As I wrote on March 27, 2017, Speaker of the House Paul Ryan’s plan for healthcare was pulled on Friday, March 24, 2017. There wasn’t enough support to even hold a vote in the House of Representatives.

It wasn’t a very good plan, anyway: too many vested interests. In fact, much of it was not too different from Obamacare.

Ryan’s plan — Ryancare — was the AHCA, the American Health Care Act of 2017.

Obamacare is the ACA or PPACA, the Patient Protection and Affordable Care Act, signed into law in 2010.

Below is a brief review of healthcare in the United States.

Before the 1980s

When I was growing up in the US, until the 1980s, general practitioners (family doctors) had their own practices. You made an appointment and paid for it. The doctors also made house calls, when necessary. The charges for both were reasonable. Those men knew you, your family, your health problems. They were also friendly and reassuring.

There also used to be community hospitals in most towns, even small ones.

Hospitalisation insurance — for catastrophic and/or unexpected healthcare — was affordable.

During the 1980s

In the 1980s, HMOs became popular and most employers paid for their employees’ insurance.

I left the US during this time and was not on an HMO plan myself, although I did have employer-paid insurance with a reasonable $100 per annum deductible (‘excess’ for my British readers).

Everything was straightforward.

I didn’t even have a family doctor.

I saw two specialist physicians during that decade by ringing their offices for an appointment. I used a walk-in clinic once. Walk-in clinics were new that decade.

I can’t comment further personally.

After the 1980s

American readers are free to comment on HMOs and PPOs.

It seems that, by the 1990s, everything was run by big healthcare corporations or a large consortium of local doctors.

21st century

A new development in primary healthcare arose around the turn of the century: concierge medicine.

Concierge medicine differs from the walk-in clinic or other types of direct primary care in that one pays a membership fee monthly, quarterly or annually for one’s healthcare.

This type of primary care was developed in 1996 by the two physicians who founded MD2 (pronounced “MD Squared”) International in Seattle.

Concierge medicine expanded from there, particularly after the Millennium. Initially, it was rather exclusive and expensive. Patient membership was limited.

However, that has been changing over the years. Some concierge care is incredibly affordable. Visit the YourChoice Direct Care site to see one example. YourChoice Direct Care is in Brighton, Michigan, and is referenced below. The membership fee covers much of the care provided. Drugs dispensed are generic and dirt cheap.

Of course, even if one is a member of a concierge or direct care medical practice, one still needs health insurance.

Health insurance under Obamacare

The obligation to purchase health insurance has become a problem with Obamacare, because premiums skyrocket this year. I have read only one anecdotal account online of someone who was grateful for Obamacare. That person is in a different situation to most, however. All the other accounts I’ve read are from middle class people who are now hit with five-figure deductibles in addition to eye-watering premiums. And we mustn’t forget the co-pay when seeing the doctor. A patient must pay for his part of the doctor’s visit on the day.

My readers who are not American should note that Obamacare is insurance, not treatment.

Another point worth remembering is that American legislators have their original healthcare plans and are not subject to Obamacare.

One can see why Americans are disgruntled with Obamacare — ACA, PPACA.

The proposed Ryancare — AHCA — was no better.

Why did Americans need Obamacare?

In a post from March 22, 2017, Karl Denninger of Market Ticker explains that the bottom is falling out of healthcare. Excerpts follow, emphases in the original.

Denninger has studied figures released by the Treasury Department which show:

the Federal Government spent $1,417 billion last fiscal year on Medicare and Medicaid, up from $380 billion in 1998, which incidentally was 37% of all federal spending last year — and it’s accelerating at ~8-9% a year as it has been for the last several decades (with some notable outlying years.)

At this rate it will cross $2,000 billion, or more than half (by a good margin) of the current federal budget within 5 years.  That will blow a $600 billion additional annual deficit hole in the budget into a rising rate environment which the government will not be able to finance.

That’s math, not politics.

This is because high-risk pools of patients began increasing in the 1990s:

That’s a fact, and it was cited as one of the reasons we had to pass the PPACA – to put a stop to their collapse by forcing everyone into paying for those who were very sick or nearly dead!  The stories of people who were unable to get into those pools at all due to lack of funding were well-circulated and the crimp put on treatments paid for by them were both well-documented and publicized — again, due to lack of funds.

By 2008, he says the medical and insurance industry were quickly heading towards collapse:

See, while health care counts toward GDP, and is nearly 20% of it today (up from about 3% 30ish years ago) most of it doesn’t produce anything.  Not one car, one house, one television set.  Oh sure, it might allow someone to keep making those things — maybe — but at what cost?  Yes, there are exceptions, but most of those exceptions (e.g. childbirth) are actually quite cheap in percentage terms.

The ugly part is that much medical care is actually negative to GDP.  Why?  Consider the drug addict who mainlines opiates and destroys his heart valves. “Fixing” it costs upward of $500,000, all said and done. Will that person ever produce more value than that with their remaining life?  Definitely not if they keep using drugs; they’ll die.  The sad reality is that most of them do exactly that.

How about the Type II diabetic that winds up running through a quarter-million bucks in drugs, amputations, dialysis, blindness and death because they won’t change their food intake and stop eating carbohydrates?  How far does he or she go before the ability to produce is destroyed, at which point they’re on disability and go from producing something to a net consumer of everyone else’s production?  By the way that specific instance when you add it all up nets out to somewhere around $400 billion a year for Medicare and Medicaid now!  That’s crazy on any objective basis; you could literally give everyone in the country — man, woman and child $1,000 a year instead with money left over — or adequately feed everyone who is hungry in sub-Saharan Africa (all ~230 million of them!) with a lot of money left over.

Ethical considerations aside (emphasis in purple mine):

you can’t escape the mathematical outcome that results from allowing these people to impose their costs on everyone else.  There are plenty of people in the lower and middle economic strata — in fact, most — who can easily wind up being a net negative to GDP and the problem becomes much worse when medical costs ramp by a factor of six compared against GDP and not all of the conditions in question come as the result of voluntary lifestyle choices.

But in all cases you eventually run out of people who can and will pay when exponential cost expansion occurs, especially when at the same time you ramp cost the income base you rely on to pay taxes to fund it is being destroyed one drug addict or Type II diabetes sufferer at a time.

Why Obamacare failed

Denninger says:

The PPACA was basically a bailout of the medical industry engineered to force a more-level slam of the cost on everyone in the country.

But… it failed.  It failed because nothing was done about the actual problem and costs continued to ramp.  The PPACA managed to get a lower spend in Medicare and Medicaid for one year (and a modestly-better increase in the two bordering it) but spending then returned to its previous trend!  The negative GDP problem got worse rather than better in aggregate and moved even further up the income scale on an individual basis.  The government tried to finance that through even more deficit spending but doing so just destroyed productivity and tax receipts.

Obamacare does not solve the cost problem:

It just moves the problem somewhere else.  Where it moved it was on the back of productivity and tax receipts, both of which have been horrifyingly bad since the 2008 crash.  Last fiscal year tax receipts rose by less than 1% despite all the new taxes in the PPACA and higher rates generally while productivity improvements have all but disappeared.

Why the AHCA was a bad remedy

He notes that the AHCA did not address cost, either, and:

if we do not address cost and thus drop that $1,417 billion precipitously the government’s budget will be destroyed and thus collapse on the clear evidence and trends published by our government’s own Treasury Department.

The AHCA failed to even achieve a vote partly for this reason and, had it passed, would have helped to:

further advance the collapse of our federal government’s ability to fund itself, and thus operate!

Furthermore:

The AHCA cannot resolve this problem because it intentionally refuses to address the driver of the problem in the first instance.  Returning to “High Risk Pools” is idiotic because those very pools were on the verge of collapse prior to the PPACA and were a big part of why Obamacare was written and passed!  The insurance and medical lobbies wrote the PPACA to get rid of those problems and pools, or so they thought.

They tried denying math but failed because the laws of mathematics are not suggestions. You can’t get rid of a cost by making someone else pay it; you simply move it and eventually it comes back and bites you.

… It just moves money around, something I noted back when it was first released (and much to the detriment of state budgets.)

What needs to happen

Denninger says 15 USC as well as State Consumer Protection laws must be enforced.

Prices and charges must be posted and must be uniform:

Forcing published pricing and charging everyone the same price for the same service or product of like kind and quantity, disconnecting it from alleged “insurance” using existing law, will force competition into the market immediately.

He says prices will drop dramatically and links to the aforementioned Your Choice Direct Care:

Medical costs will instantly drop like a stone.  How much?  Let me point out that from one “direct concierge care” site we have some examples of what market prices for common services and drugs look like – $4 for an A1c test, $3.13 for a CBC (complete blood count), $7 for a PSA screen, $275 for an MRI (damn close to what you can buy it for in Japan – cash, of course), $37 for an X-ray and $167 for a CAT scan.  On drugs how about $1.98 for 90 Prozac pills, or $1.44 for 30 Prilosecs? This place claims these offers are “at their cost” with your “membership”; note that they are not selling at a loss and the maker/operator of same is still making a profit!  Why would you fork over a “co-pay” of $10 or $20 when you can pay $1.50 for your prescription in cash?

Why would you need “health insurance” to cover routine medical care and prescriptions if you could buy services and drugs at prices like that — or at a 20% markup from them with a bunch of competitors in a given area?

We can have that sort of pricing for medical care today, right now, right here, everywhere in the country: Enforce the damned law today and that’s the pricing we will have for medical services and drugs TOMORROW.

Let me make this clear for you because we have proof of what the outcome will be: The known pricing we will obtain if we were to do this is, for most treatments and drugs, 80 to 90% LESS than paid today.  In fact most of the drugs listed on that concierge site are 10-20% of your copay under existing so-called “insurance” and so are the imaging and lab prices!

He says any reform legislation should cover — and President Donald Trump has mentioned this — prescription drugs:

repeal the reimportation ban on pharmaceuticals, and we need to add to Robinson-Patman inclusion of international sales.  That will force “best price” everywhere and pharmaceutical costs will fall like a rock here in the United States.  Oh, those other nations?  They’ll get to pay their ratable share of the development of drugs — and it’ll be about damn time.

In terms of legislation it’s pretty easy — you can see some ideas here and here.

Conservative media remain silent

For some reason, no conservative commentator ever discusses healthcare reform.

Here’s a list from Denninger’s readers:

Hannity HAS NOT brought it to the forefront.
Rush HAS NOT brought it to the forefront.
Levin HAS NOT brought it to the forefront.
Beck HAS NOT brought it to the forefront.
Savage HAS NOT brought it to the forefront.
O’Reilly HAS NOT brought it to the forefront.
Hewitt HAS NOT brought it to the forefront.
Malkin HAS NOT brought it to the forefront.
Ingraham HAS NOT brought it to the forefront.
Cain HAS NOT brought it to the forefront.
Bruce HAS NOT brought it to the forefront.
Bennett HAS NOT brought it to the forefront.
Boortz HAS NOT brought it to the forefront.

Let me add to your list of those who refuse to address this.

Hannity and Ingraham have been sent this info a dozen or so times as well as my Congressman which gets a “generic” health care response letter.

Tucker Carlson HAS NOT brought it to the forefront.
Ann Coulter HAS NOT brought it to the forefront.
Stuart Varney HAS NOT brought it to the forefront.

Even the “supposed” legal commentators have not touched this.

Judge Napolitano HAS NOT brought it to the forefront.
Judge Jeanine HAS NOT brought it to the forefront.
Kimberly Guilfoyle HAS NOT brought it to the forefront.

Then lets not even get started on the inability to actually contact or send a real email to any of these people. You have to go through some inane message system on social media or use some ridiculous web form that will not even recognize hyperlinks or colored, bold, italicized text for emphasis …

It appears social media accounts for all of these above are mostly designed for promoting book sales and personal aggrandizement and “look at me” posts.

At this point, every person that seemed like they might actually be willing to listen or discuss this has been notified and has revealed themselves by their refusal to discuss any of this.

Someone replied with regard to those in the list who work for Fox News:

Start asking the wrong questions on that network and you are gone. These media organizations exist not to promote freedom or uncover truths to protect the people but to inflame passions and promote propaganda. This is what happens when only a few large corporations control the majority of the media.

Someone else blamed it on the public:

Because TV , Facebook, Youtube and Twitter have reduced John Q Public’s attention span to about ninety seconds

… fact based essays don’t get traction.

True that!

Conclusion

Karl Denninger answered many of the questions I had been asking myself about healthcare in the US.

I hope he has answered some of yours, too.

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