10.07.10
Posted in Health care at 7:29 pm by Administrator
In parsing some research on peak theories of resource scarcity, an interesting outcome was noted. In the presence of continuous technological change, prices are higher before declining later in the exploitation cycle. This has implications for health care. As we are well aware, health care costs/prices have risen markedly for the last couple of decades, during a time of continuous innovation and technological change. More advanced diagnostic equipment, drugs, and so forth. But health care is not an exhaustible resource (which is good), so there is no peak to apply here exactly. But the rationale clicked in my mind. Will we ever reap lower prices at some future date after the upfront costs of innovation are recovered?
In health care, hard to say. There are so many market distortions, for example consumers are divorced from pricing because of insurance from employers and government. If market forces were more possible in health care, like in energy, there might be some discipline for prices and costs.
Permalink
09.10.10
Posted in Health care at 5:38 pm by Administrator
News about new study finds a growing health care sector and more government admin expansion. This doesn’t sound like a more cost-effective, efficient health care system. Wasn’t that the purpose of the reforms? Link here to Reuters story.
Permalink
03.12.10
Posted in Health care at 8:57 pm by Administrator
A new study by Boston College’s Center for Retirement Research indicates that lifetime costs for a retiree household is $197,000 (present value). This includes insurance premiums, home health care, and out-of-pocket costs, but excludes nursing home costs. But a typical household also has a 5% chance costs will exceed $311,000. When nursing home costs are included, the typical couple’s bill rises to $260,000, on average, with a 5% risk of exceeding $570,000. And less than 15% of households have accumulated that amount in total financial assets. Bar none, nursing home or long-term care costs are the greatest risk to household retirement security, they report.
Long-term care expenses are an insurable risk.
Permalink
08.31.09
Posted in Econ, Health care at 5:17 pm by Administrator
Good story from Bloomberg about the state of financial and economic affairs. Basically they report that stock market investors are more sanguine about recovery than bond investors, and why. The WSJ reports a couple of days ago that stock market investors need to slow down — investors are piling back into the market, pushing up PE ratios above historic averages, and may be repeating some past mistakes. See August 29th’s “Why Investors Need to Slow Down and See the Light.”
In other interesting bits relating to health care, our health care reform-seeking government put out a report about/for “seniors” and Medicare. First of all, I dislike the word seniors, it’s so last century, slightly insulting, and actually about three decades out-of-date. While they give many pertinent statistics about Medicare’s looming insolvency and why, it’s really not the whole story on Medicare. Benefit growth in Medicare is more about perverse economic incentives and abuse of the system than anything they describe. They do make reference to the fraud they have identified and dealt with, and hurray for them. There’s just a lot more to go, and overall health care reform will only go a small step toward fixing what ails Medicare — escalating costs from ever-expanding benefits (many of which are abused and worked around) and increasing numbers of beneficiaries. In 2010, when the baby boomers enter Medicare’s rolls, watch the spending explode. Some real solutions have been posed but politics is trumping real reform of a program that is an entitlement, and one that all taxpayers and beneficiaries need to watch more carefully.
Permalink
07.24.09
Posted in Health care, Uncategorized at 4:16 pm by Administrator
I’ve been mostly silent about the legislation and debate being waged in health care, partly because it’s a moving target and partly because many of the proposals were ill-conceived. But I’ve heard one idea proposed that makes sense, and of course all the interest groups and their respective lawmakers are airing opposition. The idea is to allow the MedPac report to recommend cuts to the Medicare program. I used to read MedPac reports in the late-90s when I was solely focused on health care. Allowing the objective, non-politicized information to be informative and do some of the heavylifting in Medicare makes sense. Congress will not do their job on this. Perhaps MedPac data can help them.
The WSJ writes on July 24th: “The Medicare Payment Advisory Commission, created by Congress in 1997, has recommended more than $200 billion in cost cuts in the last year alone that lawmakers have ignored. Mr. Orszag wants to reconstitute the commission as an independent agency whose recommendations would automatically take effect — unless Congress expressly stops them.”
The Medicare problem will start eating all of our proverbial lunches. It needs to be reset, especially in light of the aging population. AARP doesn’t like the savings idea from MedPac unless the savings are spent to cover the uninsured, and I’m not sure that logic makes sense. AARP has had a strangehold on Medicare and all things “senior” for a while. It’s time to get real and think about generations to come.
How can we compete in a globalized world while bleeding and wasting so much on health care. Starting next year when Baby Boomers begin retiring, and into the following decade, soaring Medicare costs will put us in deficit even more. You think bank bailouts and economic stimulus deficits scare us now, wait til the public realizes they are paying for motorized wheechairs for those who may not need them, Viagra, and the like. It’s shameful. Frankly, Medicare pays for too many non-essentials already, in addition to incentives which encourage excess spending.
Retirees will also pay for this in terms of a less secure retirement. Excessive spending in Medicare will cause taxes to rise and the productivity gains of the last decade to evaporate. This spending will crowd out funds for education, which can create long-term growth of the economy to support government programs in turn. There is a whole feedback loop that the AARPs and lawmakers who want to spare their oxygen-supply provider constituents fail to acknowledge. If these deliberated ideas are not adopted, cuts will come somehow, and be very, very painful.
The US economy and political system took a big hit financially and in terms of reputation. If we cannot put the brakes on unbridled health care spending, we are going to see a crisis of another sort. Financial markets get it; there’s no where to hide, except of course behind politics.
Permalink
