required me to spend eighteen days in the hospital. A month or two later, I received a notice from my health-insurance carrier which indicated that the cost of my hospital stay was $78,000 and that my plan would pay $19,000. If it had not been said in big print at the top of the page: THIS IS NOT A BILL!, I would have had a heart-attack at the thought that I had to make up the difference. Instead, it said: "Your responsibility, $0.00." Now, what was going on here? Why would the hospital be content with only about a fifth of its stated cost? Or did they inflate the cost because they knew that the insurance plan would only pay a fraction of it? But isn't there something crazy in all this? Would Obama's health-plan fix it? I find it all very confusing. And I have to admit that learning that the pharmaceutical industry is in favor of the President's plan makes me very nervous.

"Now, what was going on here? Why would the hospital be content with only about a fifth of its stated cost? Or did they inflate the cost because they knew that the insurance plan would only pay a fraction of it? But isnt there something crazy in all this? Would Obamas health-plan fix it?"The relationship between a hospital's actual costs and what they charge is called, naturally enough, the cost to charge ratio. Hospitals mark the prices up above costs between 120 and 1000 percent. On average, they probably mark up about 300 percent. One of the things that an insurance company does is get discounts with hospitals (and doctors) so that you don't have to pay the full marked up price (known as "billed charges"). When a hospital has a discounted contract with an insurance company, the hospital is called "par". If it does not have a contract it is called "non-par". If you go to a non-par hospital, since it does not have a discount, you will usually have to pay the difference between some minimal amount that the insurance company will cover (something close to cost) and the billed amount.Do insurance companies know costs? Yes. In fact, hospitals are required by law to give both their costs and cost to charge ratios to the government if they do any Medicare business. This information is available on the web, but you would have to pay for it.Remember what I said on another post that Medicare pays, like 90 percent of costs, commercial insurance about 120 percent, Medicaid (depends on the state) about 30 percent of cost, and any "not for profit" has to do free care for the indigent in order to quality for that status. So the net for the hospital is a relatively thin profit margin of maybe 2 to 5 percent in a good year, although there are serious exceptions both ways.Hospitals have contracts and then try to inflate their underlying charges to get more out of them. It depends on what the contract is like. Hospital contracts with insurance companies will typically have some rates for services that are fixed in some way and others that are "percent of charge". In the case of the percent of charge contracts, the hospital can then give itself a raise by raising its underlying charge. Your insurance company still gets a discount, but it is a discount off of a higher base charge. Some states, like Wisconsin, requires hospitals to publish their annual charge increases with the state and you can look them up on the internet. We believe in the insurance industry that this keeps Wisconsin hospitals from doing double digit increases very often. But the average annual charges increase for hospitals is 13 percent, with ranges from zero to 60 percent. This is one of the many drivers of costs. The Obama plan can't address it because the government can't tell hospitals what they are allowed to charge people.

Thanks for this information. But it still makes my hair hurt. Isn't there a simpler way of doing things?

Yeah, there probably is a simpler way of doing things. But always remember; you can't fix a market. You can only make another market. The free market is a dike that always has three holes while you always only have two hands.

Very interesting stuff, Unagidon.At what point did hospital business become a for-profit enterprise? I think I recall reading, back in the late '70's - early '80's time frame, that for-profit health care was becoming a big and growing industry. Prior to that, it had been my impression that hospitals were primarily run/owned by local communities and religious orders, i.e. not-for-profit. What is the split right now between for-profit and not-for-profit?

I'm not sure what the profit/non-profit split is. You are right about the past when a lot of them were run by communities and religious orders. The religious hospitals (Catholic and Protestant) now in my experience tend to have the toughest negotiators and the nuns are the toughest of all.

I'll also mention it again in case I wasn't clear. Profits and not for profits are run exactly the same way by graduates from the same business schools.

I uspect the last commen tis quite right.We went from non-profit to profit a while back and the business manager is a regular member of our senior advisory group.Ther ecertainly has been motre investmen tby the for profit in capital improvements and trying to add more doctors and nurses in the critical time of shortage.But, more business, more profit.

"Ill also mention it again in case I wasnt clear. Profits and not for profits are run exactly the same way by graduates from the same business schools."Then it's very different than network television!If I can make this observation without the cyber-roof caving in, because I'm usually a proponent of the efficiency and creativity of the marketplace: it's not clear to me that stockholders should be a primary constituency - or any constituency whatsoever - in the delivery of health care.The nuns are tough, no doubt, because unlike some for-profit providers with whom they must compete in the modern marketplace, they don't screen their clientele by ability to pay, and so they need to account for every nickel of expenditure. Or so I would imagine to be the case.

"If I can make this observation without the cyber-roof caving in, because Im usually a proponent of the efficiency and creativity of the marketplace: its not clear to me that stockholders should be a primary constituency or any constituency whatsoever in the delivery of health care."Let me help rock your world. The stockholders don't matter in any business unless they are on the Board or in the ranks of management. But they do make convenient scapegoats.

There is NO free market in just about anything. There are marketplaces, all of which are manipulated by those with the power to do so."Free market" is one of the many myths that Americans have heard repeated often enough to the point that they actually think it is gospel.

True. And it's too bad that so many of the same people don't think the Gospel is gospel.

I watched Bill Moyers last nite. If the pharmaceutical and insurance industries are for healthcare reform, what's in it for them???When it comes to healthcare, roads, airports, police, firefighting, ems, etc., I've pretty much concluded that profit has no place in provision of essential human services.We need single-payer, universal coverage. I'm lucky to have my FEHBP coverage to which our illustrious (lol, lol, lol) Mitch McConnell also has access. It's just that HE doesn't want the rest of you unfortunate folks to enjoy what HE has!!!HE is for the "little guy" (or so HE has enough Kentuckians believing).(Yeah, and I can sell you some stock in an orange bridge out in California :)

-GoodNYT editorial today on what health care reform means if you've got coverage now.-I have little optimism about the reform however because,:-politics (bring Obama down) plays a significant role-big moneyed lobbyists play an even more significant role-and, per James Thurber in todays's Week in Review, the ideological center has collapsed in the poltical world that wants to say it's bipartisn.