Health Care Costs Explained
ฝัง
- เผยแพร่เมื่อ 6 มิ.ย. 2013
- Actually I mispoke. The monthly premium on the major medical policy my father sold in the 1960s was only $2 per month, not $5. Adjusted for inflation, that would be about $20 per month in today's dollars.
The Peter Schiff Show (6/6/2013)
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Thanks for accepting my call today Peter. Your answer was nice and straight forward. I knew you would have some good explanations.
*$*
Health care, housing, and education. The three areas that have huge problems in this country. Coincidentally, the areas in which the government is most involved.
Thank you again, Peter. I just recently had a conversation with my Dad, who told me that I cannot afford health insurance. I told him that the reason its high is because of government subsidies effectively 'bidding up' the price of health care. Ditto with college.
My fellow countrymen are sheep and have signed us all up for slavery. Thanks, bros. Still love and tolerance, but seriously. I'm. A. Slave.
I can tell you first hand what happens in a socialized health care. You pay double or even tripple and you wait, a lot. First we pay our monthly health insurance that gets extracted from every paycheck, than you (can) pay extra insurance, AND then you pay again for every "extra, out of the ordinary" procedures (ex. getting a white tooth plumb, instead of metal one). And what is best, you can wait 6 months or even more to get your turn, your medical procedure. Its a terrible system indeed.
I'll have to join you guys in your "libertarian revolution" even though I'm Canadian. I swear just by learning from Peter what ails America makes me see clearly what our problem is up here. I am so NOT a Socialist at heart !!
It's amazing how many people are convinced, TOTALLY CONVINCED, that it's the "market" that has caused healthcare prices to rise.
I'll give you another example of federal govt interference... for 20-30 years, my small local phone company charged $8 per month for local service, one of the lowest rates in Missouri. The phone company, the customers, the MO PSC were happy with it, Then, in the last year, the FCC made a power grab and began dictating what my phone company should charge for local service. It's now $14. The reason given... your rates are TOO LOW. They need to be at natl average. No other reason given.
"Insurance companies have to compete." To an extent. There are state insurance cartels set up by state legislatures that prevent the purchase of major medical insurance across state lines.
Also, all of the mandates make your choices very limited, because all of the insurance companies have to provide certain coverage whether consumer wants those things or not.
The govt. also creates regulates designed to make barriers to entry.
We don't have a free market in health care or insurance.
If you think dentistry has little government meddling, try opening up shop as a dentist without a permission slip from the government (which takes 6+ years to get).
Also, I think the tax incentives for employer-funded dental insurance cause more to be purchased than otherwise would be.
The health care industry collects a lot more than $15 (which is the true cost) because it can, thanks to government granting them a monopoly.
To speak in Peter Schiffs words: if supermarkets where treated the same way as health care is treated, you would have to wait 2 months to get your six-pack of beer because your purchase would undergo 10 levels of bureaucracy, administration and signature approvals.
"Republicans get money from lobbyists." Yeah, D's never get money from pharmaceutical companies and health insurance companies.
What would happen if the govt. created a third party payer system for car insurance? Govt. programs or your employer payed for premiums. How would people respond? Well, they would buy more expensive cars. They would try to cover routine care with insurance. They would replace parts before needed and buy most expensive parts. Same thing has happened with health care.
You're making my point ! Competition can only occur in a free market where government does not involve, disturb and create monopolies.
I live in socialist Denmark, and I'm really fat. So seven weekes ago, I decided to start juice fasting, eating no food, drinking only juice. Then I went to the doctor to get checked out, which was free, and he said that I needed to get my liver checked out at the hospital for free. The soonest time at the public hospital was 3 months. I then called the private hospital, and they fit me in two days later in the evening, so that I didn't have to miss school. Cost 300 USD.
people don't realize that if it would be the market that made healthcare unaffordable, well, nothing would be affordable..
I misread your post, however, government IS more involved then ever in the airlines and the cost to fly is more than it would be if it was not so.
Just an example: Dutch government makes me enslaved by obstructing my free life. I run an internet company and live in many places, due to that I can not "profit" from dutch morgage-detuction because I own 2 appartments outside of the Nethaerlands. The government makes you an obedient slave, by first heavily taxing you and then granting you money when you fit to their rules. They enforce you to live a standard life, where free movement and entrprenneurship is pinished.
"you would have to wait 2 months to get your six-pack of beer because your purchase would undergo 10 levels of bureaucracy, administration and signature approvals."
No. It's that government would fix the price of things such as beer and breweries would find that it is not profitable to brew beer anymore and there will be shortages. This is why you would have to wait.
Now a ultrasound is a grand
It costs a person hundreds of pounds a week to be kept in a care home for their last days on earth, Some of these people, if not most are treated worse then prisoners
My grandfather escaped from one before he passed away. Well, it wasn't much of an escape he walked out the front door and took the bus back to his & my grandmother's house. How did none of the staff see him lol these places are a joke
Good job, Peter! Keep it up.
While I can't speak on how Medicare was when it was first enacted, I can explain how Medicare has been for the past 20 years. First of all anyone making income tax is paying Medicare taxes and these taxes are being used to fund current recipients. Medicare Part A is only free if you paid Medicare taxes for 10 years and Medicare Part B has a monthly premium that every seniors pays which is $144.60 in 2020 and this amount usually increases every year between 5% to 10%. Medicare also is not first Dollar coverage. Medicare Part A has limitations on the amount of covered days in the hospital, doesn't cover nursing home care, and covers outpatient surgery at 80%. Inpatient care has a large deductible and this deductible resets every 90 days once you have been discharged from the hospital. After the deductible has been paid, Medicare pays the balance. Medicare Part B covers doctors. All items under Medicare Part B are covered at 80%. Now why doctors and hospitals limit the number of Medicare patients that they see is because of Medicare's fee schedule which is how much Medicare will pay the hospital and doctor for the work they provide. Since 2000 and beyond, Medicare's reimbursement amount is on average about 1/3 the normal rate of what doctors and hospitals normally charge. If a doctor or hospital accepts Medicare assignment they must accept the payment that Medicare gives them as payment in full and cannot charge the patient the difference. They must write that difference off as a business loss. This is one major reason why medical costs are skyrocketing for people who are not on Medicare coverage. The hospitals need a set amount of money to operate and if Medicare is ripping them off, they need to rip off their other customers to make up the difference. I have been in the Medicare health insurance industry as a broker since 2006 so I know what I am talking about. Not only does Medicare offer low pay for medical providers, but they also audit these providers for fraud, waste, and abuse which makes hospitals and doctors extremely paranoid and they code things and perform medicine in a way that is unnatural in fear that Medicare will try to take those small payments back in the future. This has let to hospitals no longer admitting many patients into inpatient care and instead put them in observation which is outpatient in fear that Medicare won't like the assigning doctor's logic as to why the patient was admitted as inpatient. This has caused Medicare to deny coverage to seniors who need skilled nursing care, because in order to qualify for Medicare coverage of skilled nursing care the patient must have been admitted as inpatient hospital care for at least 3 full days or Medicare will deny coverage for skilled nursing care.
The example of Peter's grandmother is further magnified by once it was free they showed up two to three times as much to get some of it. Where if they had to pay themselves they would not go for frivolous reasons.
I love Peter Schiff!
A good example of how finel an open free market can benifit to humanity is air travel: Nowadays you can fly from London to Rome for $29, while it costed a fortune in the 60s (same Boeing, fuel prices much lower back then). I wonder how much a London-Rome ticket would cost, and how well safety would be, if government had ruled that air travel is too important to leave it to the private sector...
exactly, if people knew half of what goes on in South America, they would kiss the ground here
Exactly. When the consumer is removed from cost (partially or in full) he will overconsumer. Providers know that people are removed from cost they so prescribe the most expensive drugs. They run unnecessary tests.
The third party payer system needs to go.
We also need to get rid of restrictions on purchasing medical insurance across state lines.
Insurance mandates are another factor that drive up cost.
One word. "Standard Oil". At times, they sold oil BELOW COST to cut out competitors.
How is that a bad thing?
Why would you think it would be any less safe or more expensive? There were much fewer air planes in the 60's and technology was much more primitive. Government has nothing to do with advancements. When a plane crashes, it not only hurts the reputation of the airline, but it also costs a lot in damages and liabilities. This is why it is in their best interest to make their planes as safe as possible. Competition drives prices down and so does efficiencies in engine design.
Moores law is just a way of explaining that increasing supply lowers prices. It's not about how many micro-chips you can fit on a wafer. The cost of the micro-chip has the least effect on the cost of the end product. The most expensive part of the process is assembly. Like I said though, if you're the only one making a certain product, you can charge a lot more for it. If someone else makes it and they undercut your price, you have no choice but to lower it or not sell anything at all.
It was the greed of the practitioners & service providers which led to the increase...
Drinking game: take a shot every time he says the word “government”
4:50 - If you think the costs of healthcare are high now, you ain't seen nothing yet!
Not being a dentist, I don't know how many hoops they need to jump through, but I do know that good dental insurance is damn hard to come by. I brush and floss after every meal and in the morning and night, am 43 and have severe dental problems. I guess I was just born unlucky. But it sure is expensive.
Same in Portugal. Healthcare, as any other product or resource, is not infinite so you have to ration it via price system or via waiting list. Also, the fact that public healthcare is 'free' just means the patient doesn't pay, the taxpayer does. It's not 'free' at all.
Lol it's the same reason why college tuition fees are high too.
If you buy electronics you can decide if you buy the most expensive one or you are satisfied only with an average piece. If its about the healthcare would you be satisfied or would you like to risk anything less than best service available ?
need a 100 year historical chart showing the percentage of Americans who were covered by some kind of health insurance.
"government IS more involved then ever in the airlines"
Give me ONE example of how government is involved in the airlines, I bet you can't.
Do they subsidize the planes, the pilots, the hostesses, the fuel, the tickets ? Do they subsidize the airports or traffic control? No, travellers pay the airport tax and make them thrive by shopping. Government only profits from air travel and does not contribute a single dime.
Lets not forget that the last few areas of health care that are oriented by free markets are still vastly cheaper, efficient, and easier to access. Namely LASIK and plastic surgery.
The only way government IS involved in air traffic is by NOT heavily taxing the fuel or the duty-free shopping ( I doubt if it's duty-free, prices aren't really lower ).
I never said competition had nothing to do with it, but rather that the main reason technology prices have gone down is because of Moore's Law. Some capitalists seem to think that the primary reason why computers continually improve and go down in cost is because of free-market competition; this, however, is not the case. Competition only plays a relatively minor role in explaining improvements in computers.
how much is the mentioned $5 fee for medical insurance corrected for inflation?
Why are these procedures so expensive in the first place? These procedures wouldn't be sold at the price they are if no-one was there to bear the cost. It is only when people are spending their own money - as opposed to having it forced from them and spent by government - that they care about how much these procedures cost; which in turn should put pressure on suppliers to reduce their prices
"Greed of practioners and service providers." Is there some special about cosmetic surgeons and lasik eye doctors that costs fell in those areas for many years? The difference between those areas and others is that they are outside of the state managed care system. Those areas aren't mandated and they aren't covered by the third party payer insurance system. As a result consumers are not removed from cost. Providers must then compete on price.
[cont]
If you make your product better or with more features, your competition will either have to make their product better or significantly lower their price. The price and quality of products are basically a war between competitors who have to please a finite amount of customers who are interested in that particular product. If I make a product and don't keep up with technology, I may have to significantly drop my price or the product altogether if a competitor has a much better product.
I have a question. Couldnt insurance companies work together and raise the price like the government does if the government is removed from healthcare.
Murray Rothbard cobers this in Man, Economy, and State. He talks about the limitations places on cartels in a free market. Very unlikely that a cartel could form and cooperate over the long term to fix prices.
If the government is removed from healthcare? No. They need the government to force any potential competition out of the market. Insulin in the US cost 10 times more than in Mexico because the government says it's *illegal* to sell insulin unless FDA allows you specifically to do it. There is no coincidence or oversight there. This is *by design*
Dentistry is an area of HC where there is very little insurance coverage and government meddling and yet dentist care is extraordinary expensive. If you get an abscessed tooth, you are looking at around $1000 for just the visit, an X-ray and root canal (assuming a molar). If you need a cap, that's another 5-700 (depending on what tooth it is).
"Couldn't afford medical care today." It's more expensive precisely because of the state managed care system.
All of the technology and productivity gains would have lowered health care costs if not for all of the central planning.
The third party payer system removes people from cost. So: They overutilize. Providers don't have to compete on cost so they don't worry about it when insurance picks it up.
State mandates and govt. created insurance cartels also drive up cost.
"Govt. pays very little to doctors who take Medicare/Medicaid." Yes, that's part of the reason why some doctors don't take Medicare/Medicaid anymore. The full cost is just transferred to the rest of the doctors patients.
"No one want a doctor anymore." Puh-leeze! The cost are high because of the subsidies. The cost are high because consumers have been removed from cost. That means overutilization. Providers don't have to compete on cost so they charge all they can to insurers.
I would like to see a more technical analysis of how much of US healthcare spending is insurance/Government and how much of it is cash, also how much of the total goes towards routine procedures VS unexpected or catastrophic ones.
This would help predict how quickly and by how much a simple, dregulated system would cut costs.
It's a lot to ask, but if someone has any links to such an analysis - it would be appreciated.
Yeah, they are real sweethearts
The reason why technology prices go down is mostly because of Moore's Law, which states that transistor densities on ICs double every 18 months.
To start with, like Schiff says, insurance must be kept to a minimum: only insurance for "catastrophic" things like a heart transplant must be insured.But if you want a pimple removed, your ears syringed, simply pay it yourself, no big deal. Even the poorest can pay that, certainly when those things are in a performed in a free market: You can get your ears syringed for $15 instead of the $200 the doctor now bills to public health care.
Pure emotion. Zero logic.
That's liberalism.
We don't have a "free market". We have a market that is assumed free with Fascist ties.
Gov't regulations on the nuclear industry drive up the cost significantly of nuclear medicine, there are only 2 suppliers in the world of the isotopes required but because the heavy water reactors which produce them are illegal here we are forced to pay for an artificial shortage of its supply.
My comment was a joke, as I assumed your original comment was, because most things sold at Wal Mart are products of China.
I realize that most Wal Mart employees are eligible for food stamps. As far as health insurance, I was not aware that a Wal Mart employee could afford such a thing, qualifying for food stamps and all, and Medicaid requires you to earn less than around $700 per month and Medicare requires you to be retired or disabled. Seems they have no insurance to me.
Yes, . . . the citizen simply fails to apprehend the actual pervasive burden in cost of governmental employees, . . .
Sounds the same as Canada; it may be free, but the quality and timeliness is not there, you have to pay for that
"Greedy doctors and insurance companies." Yeah, it's soooo simple!!
Why did areas outside of state managed care system (cosmetic lasik, et al.) see a price decline while quality went up over last 20-years? Are they just not as greedy??
Mandates, govt. created insurance cartels are part of problem, but the third party payer system removes people from cost. So: Providers don't have to compete on cost. So: There is overutilization/excessive demand. So: There are exploding costs.
In 1970, for a pre-college physical in Texas, one Dr. Hode charged me 2 $, . . .
And while we are at it why don't we get rid of the medical insurance companies also. At this point, whatever the private sector came up with would almost have to be better than having the greedy insurance companies in the middle just taking a big bite out of every transaction.
Computersd aren't subsidized or made by overpaid union workers.
Isn't it the problem of barriers to entry into the medical field that limits competition?
What is the reason for the drop in health insurance in California?
I have a question about the doctor too.
If he messes up and someone dies under his care does he still have liability insurance?
and isn't insurance a form of socialism?
There are a lot of reasons why technology prices go down. What are you trying to prove here? You are just helping Peter make his point. Efficiency lowers prices. In healthcare the same efficiency would make it cheaper, but government subsidizes it and makes it more expensive because it eliminates the free market forces of doctors competing for the business of individuals that would otherwise drive the price of it down.
Now you're making my point. LOL
About 38 bucks. Since Peter reiterated 5 bucks to 2 bucks. Even cheaper adjusted for inflation.according to the inflation calculator.
Peter is the truth
"Middle man." That you think of insurers as middle men is part of the problem.
Before the state managed care system set up in mid-60's people bought insurance for things that were UNLIKELY to occur. That's what insurance is! It insurers you against something is costly and unlikely.
Because of govt. central planning people treat insurance like health care. They use it for everything. It's no longer insurance. They are removed from the cost of their premiums due to third party payer system.
yep, i think it's called "other people's money"
"Private insurance companies charge high costs for newer tests and advanced surgeries." You aren't understanding my points.
The third party payer system removes people from cost. Insurance companies and hospitals don't have to compete on costs. Hospitals and doctors are also afraid of getting sued in our litigious society. That's why unnecessary tests, most expensive drugs/procedures are used. That's why people treat insurance for routine care.
Health care in U.S. is not free market.
"whadaya care? the gov is paying for it", the same rationale can be used to justify charging higher prices to patients with health insurance. it is called the OPM phenomenon - Other People's Money
Umm... Yes?
Because he's been saying it for several years, probably since the gold price had been 5 times less than it is now? And because of the dollar is about to crash real hard against almost everything else, except for the yen and the euro?
Have you tried to purchase a filter for your camera peter? Might help take some of the redness away.. the blue background probably doesn't help either
After having dealt with them for 30+ years as an independent consultant I think they are fucking crooks.
Doctors also feel pressure to offer expensive "standard of care" to all comers for fear of being sued. It has become the "standard of care" to spend (and bill Medicare/Medicaid) thousands on wasteful diagnostics to avoid a career-ending suit
One of the biggest cost (waste) of the new Obamacare: IRS is in charge! You can expect shameless waste coming your way! My heart goes out to Peter's father who is still in the Federal Prison for disobeying the IRS and being the freedom-loving American that he is. Please, keep up the good work!
This is a very valid point. The same thing applies to most every expense we have. More people live off cancer than die from it...do you think they will "cure" anything as long as this is true?
.
But to blame "government" is pretty irresponsible, isn't it?
Insurance is designed to measure risk. It's designed for something that is unlikely to occur. Premiums are payed based on risk and those premiums are invested. Sadly, the govt. has so distorted health care that health insurance doesn't work anything like other types of insurance.
"Greedy insurance companies." In a free market they would be disciplined by competition.
At present insurance companies get the privilege of being in state insurance cartels due to state laws.
"Give me ONE example of how government is involved in the airlines, I bet you can't."
That is so easy. TSA. When you buy your ticket, part of the cost of that ticket is to pay the salaries of those people who feel you up to create the illusion that other people are safe on the plane.
The FAA?
"Helps the poor." How would $20 monthly insurance premium hurt the poor?
It's the govt.'s welfare state that is hurting the poor and everyone else.
Before the state managed care system was erected in the mid-60's cost weren't out of control relative to people's wage. Insurance was affordable to most. Many just payed out of pocket.
Those that were indigent relied on pro bono care or reduced cost care dispensed by doctors and nurses. It was expected of them. It worked fine.
"Get rid of medical insurance companies." No, there is nothing wrong with the concept of health insurance companies. They would naturally occur in a free market.
The problem with the insurance companies at present is that they operate inside of a state managed care system. People's insurance is usually payed for by govt. or employer. That means they are removed from cost. So: They overutilize.
Well, with all your facts, and all the quotes from Schiff to support your stance, how could anyone doubt you??
LOL
Interesting
can someone factor in the price of food stamps, health care and subsidies Walmart and their employees get for those cheap prices?
what are the real costs behind Walmart?
Is there any corporation in the US that is working in the free market?
voice of reason!
Affordable healthcare act just means we have to buy insurance or receive a fine, fuck that
Government mandated insurance is definitely socialism at its worst.
On the other hand, the point of insurance originally was to voluntarily distribute costs jointly among peers that entered into an endeavor.... knowing that the peers also wanted to keep costs down and wouldn't do risky things. Those who did risky things were dumped from the insurance. The government screws that up by forcing insurers to cover everybody and making insurance mandatory instead of optional.
Yes, but if that were the primary reason why technology has improved exponentially over the past few decades, then this competition should have produced exponential improvements in other areas as well. But clearly this is not the case, and hence there are other factors at play in the electronics market that explain why technology has improved exponentially.
Ummm, healthcare insurance is already sold directly to customers and it is not very cheap as you suggest. Why? Because those individual customers have no bargaining power with the insurance companies, whereas corporate employers can negotiate rates.
As long as you have a critical service (healthcare) with nearly monopolistic insurance companies which are motivated to raise prices to increase profits you'll end up with high priced healthcare.
It's not really too complicated.
TheSSphinxx The reason it's so monopolistic is because government regulations restrict competition.
Yeah. I think I know what you mean.
a competitive free market makes things cheaper to acquire so that means less money is needed to obtain goods. poverty is when you aren´t earning enough to get basic services like food housing and health. It doesnt matter how much you make but how much things cost. the best way to reduce poverty is to let things go cheaper and better so more people can aford them
My local Wal Mart has a special sales tax to pay for the access roads and stop lights.
Yea there are tons of government subsidies from corn to soybeans etc.
I believe in Capitalism as much as socialism, the problem is people gaming the system and such nefarious ideas as corporations being considered a person legally.
Currently we don't have capitalism we have corporate fascism or corporatism.
I think it is an unintended consequence of trying to incorporate socialism features with Capitalism.
Insurance is distribution of wealth to even economic levels between individuals who take a risk
life is a risk
everyone needs a pill now. pathetic
RadicalagainstBO shut up u dope
He's been telling them to buy gold since gold was $300 an ounce. That's far more than just two years. Its around $1400 now. Pointing out how correct Schiff has been only helps his case.
Yes, "free" health care will do that.
"Science advances to super expensive procedures. Don't want to pay for health care." They will pay one way or the other. There is no free lunch. If you get so-called single payer (govt. monopoly) the govt. will ration to control costs. The old get put to the back of the line or denied certain procedures. They are told to take a pill.
Tech gains lower costs in a free market. Those "super expensive" procedures are so high because of the state managed care system.