CHAPTER 18
INEFFICIENCIES IN ADMINISTRATION (ADMIN)
“It usually takes me more than three weeks to prepare a good impromptu speech.” - Mark Twain
A recent poll showed that managed care had a respectability rating just above the lowest ranked sector, tobacco.
§ 18.1.0 OVERVIEW
§ 18.1.1 Between 2000 and 2007, the profits at the 10 biggest health insurance companies increased 428%. Hundreds of health insurance companies have been purchased by the few biggest companies, leaving only a few remaining health insurance companies. These conditions lead to an oligopoly, which is against all principles of capitalism.
§ 18.1.2 In 2004, US health insurers directly employed 470,000 people (average salary = $61,409). Total employment related to all insurances was 2.3 M.
§ 18.2.0 NAME, RANK, REVENUE, PROFITS & US PER CAPITA DATA
§ 18.2.1 In July 2007, the very top 5 Fortune 500 companies in the category of “Health Care: Insurance and Managed Care” totaled revenues of $192 billion and profits of $10 billion. Profitability was 5.5%. ADMIN, including billions of dollars in executive bonuses totaled $27 B. Where ADMIN and profits totaled $37 B, direct ADMIN costs if they had been operated by the public sector would have been $31 B less, $6 B.
§ 18.3.0 NAME, RANK, REVENUE, PROFITS & PER CAPITA DATA
§ 18.3.1 In July 2007, the top 8 Mutual Life and Health Insurance Companies listed in the Fortune 500 posted total revenues of $260 billion and profits of $14 billion. Profitability was 5.6%. Revenues per US citizen were $866 and the profits per US citizen were $48.
§ 18.4.0 EXECUTIVE COMPENSATION
“Fidelity is seven-tenths of business success.” - James Parton
§ 18.4.1 United Health's CEO, William McGuire, received $1.6 B in stock options plus an $8 M salary. Director and dean of Columbia’s School of Nursing raved he’s worth every billion, err, dollar. I wonder if he’ll donate to Columbia some day?
§ 18.4.2 OK. In school, I saw Lee Iacoca earn his few M in bonuses for saving Chrysler. So, I defended great CEO compensation, believing if they shrewdly added $1 B in shareholder equity, I’d pay hundreds of Ms to them. However, today, bonuses are not tied to performance. Companies misrepresent facts. SEC filings cannot be trusted. Today, stock deals are designed so they save on taxes by paying only 10% in long term capital gains rather than 36% in salary on bonuses of $1.6 B. Since these sweetheart stock deals are tied to work and not capital, these executives ought to be paying the maximum rate.
§ 18.5.0 OLIGOPOLY PROFITS
§ 18.5.1 In most markets (56%) a single payer controls more than half of the insurance business. US health care is sufficiently concentrated to make most prosecutors charge for violations of anti-trust laws. Where there is absolute control over a market, monopolistic behaviors occur, and capitalistic competitive spirit is extinguished in favor of assured greater profits.
§ 18.5.2 The big 3 insurance carriers in Washington state, Regence Blue Shield, Premera Blue Cross, and Group Health Cooperative’ profits increased from $11 M (2002) to $431 M (2006) (3900% increase). Cash surpluses increased from $833 M (2002) to $2.2 B (2006) (264% increase). They covered nearly 2.4 M people in 2002 but only 1.9 M in 2006 (79.2%)! Medical costs rose 16% while insurance profits rose 23%.
§ 18.6.0 PATIENT ADMIN
§ 18.6.1 Here’s something we seldom see – costs of ADMIN by patients. How much time, unpaid, do we spend on the telephone correcting other’s errors? Making sure that our coverage doesn’t lapse of isn’t dropped or reduced? That insurers pay our doctors so we’re not straddled with unfair attacks on our credit. How much time do we spend reviewing policies, statements, bills, and, pay the ones that are legitimate and fight those that are not? These costs could easily exceed $100 B a year. You could construct and fill a computer lab in every school for just the first years’ savings!
§ 18.7.0 ADMIN & INSURANCE EXPENSES
§ 18.7.1 Direct ADMIN costs by third party payers totaled $180 B / year in 2003 ($466 PP versus $66 in other OECD nations). The US spent 7 times the other 29 OECD nations on direct ADMIN! Given we spend twice as much in total and we have a larger population, an economy of scale ought to be realized and ADMIN ought to be a bit less, not 7 times more!. Here again, if we were living healthier, all were covered, had fewer mistakes, QOL was better, and life span was longer, I’d say, well, we’re probably getting our money’s worth, so, let’s not focus on this little matter of overcharging by $150 billion. But, since everything is worse, I’m inclined to say that something is really wrong. Of course, I admit a bias here. I hate to be ripped off at the rate of $500 per American!
§ 18.7.2 Today, estimates of combined direct (third party payer ADMIN costs) AND indirect (hospital and other provider ADMIN costs) health care ADMIN costs vary greatly.
STUDY ADMIN COSTS % SAVINGS
#1: $400 B / yr 16% $100 B
#2: $580 B / yr 23% $280 B
#3: $833 B / yr 33% $533 B
§ 18.7.3 It’s noteworthy that the administrative costs for other OECD nations for their public systems is 3%, the same as Medicare’s ADMIN cost. Yet, the Senate Finance Committee, led by Senator Max Baucus who receives millions of dollars in campaign donations and lobbying gifts, wants to increase private insurer’s ability to charge 35% for administration (and profit).
§ 18.7.4 Managed care, government compliance, and administrative systems are ineffective.
§ 18.7.5 Insurance companies pad their programs with bureaucrats to inflate costs and real profits and executive bonuses. Medicaid are redundant systems resulting in tremendous inefficiencies.
§ 18.7.6 I’m curious why the people who advocate buying private insurance across state lines advocated separate state Medicaid programs.
§ 18.7.7 NIH grant ADMIN is 20% of the cost of each grant. Streamline administrative costs so more scientific research can be performed that save lives and not just employ administrative specialists.
§ 18.7.8 FDA regulations impose tens of Bs of dollars worth of mandates that sometimes do not equate to efficiency, safety, or logic.
§ 18.7.9 A streamlined review process, especially provisional review for class B items is needed, would save pharmaceutical manufacturers and US patients money.
§ 18.7.10 - Our blindly believing the results of later-trial human efficacy studies by drug companies with vested interests is foolhearty, at the kindest. FDA ought to assess costs of studies that will be contracted out to, say, NIH, thus assuring greater veracity.
§ 18.7.11 - Providers themselves maintain costly record-keeping systems to avoid litigation.
§ 18.8.0 ELECTRONIC MEDICAL RECORDS
§ 18.8.1 Imagine every patient has a health care (credit-like) card. When they go to the doctor, the receptionist swipes the card. Prescriptions, doses, dates, prescribers, doctors, diagnoses, and surgeries are immediately printed out. Doctors could identify dangerous patterns, potential causes of problems, and patients who “doctor shop”. Providers would have instant, accurate information, thus able to spend more time caring for patients. Medical errors could be reduced, through ease of reading, reminder systems, automatic displays, direct and immediate prescription orders, and summaries.
§ 18.9.0 ELECTRONIC MEDICAL BILLING (EMB)
§ 18.9.1 Insurance plan, co-payment, and deductible information is given to the provider. With EMB, the insurer immediately deposits payment for the procedure into the bank account of the provider. EMB staff could be reduced by hundreds of thousands.
§ 18.9.2 Last week, I received a bill for a procedure completed a few months ago. It was for $0.97. I realize that exceptions can be exceptionally costly to manage, but, the stamp was half the cost of the bill.
§ 18.9.3 As a provider, I didn’t send out a bill unless it was sufficiently high to justify time and costs, I think $5. I like the thought of being paid immediately for services, like the rest of the world, rather than waiting 3 months. EMRs might reduce Medicare’s 3% ADMIN costs even further!
§ 18.10.0 ELECTRONIC MANAGED CARE
§ 18.10.1 - Managed health care by insurance companies does not work. It has not worked for 25 years! It won’t suddenly work tomorrow! Admit defeat today and let’s begin something fresh that WILL save money and improve quality of care!
§ 18.10.2 - Pre-authorizations could be replaced with the swipe of a card and entering a procedure code.
§ 18.10.3 - Most pre-authorizations developed by the insurance industry seem to simply be hurdles that slow the speed of procedures, saving insurance companies money.
§ 18.10.4 - Today’s crisis is often tomorrow’s forgotten memory.
§ 18.10.5 - US cancer patients wait 38 days before treatment! Stringing a person along during the initial and most critical 5 weeks is inhumane!
§ 18.10.6 - Reduce micro-management and authorizations and providers will be available 15% more!
§ 18.10.7 - Thus, lower provider demand, stress, and error.
§ 18.11.0 CUTTING THE COSTS OF ADMIN
§ 18.11.1 - I propose that a Citizen’s Committee to Reduce ADMIN Expenses of Health Care be formed. I suggest that it consist of citizens, government officials, representatives from provider organizations and insurance and health service providers. It must examine all ADMIN expenses, determine unnecessary processes, and find ways to reduce those costly programs.
§ 18.12.0 MY HEALTH INSURANCE CONTRACT
§ 18.12.1 - I have a 120 page long contract that explains in small font and single space and lego-technicalese all kinds of exclusions, but not limited, of course, to that booklet.
§ 18.12.2 - It says, “Your health plan does not cover everything … Even more important, payment for services is almost always conditional. That is, payment may be reduced or even denied for a service if you received the service without observing all the conditions and limits under which the service is covered … Your health benefits are contractual … what you or your employer thinks is covered does not make it a covered service … the same is true even when the issue is life or death: a service is not covered simply because you, your physician, or your employer believe you need the service or because the service is the only remaining treatment which might (or might not) save your life.”
§ 18.12.3 - Is the rationing of health care by private health insurance companies really any different from the rationing by public insurance? How often have Medicare recipients so far experienced health care rationing?
§ 18.13.0 MEDICARE ADVANTAGE
§ 18.13.1 - I’ve not researched this element directly, I defer to a statement made by President Obama in his speech to DNC supporters on 08/20/09, in which I heard him state that the federal government pays insurance companies and HMOs $17 B a year to provide Medicare Advantage services – in addition to costs. Medicare Advantage started out with the best of intentions. It was to use the knowledge and skills of HMOs to provide health services for the elderly. The executives were brilliant. They built spas and golf courses and clubs and recruited the healthiest senior citizens and excluded sickly seniors. Thus, the federal government paid for Medicare Advantage to offer recreation to seniors whereas it continued picking up the tab for the most costly seniors. That was a nice boondoogle for those seniors and for the executives who thought of that idea, making hefty bonuses.
CHAPTER 19
SAVINGS PATIENTS CAN MAKE
“I've been married to one Marxist and one Fascist, and neither one would take the garbage out.” - Lee Grant
“To wish to be well is a part of becoming well.” - Seneca
§ 19.1.0 PREPARE A LIVING WILL AND ADVANCED DIRECTIVES TODAY
§ 19.1.1 Each of us ought to have a will, living will, and advanced directives. Before the Democrats suggested this recently, the Republicans embraced this just months ago. They bitterly dispute this amongst themselves. I advocate this, regardless of the political winds. I have done this so that if something happens to me and I have advanced, costly life saving measures keeping me alive, doctors will know to pull the plug so that instead of my family going bankrupt, my wife can send my kids to college. I choose that but you might choose something else. I spoke with my clergyman in order to get an objective, faith-based opinion. I suggest that each of us ought to prepare a living will today and, personally, many people might consult with their clergyman, doctor, perhaps even lawyer, when doing so.
§ 19.1.2 One problem I hear often is this. Organ donors haven’t made their wishes clearly known. So, if untoward events suddenly occur, that person’s organs are often not offered to those who might need them. I suggest that each of us give some combination of a copy of our will, living will, and advanced directives to our lawyer, physician, hospital nearest our home, clergyman, and family (you might not want beneficiaries to have the will).
§ 19.1.3 These items could be scanned into EMRs. Diagnosis of a degenerative disorder or terminal illness ought to always lead to a discussion of a living will, use of heroic measures, and cost / benefit analyses. Every time that a provider asks about these documents, they ought to pull out a sample for the patient to complete then and there.
§ 19.1.4 Doctors order $140,000 in services that extend the average person’s life an extra month or so. Both my kids could obtain Bachelor’s degrees from Virginia public colleges with room and board for that amount! On the other hand, if my death one month later were to reduce the bonuses of executives by $140,000, I’d try to live 32 days. Time with family, in the end, is the only thing that matters to us, usually.
§ 19.1.5 Tens of thousands of people die each year because no organs were available when in need. If millions more of us donated organs, more people would live. It’s not so much our sacrifice so another person can live. Rather, through another person, a part of us can continue to live. I realize that there is a slippery slope whereby our payment to organ donors (estates) might lead some to commit murder for personal gains. I also wonder if modest payments to estates for organs would increase the available organ donors. I know the argument that one murder is too many, and, indeed, we must devise a system so that its chances are reduced, but, allowing payment might increase donations by ten-fold and result in tens of thousands of lives saved each year.
§ 19.1.6 So I’ve heard, creation of a living will can help some taxpayers to transfer assets without paying gift taxes on them.
§ 19.2.0 EXTEND SERVICES WHEN YOU SAFELY CAN
§ 19.2.1 My neurologist wants an MRI every 12 months. I give him one every 14 months. I figure that in my lifetime, I will save maybe 3 MRIs and $15,000 for US healthcare. I push out annual doctor’s visits by one to two months. That month is not going to be significant. If experiencing symptoms at that moment, I call promptly.
§ 19.3.0 FAMILY
“How strange is the lot of us mortals! Each of us is here for a brief sojourn; for what purpose he knows not, though he senses it. But without deeper reflection one knows from daily life that one exists for other people.”
- Callimachus
§ 19.3.1 In recent decades, people move from their family of origin, divorce is more common, and children move away. Thus, older adults are often without loved ones near by to help care for their needs.
§ 19.3.2 Without grandma, younger people don’t know if a baby’s symptom is serious, so they see a doctor.
§ 19.3.3 Older people with ailments without a support network obtain medical services more often than those with a support network.
§ 19.3.4 The “aloning” of America costs money and reduces QOL.
§ 19.3.5 People ought to call family and discuss ailments. Neighbors ought to look after neighbors.
§ 19.3.6 We could provide funds to move poor elders with diseases close to their families.
§ 19.3.7 We can encourage people to log onto the computer and research a disease or join a disease chat room, talking with others with similar ailments. They often feel comfort from this connection and seek providers less often. On line chat rooms have been an immense help to caregivers, reducing stress and burdens.
§ 19.3.8 Historically, women are more likely to “enmesh” identities with extended family members and experience the “empty nest” syndrome. They move on by finding purpose in new projects.
§ 19.3.9 Historically, men are more likely to “enmesh” identities with work. At retirement, they leave work, often have few family contacts, take up few causa sui projects, grieve losses, and die 6 years earliers than women.
§ 19.4.0 ELECTRONIC RECORDS
§ 19.4.1 Patients would like greater access to health care providers through the internet. Some e-mail consultations might be billable, at a reduced rate from office visits, saving money.
§ 19.4.2 Patients would like access to medical records via internet. Why not provide access for patients to records? This might reduce some expensive office visits. It would increase accuracy.
§ 19.4.3 On-line appointment scheduling is also desired.
§ 19.4.4 Lawyers might also like EMRs. EMRs couldn’t be changed to hide medical errors.
§ 19.4.5 Third party payers would cover some consultations via the internet. Simple questions could be asked of the PCP, nurse, specialists at NIH or CDC, for which bills might be generated and sent to third party payers.
§ 19.5.0 PAYMENT METHODS
O Gold!
I still prefer thee unto paper,
Which makes bank credit like a bark of vapour.
- Lord Byron
§ 19.5.1 Small business people will immediately see the need for revising health care payment methods.
§ 19.5.2 Next time you pull out a credit card, ask what’s it going to cost me to use this? A provider pays 5% to banks and adds that fee in your price, although he gets the money that day rather than a week later, and there’s no risk of returned check headaches and bank fees. Americans pay over $15 B a year for this convenience that could be reduced if patients wrote checks for medical procedures rather than credit cards. Perhaps medical cards would contain checking account data, allowing the doctor’s clerk to debit authorized amounts. I bet that kind of savings would equal what we now pay for ½ the fire departments in the US each year!
§ 19.6.0 IMPROVING “PATIENT COMPLIANCE”
§ 19.6.1 One of the single most costly factors is patient non-compliance. This might sound awful! Most of the time, patients don’t really mean to be “non-compliant”, they just often don’t understand what they are to do the way their doctor, with his 40 years of medical training and experience, instructed them in the last 17 seconds of their speedy visit. Doctor and patient must be certain that the patient comprehends and can perform after-care procedures: by reducing physician ADMIN to 1/3rd, we could lengthen the time available doctors can spend with a patient by 3 minutes. An end of visit review, a “dry run” practice session between nurse and patient, occasional follow-up phone calls or emails by a nurse or automated system can improve patient compliance, increasing positive outcomes, reducing medical complications and costs. If a patient with a quick compliance question could send an email to the doctor, that would also be beneficial. Alcohol related traumas presented to the ER can have recidivism reduced by 50% through a 5 minute discussion with a health educator. Further enhancement might be achieved by a follow-up call 3 months later. Patients who tend to forget to take their medicine or insulin might benefit from automatic reminder systems, bells, alarms on their watches. I’ve noticed that the patients who write down observations or recommendations are much more likely to incorporate them in their daily lives.
§ 19.7.0 SHARED RESPONSIBILITY
§ 19.7.1 In US and European systems, we both share responsibility. In the European system, responsibility is shared by everyone. In the US, responsibility is borne by the individual and, sometimes, collectively by those with insurance, and, of course, collectively for the very poor, children, and elderly. Both systems have advantages and disadvantages.
§ 19.7.2 Patients always ought to think about diagnoses, accuracy, possibility of errors, procedures, drugs, side-effects, prices, interactions, and benefits / costs to my family and society and employer or school. Involvement in treatment can enhance treatment efficacy, reduce medical errors and costs, and extend the life expectancy.
§ 19.7.3 If a procedure is “elective”, patients ought to share in paying a portion of the cost. Patients who are encouraged to share in the decision making (not even sharing costs) choose 25% fewer surgeries and they have better outcomes.
§ 19.7.4 On the other hand, if my oncologist prescribes me a drug to fight cancer, I am going to take it no matter what the cost. As such, I don’t really have options nor ought I share responsibility in the decision. Should a third party payer penalize me for wanting to live?
§ 19.7.5 Many private policies cover ambulance services or ER visits partially unless hospitalization follows. Would this not encourage feigning and greater costs?
§ 19.7.6 For many of the poor, shared responsibility policies lead them to not obtain needed EMT or ER treatments.
§ 19.7.7 Increasing SSA payments by $100 a month and then charging higher corresponding co-payments, based on level of medical necessity, would increase the sense of cost “sharing” while providing them with necessary funds for needed procedures.
§ 19.7.8 I pay the same for medicines, regardless of cost. I am rewarded to think about what’s in my best medical interest. If I shared the cost, or received reward, I would be motivated to think more broadly, balancing costs of medicines with medical benefits. Sadly, introducing these types of reward / shared cost systems often lead more concrete thinkers and the poor to think only in terms of cost reduction.
§ 19.7.9 Patients on Medicaid have a no-show rate for their medical visits twice the rate of others. Physicians deal with this by scheduling 5 private pay patients an hour or 9 Medicaid patients an hour. In psychotherapy, where a whole hour is reserved for the patient, sometimes therapists must schedule and sit in the office for 60 hours in order to see 30 patients.
§ 19.8.0 MEDICAL SERVICES FOR LONELY OR HYPOCHONDRIASIS
“If you start to think about your physical or moral condition, you usually find that you are sick.”
- Johann Wolfgang von Goethe
§ 19.8.1 For some people who may be alone or elderly, the friendliness and respect of providers offer something. Thus, they may exaggerate ailments to see their physician. Doctors, fearful of lawsuits or perhaps loosing these patients, practice defensive medicine with these over-reporters, resulting in unusually highexpenses.
§ 19.8.2 Many people with hypochondriasis actually feel the fear of having a serious medical condition. Web surfing by those with hypochondriasis can exacerbate conditions. When a doctor recognizes this disorder and attempts to confront the patient, s/he doctor-shops until another doctor takes seriously their complaints.
§ 19.8.3 These individuals incur medical costs 14 times that of the average person. IT and integration of behavioral health services with primary care could efficiently address, in a less threatening manner, this condition and reduce medically not necessary procedures. This might alleviate some of the burden on the physician, give the patient the service that they need, and reduce health care expenses.
§ 19.8.4 Cognitive-behavioral group and individual counseling programs are more efficacious than any other intervention at this time.
§ 19.8.5 When a person incurs great “elective” procedures, a referral ought to immediately be sent for that person to see a psychologist for evaluation and / or treatment.
§ 19.8.6 “Elective” procedures ought to be taxed at a sufficiently high rate as to encourage attendance in therapy and reduce use of “elective” procedures.
§ 19.9.0 MALINGERING
§ 19.9.1 Malingering is the deliberate feigning of symptoms in order to obtain some kind of secondary reward.
§ 19.9.2 For example, the student might not have to take an exam, the employee can stay at home rather than deliver a stressful presentation, the prisoner facing trial can claim Not Guilty By Reason of Insanity or Not Competent to Stand Trial, people tired of working in unfulfilling unrewarding circumstances might seek disability benefits so they do not have to work.
§ 19.9.3 The Texas Department of Insurance estimates US societal costs of malingering at $150 B a year.
§ 19.9.4 Cognitive-behavioral group and individual counseling programs would result in net savings. In fact, hiring every psychologist in the country to work only on malingering would cost $15 B a year.
§ 19.10.0 BE ACTIVE AND ASK QUESTIONS
§ 19.10.1 - Before each doctor’s appointment, patients ought to write on paper your symptoms, questions, and everything you want to ask (most of us forget things when we get in the room). Pull out your paper and pen. When with your doctor, ask each question and check them off as asked.
§ 19.10.2 - Be your own investigator. If you can, look up your symptoms on the internet or at the public library before your doctor’s visit. What could it be? What are the treatment options? Do any medicines interact with what you already take?
§ 19.10.3 - Your doctor has about 10 minutes for you. It is your only body and life. YOU have the vested interest.
§ 19.10.4 - Take a second person along so they can objectively listen to what the doctor says.
§ 19.10.5 - Ask questions – the doctor is YOUR employee (actually, according to the IRS, your contractor). Don’t be too intimidated to ask questions.
§ 19.10.6 - Write down or record your doctor’s answers so you can consult records later. I prefer to focus 100% on our communication. If you can’t take a loved one into the consultation room with you, perhaps you might take in a voice recorder that you could consult later.
§ 19.10.7 - If prescribed medicine, ask about costs / benefits and less costly alternatives.
§ 19.10.8 - Be sure you understand what you must do to treat your ailments.
§ 19.10.9 – After you leave the office, take a minute. Think about what just happened, what was said, what you’re to do. Be sure to write down any new questions. The next day, email or call your doctor or nurse and discuss.
§ 19.11.0 IMMEDIATELY REVIEW YOUR BILL
§ 19.11.1 - I took my kids out to lunch the other day.
After eating, the waitress laid the bill in front of me. I looked over it closely. I saw that she over-charged me by $2.40! I often don’t examine medical bills, as almost all of them are paid by an insurance company. The provider only cares if he’s underpaid (trust me on this, its RARE that a third party payer will overpay a provider). How can the insurance company know what the hospital actually does?
§ 19.11.2 - Well, that’s the nice thing about EMRs. A bill is submitted electronically the moment that the nurse administers the antibiotic. If there’s an error, it is known immediately.
§ 19.11.3 - I think that bills ought to:
· Be fully explained prior to incurring the expense.
· Be given to patients at the time of the service.
· Contain specific services, dates, and costs.
· Break down fees from provider; negotiated rates; payments from third party payers; and the amount due from the patient.
· All OP visits, ER visits, hospitalizations, etc. ought to contain a patient satisfaction survey.
· It seems odd that their errors are almost always in favor of the hospital. One study found that 90% of hospital bills were in error, on average by over $1,300. When such mistakes are made so frequently and to such a sizeable extent, one might wonder if intent to pad these bills might be implied. It always seems that the errors are in their favor. I suspect that few of us have ever received a check from the hospital of $1,300 for overpayments.
§ 19.12.0 WHAT WOULD SAM WALTON DO?
§ 19.12.1 - I say this somewhat in jest. How might health care services be delivered if Sam Walton were doing it? I’d imagine he’d increase PAs, NPs, and dental hygenists. He’d provide an assembly-line of health care services – vision, dental, shots, wellness visits, coughs and flu visits, generic drugs. Everything would be the least expensive possibility and he would negotiate the very best price for Wal-Mart. Where can we, providers, hospitals, insurance companies, or government agencies use this successful model in health care?
CHAPTER 20
HOSPITALS “All our knowledge merely helps us to die a more painful death than animals that know nothing.” - Maurice Maeterlinck
"Your money, or your life." We know what to do when a burglar makes this demand of us, but not when God does.” - Mignon McLaughlin
§ 20.1.0 RECENT DEVELOPMENTS
§ 20.1.1 Hospital administrators recently met with Vice President Joe Biden and they agreed to reduce hospital costs by $155 B over the next decade (that’s $15.5 B / yr). Given that hospitals will generate revenues of $7.8 T, without inflation, that’s 2%. With inflation factored in, it’s about 1%. Where’s the real savings that we need? Hospitals consume 27% of the US health care budget. They must produce greater savings.
§ 20.1.2 I dislike lack of transparency. When Biden and Obama meet with health care and Big Pharma executives before laying out a health care plan, I get suspicious. When Senator Baucus accepts millions of dollars in campaign donations and gifts from lobbyists and company paramours, I tend to see personal greed overcoming duty to country. What promises had been made to assure big businesses that their bottom line or executive bonuses wouldn’t be threatened? It looks like what might have happened during the opening days of the Bush administration when they held the meeting with oil executives about energy policy and then the price of gas sky rocketed.
§ 20.1.3 The White House has reported savings by health care giants of about 1/10th of what I find is reasonable reductions in cost by those same industries. Could there be lack of skill on my part, dishonesty on their part, or simply an absence of real negotiation? Having observed the White House for 8 months now, I begin to question its ability to negotiate.
§ 20.2.0 CEO COMPENSATION
§ 20.2.1 Personally, I am willing to compensate a CEO almost anything if he provides an ethical and abundant ROI. This willingness is now being abused.
Columbia / HCA CEO Fraud $324 M Stocks
Tenet CEO Fraud $111 M Stocks
Health South CEO Fraud $112 M
United Health CEO $1.6 B Stocks
§ 20.3.0 5 MOST COSTLY CONDITIONS
§ 20.3.1 The 5 most costly conditions to treat in hospitals are presented below. Essentially, these five conditions can be clustered into two conditions – heart disease and neonatal care. With disproportionate costs, these are the first places I would look to reduce costs.
coronary atherosclerosis pregnancy and delivery newborn infants
acute myocardial infarction congestive heart failure
§ 20.4.0 HOSPITAL ADMIN, INSURANCE, & COMPLIANCE
§ 20.4.1 US hospitals are the biggest expense, at $780 B ($2,600 per capita in 2003).
§ 20.4.2 The fastest rising part of hospital costs is ADMIN, billing, and compliance.
§ 20.4.3 With more hospital staff per bed than 28 OECD nations, we only have the same number of direct care staff per bed. Most of our “padded” hospital staff are administrators. US hospitals have about 80% of the number of beds, have about 80% of the average length of hospital stays, and 80% of the rate of acute admissions as other OECD nations. The cost of that hospital bed that’s used is 225% more in the US than in the other OECD nations, yet we have similar hospital mortality rates and higher infection rates. Capitalists ought to be asking, “Why pay so much more for an inferior product for 95% of the population?”
§ 20.4.4 The typical US hospital spends 3 times more on administrative expenses than do hospitals at other OECD nations. Somebody has to toss the paper back and forth with the insurance executives.
§ 20.5.0 DEMOGRAPHICS
§ 20.5.1 Women utilize hospital beds at a rate of about twice that of men. This is partially confounded by age, as women live longer than men during the years in which the most expenses occur. Further, women must obtain gynecological care regularly and the must obtain obstetrical neonatal care. Further, many women experience life-long complications from birth related developments. Asian Americans utilize hospital beds at a rate about two-thirds that of other races. African American men’s longevity is so low that they barely qualify, as a whole, for SSA and Medicare, yet they work all their lives and contribute to these programs.
§ 20.5.2 This can get quite hairy. We might raise premiums 10% for women, reduce premiums 12% for Asians, increase premiums 12% for smoking, reduce premiums 10% for being thin. So, what’s the premium for this person? Ultimately, is it fair to discriminate on health costs based on demographic factors? Is it fair to discriminate based on choices the person makes? If I have a disease that drives me to drink alcohol or a thyroid condition that reduces metabolism and increases BMI, should I be punished by paying more for health care?
§ 20.6.0 TAX WRITE-OFFS FOR CHARITY
§ 20.6.1 With my small private practice, I was allowed to write-off donations that I made for charity. If I could not collect money due to me, then that was simply money that could not be reported as income. However, the wealthy hospital chain that bought my community hospital enjoys a special tax benefit that we’d die for. They are entitled to write-off uncollected fees, using due diligence, as tax deductions. So, let’s say my wife and three other women had babies and stayed 3 nights and it cost $7,000 each or $28,000. All promptly paid their bills in full. At the same time, Joe, uninsured, went to the ER and had an MRI and it cost the hospital $5,000 but it billed him for $27,000. Without insurance and with wages of $8 an hour, he won’t ever be able to pay it. So, after “due diligence” in trying to collect the bill and ruining Joe’s credit rating, the hospital writes off the $27,000. That means that they’ll only have to pay taxes on $1,000 of the fees from my wife and the three other maternity visits. No where else in the tax code are “theoretical” fees allowed to be written off. This adds up to giving the hospitals a back door way to report no profit, pay almost no taxes, and hide tens of billions of dollars.
§ 20.6.2 These theoretical profits write-offs increase bankruptcy filings and escalate hospital expenses. Tax law allowing for these write-offs must be changed.
§ 20.7.0 INFECTIONS
§ 20.7.1 The number of skin infections among the uninsured during hospitalizations increased 167% from 1997 to 2006 from 27,900 to 74,500.
§ 20.7.2 One of the most costly problems facing third party payers is infections in hospitals. Greater study of this problem by NIH and CDC is needed. One problem that I see is this: hospitals are paid by third party payers additional money for each patient infection that it treats. At the same time, there are no incentives offered to hospitals or doctors to prevent hospital-based infections from occurring. Hospital executives probably would not invest, unpaid, in infection control measures too terribly much, especially if they can extend a patient’s care 2 days and increase revenues.
§ 20.7.3 This statistic might be nothing but it could be an early alarm. Are Americans becoming more susceptible to infections? Are hospitals doing things differently now versus then that increase infections?
§ 20.7.4 The prevention programs within the FHCs could assume the lead on this issue. This alone can reduce health care expenses tens of billions of dollars each year.
§ 20.7.5 The most common carriers of infections are health care providers. We pull out a patient chart, turn the pages, close it up, and dash off to see the patient. I suggest that washing of hands be mandatory for at least 30 seconds before and after providers visit each patient. Using alcohol-based hand sanitizers or wearing plastic gloves might reduce many costly infections.
§ 20.8.0 SMALL SAVINGS
§ 20.8.1 Elsewhere, I propose significant reductions in ADMIN, defensive medicine, malpractice insurance, increased access to alternatives (such as HHC, elder care programs, NHs, and hospice housing), Electronic Medical Records utilization, QA advancements. With these programs alone, hospitals would reduce expenses by $150 billion per year. In addition, hospitals could –
§ 20.8.2 Authorize nurses to deliver prn OTC medications (aspirin) and make day-to-day decisions;
§ 20.8.3 Reduce outside lighting;
§ 20.8.4 Use more efficient energy / HVAC systems;
§ 20.8.5 Use solar and wind energies to reduce energy costs and greenhouse gases;
§ 20.8.6 Replace water spigots with water / O2 spigots;
§ 20.8.7 Renovate unused hospital wings for medical offices. Or, close up and insulate them.
§ 20.8.8 Make purchases of equipment, surgery materials, medications, through a cooperative and share the use of the most costly equipment.
§ 20.8.9 Hospitals can reduce expenses, through inefficiencies.
§ 20.9.0 PATIENT EDUCATION
§ 20.9.1 Re-admissions can be reduced (and compliance increased) by designating a nurse or health educator to review with patients (family or care givers) the reasons for admission, symptoms, treatments, and expectations for self-care and medical follow-up (providing an easy to comprehend, written copy is recommended). Twenty percent of older patients are re-admitted to the hospital shortly after their initial stay. Much of these costs can be reduced by a single in-hospital post-discharge planning session followed up with a telephone call to the patient’s home. Older patients might be assigned a geriatric nurse practitioner to visit periodically in the person’s home to assure comprehension of and adherence with medical regimen.
§ 20.9.2 The average savings for those who received full discharge information were $412. There are 35 M discharges.
§ 20.9.3 While this study did not include the benefits of health education following ER visits (119 million visits each year) other studies have found reduced recidivism and cost.
§ 20.9.4 IP and ER discharge health information briefings total 154 M a year and could save $64 B a year.
§ 20.9.5 Chronic Disease Management Programs most effectively reduce health care costs among those with lower risk but result in somewhat ambiguous outcomes among those with higher risk. Targeted interventions toward those at lower risk is logical. For those with more severe conditions, new information often is introduced too late in the disease development process to make a significant change. Regardless, information in high risk cases probably ought to be targeted to care givers.
CHAPTER 21
POSSIBILITIES FOR INCREASED REVENUES
“Money is like manure. You have to spread it around or it smells.” - J. Paul Getty
Years ago, the robber barrons knew something. When the economy was good, they made out. When it was bad, they spent money they weren’t making at the time, propping up the national economy and the common man, so that he could keep consuming their products. The “robber barrons” of today don’t seem to realize this.
§ 21.1.0 WHO OUGHT TO PAY?
§ 21.1.1 “People who choose unhealthy lifestyles like smoking, drinking, overeating ought to contribute to added costs.” But, where does this nickel and diming end? Ought we charge skiers more since they have a 1% higher rate of injuries? Ought we charge more to the young man who statistically has a 50% chance of acquiring Huntingdon’s Disease within 10 years?
§ 21.1.2 “People who disproportionately consume resources ought to contribute to added costs.” Asian American (AsA) women live 20 years longer (on SSA) than African – American (AA) men and receive 8 times more SSA / Medicare benefits than AA men. Women, in general, live while receiving Medicare / SSA twice as long as men and cost 3 times more than men. There is no active discrimination here. It’s just what cards we’ve been dealt.
§ 21.1.3 “People who work and contribute day in and day out ought to contribute to costs.” We know we must make sacrifices to better the plight of our nation and our children, so, as good but struggling Americans, we’re going to do our best.
§ 21.1.4 “The wealthy ought to contribute to added costs.” I want to reward ingeniousness and industriousness so that those individuals can prosper and the American economy and its people grow and benefit economically from their creations. But, I am much less inclined to prop up the lavish lifestyles of trust fund babies who contribute nothing to society but whose granddaddy worked hard to build a nest egg. These “trust fund babies” pay little in taxes, spend much on lavish lifestyles, and do not make contributions to bettering the world. As more of our nation’s wealth sifts into the hands of these most affluent, we must re-distribute it when the nation faces economic decline, in order to bring hope to less prosperous Americans who can then obtain health care, education, and invent the next thing that will lead America to its next period of greatness. Then, taxes on the wealthy ought to be reduced again, to encourage creativity, ingenuity, and industriousness.
§ 21.1.4.1 – I looked up the maximum federal income tax rates in the 1950s. It was 92%. The decade of reconstruction following WW2, the GI Bill, the Korean War and Eisenhower Interstate system required lots of investments in our national infrastructure. It was republicans like Dwight Eisenhower and Richard Nixon that brought this nation to prosperity, in part, through “socialistic” programs.
§ 21.1.5 Everyone must share costs.
§ 21.2.0 FEDERAL EXCISE TAX ON NICOTINE
§ 21.2.1 The costs of providing health care for nicotine-related diseases back in 1995 totaled $137 B. Given the pattern of reduced consumption but greater increase in medical expenses, the total cost of treating nicotine-related diseases today is $200 B / yr. Selling 18 B US packs, Americans pay $11 in smoking-related health care costs for each pack of cigarettes smoked. I propose a graduated tax increase on domestic cigarettes with the proceeds to the designated for providing health care costs for smokers and other users of nicotine products.
§ 21.3.0 EXPORT TAX ON NICOTINE
§ 21.3.1 I propose a graduated tax increase on the 10 B exported cigarette packs. Revenues would be invested into new health programs overseas, creating medical, dental, nursing, and allied health schools outside the US and using medical – electronic technologies, improving access to health care and pharmaceutical products, especially in rural foreign communities.
§ 21.4.0 FEDERAL EXCISE TAX ON ALCOHOL
§ 21.4.1 The costs of providing health care for alcohol-related diseases back in 1995 totaled $175 B. Given modest consumption reductions and increased health care costs, this estimate exceeds $275 B today. The social costs (law enforcement, domestic violence, burglary, auto accidents, courts, attorneys, and prisons) exceed $100 B. Premature deaths, at 100,000 per year, cost $200 B. Thus, total alcohol related costs exceed $575 B a year!
§ 21.4.2 Complicating this issue is the consistent finding that moderate alcohol consumption seems to be related to higher QOL, less disease and health care costs (more than $2,000 a year less per person than the average of those abstinent or those who abuse), and greater longevity. Thus, a small regular use of alcohol might be beneficial.
§ 21.4.3 Racially, Native Americans consume the most alcohol per person and Asian Americans consume the least alcohol per person. Women are more likely to abstain than men by nearly 1.6 to 1. The poor are more likely to abstain than are the wealthy. Alcohol consumption correlates with education – the more education, the more likely one is to consume alcohol.
§ 21.4.3 I propose a graduated tax increase on alcohol, peaking at $30 B a year. All of that money ought to be designated for serving the health needs of those who consume alcohol and related costs.
§ 21.5.0 SUBSTANCE ABUSE FINES & SERVICES
§ 21.5.1 Elsewhere, I recommend a fee of $2,500 for NIH research paid for by the 2 million Americans convicted of DUI, DIP, possession, and other such offenses each year. That money would be designated for NIH to conduct substance abuse research on prevention, genetic vulnerability, vaccines, treatment, and safety.
§ 21.6.0 RISK PREMIUMS
§ 21.6.1 Private insurance providers (including the public plans) might charge a government regulated risk premium for those who use nicotine, drink alcohol to excess, or who weigh 10% more (or less) than they should, perhaps not due to medical conditions.
§ 21.6.2 Recently, ambulances made the news, as they assess a premium on individuals weighing too much, thus requiring special equipment. Some premium for individuals in control of behaviors that increase their risk and costs of care ought to be allowed within reasonable limits.
§ 21.6.3 Risk premiums ought to be set at a given figure – say 10%. Part of me regrets saying this, but, perhaps hypochondriacs and overusers of elective services might pay higher c-payments and even co-insurances once a firm diagnosis is made.
§ 21.7.0 EXCESS PROFITS TAX ON PROVIDERS; INSURANCE, HEALTH CARE, & PHARMACEUTICAL COMPANIES & EMPLOYEES
§ 21.7.1 In 2005, health insurance companies made $100 B dollars of profit on revenues of $800 B – 12%. My retirement fund manager might say that’s an average ROI. But, when we’re experiencing an economic contraction, it seems like a lot of profit. I propose a tax on excessive profits so that insurance companies, insurance company executives who receive excessive bonuses, hospitals, imaging services, doctors, and other health care providers who profit “too much” might be subject to an excessive health services profits tax of some percent. “Excessive profits” taxes would reach from corporate profits, professional corporation profits, long-term capital gains, short-term capital gains, salaries, bonuses, special executive bonuses. It must be implemented fairly.
§ 21.7.2 Think about it. Capitalism is a system in which a product is made and, through competition, is delivered to and purchased by consumers. The health care companies and insurance companies are now oligopolies. They don’t play any more by the rules of capitalism. Consumers are being backed in the corner, extorted or forced to keep paying more and more to a ravenous bully. I don’t like taxes, personally. But, taxes are one way that our government can restore the rules of fair capitalist play.
§ 21.7.3 As the Congress lowered the capital gains tax rates, corporate executives began to see that high salaries were not as advantageous as were large bonuses disguised a as long term capital gains. I’d tax these bonuses as wages, since they were not gained through capital.
§ 21.7.4 Taxing excessive profits might bring on-board persons who might otherwise not be concerned about reducing health care costs.
§ 21.8.0 U.S. UNIQUELY TAXES CAPITAL GAINS LESS THAN WAGES
§ 21.8.1 An Example: The chief lemonade seller at my lemonade stand earns $50,000 a year. With Social Security, Medicare, federal, state, and local taxes, she will directly pay $9,000 and forego indirectly the $3,800 I match for SSA and Medicare. Thus paying $12,800 on $50,000 or 25.6%. I lived in the house in which the business is operating and over the last 5 years, I remodeled it, turning it into a $750,000 property for which I’d paid $100,000. I sell the property and the business (valued at $750,000), making a gross profit of $1,500,000. I don’t pay taxes on the real estate profit and I pay a 15% long term capital gains tax on $750,000 or $112,500 or 7.50%. Alright, I’ll give it to you – I took risk with my $20,000 start up capital. But, the chief lemonade seller took risk investing his labor with me. I risked that capital for 5 years, but, that seller risked his livelihood for 5 year.
§ 21.8.1 What’s so special about capital in America that our government chooses to place a higher value on capital than labor? Labor can be taxed up to 36% but capital can be taxed as low as 5%. The only people who benefit from having a capital gains tax lower than a labor tax are the wealthiest 1% of Americans. If you are among them or you are one of their minions, then it would be logical to insist on continuation of a federal tax system that places higher value on capital than labor. Logically, if the US is a democracy, the 99% or 297 million people who pay more for labor than capital ought to communicate to their congressmen that they want the labor and capital taxation rates to be the same. The far left progressives might even argue that during a period of economic decline that in order to stimulate the economy, there ought to be a higher tax on capital than labor.
§ 21.9.0 ASSESSING “DANGEROUS” FOODS FEES
“The wisdom of man never yet contrived a system of taxation that would operate with perfect equality.” - Andrew Jackson
§ 21.9.1 Treating diabetes costs $116 B a year. With inflation and doubling of prevalence, it could cost $465 B in 10 years. Consumption of “dangerous” foods closely predicts diabetes. Assessing a foods tax (e.g., snack foods, candies, soda) would have the doubly desired effect of reducing consumption and generating revenue. It seems draconian, but it is just.
§ 21.9.2 I remember reading one study that showed that the 1600% increase in esophageal cancer occurred over the same decades in which there was a 1650% increase in soda consumption. I know that correlation doesn’t equal causation, but, such findings grab my attention.
§ 21.9.3 Americans spend over $300 B a year in restaurants. I suggest a federal restaurant tax. In an ideal world, vegetables and fruit products would not be taxed in restaurants, but foods and beverages high in fat, cholesterol, calories, alcohol, or carcinogens might be subject to a 7.5% federal tax. I would argue that such taxes would cause restaurants to concentrate on revising their menus, making products healthier. Individuals at greatest risk of diseases would pay greater amounts for pursuing unhealthy lifestyles. Ultimately, this would reduce the size of the obesity epidemic. If the government wanted to, it could designate these revenues for obesity prevention programs and perhaps healthful foods production incentives and research.
§ 21.10.0 WEALTHY SUPPLEMENTAL TAXES
“This country will not be a good place for any of us to live in unless we make it a good place for all of us to live in.” - Theodore Roosevelt (R – NY)
§ 21.10.1 - In troubled economic times, the wealthiest Americans have always stepped up to the plate and they have done their duty to country and their fellow citizens. Most of the US wealth is controlled by a few and the proportion of that wealth grows and the proportion of the population that controls it shrinks.
§ 21.10.2 - In periods of national economic prosperity, I believe that lower maximum tax rates encourage ingenuity and economic development. Now is not one of those times. We must encourage consumer confidence and consumer spending.
§ 21.10.3 - It is noteworthy that 20% of Americans earn 50% of the national income and 8% earn 29%.
§ 21.10.4 - I suggest an 8% higher tax be imposed on those in the top 8% (thus, generating $190 B a year) and a 4% higher tax be imposed on those in the top 20% (generating $76 B a year). People would only be subject to one surtax, a maximum of 8%. The total of these taxes would generate $266 B a year. This would bring the maximum marginal tax rate to that in the 1970s.
§ 21.10.5 – If the wealthy strongly oppose paying more taxes to help cover the uninsured, then let’s target this $266 B to: (1) increasing Medicare services ($30 B / year). (2) Additional medical services for military and veterans ($9 B / year). (3) Debt reduction ($227 B / year).
§ 21.10.6 - There have been 3 times in the history of the US in which the national debt was as high as the GDP.
§ 21.10.6.1 - First, in 2009. Brought about by 2 wars and health care crises and low taxes. Maximum tax rate is lower than ever before, at only 36%. It is also lower than any other economically developed nation.
§ 21.10.6.2 - Second, following WWII. Brought about by WWII, Korea, overtures in Vietnam, infrastructure investments. EISENHOWER AND NIXON’S SOLUTION: Increease maximum tax rate to as much as 92%.
§ 21.10.6.3 - Third, following the Civil War. Brought about by war, railroad construction, devastation of southern economy. SOLUTION: Increase taxes.
§ 21.10.6.4 - I’d argue fourth, following the Revolutionary War. SOLUTION: Increase taxes.
§ 21.10.6.5 – Each of these times following wars taxes had to be increased and infrastructure investments were made, leading to a bounce back of the US economy.
§ 21.10.7 – As discussed elsewhere, I propose that capital and labor ought to be taxes at the same rate.
§ 21.10.8 – Supply side economists will cringe with this thought! If capitol gains were taxed at the same rate as labor, this would generate income of more than $100 B a year.
§ 21.10.9 - It would reduce speculative trading behind much of the bubbles and bursts of recent years.
§ 21.10.10 - Simple taxation of capital and labor would address the shift in income in the US from wages to profits,
Professional Corporation income, and capital gains.
§ 21.10.11 – I am not an expert on estate taxes. We might subject higher estate tax rates on the wealthiest 5% for a short time while the country recovers from the economic crisis. Perhaps it might be introduced as a Medicare “fee” assessed upon estates of the recently deceased who consumed more than $10,000 worth of services by Medicare when the estate is worth over $1 million.
§ 21.10.12 - These tax increases would be used to pay some of the health care proposals contained within and reduce the debt.
MAXIMUM INCOME TAXES
The following table reports maximum tax rates for married couples filing jointly.
| Tax year | Top marginal
tax rate (%) | Top marginal
tax rate (%) on
earned income,
if different | Taxable
income over-- |
| 1913-15 | 7 |
| 500,000 |
| 1916 | 15 |
| 2,000,000 |
| 1917 | 67 |
| 2,000,000 |
| 1918 | 77 |
| 1,000,000 |
| 1919-21 | 73 |
| 1,000,000 |
| 1922 | 58 |
| 200,000 |
| 1923 | 43.5 |
| 200,000 |
| 1924 | 46 |
| 500,000 |
| 1925-28 | 25 |
| 100,000 |
| 1929 | 24 |
| 100,000 |
| 1930-31 | 25 |
| 100,000 |
| 1932-35 | 63 |
| 1,000,000 |
| 1936-39 | 79 |
| 5,000,000 |
| 1940-41 | 81.1 |
| 5,000,000 |
| 1942-43 | 88 |
| 200,000 |
| 1944-45 | 94 |
| 200,000 |
| 1946-47 | 86.45 |
| 200,000 |
| 1948-49 | 82.13 |
| 400,000 |
| 1950 | 84.36 |
| 400,000 |
| 1951 | 91 |
| 400,000 |
| 1952-53 | 92 |
| 400,000 |
| 1954-63 | 91 |
| 400,000 |
| 1964 | 77 |
| 400,000 |
| 1965-67 | 70 |
| 200,000 |
| 1968 | 75.25 |
| 200,000 |
| 1969 | 77 |
| 200,000 |
| 1970 | 71.75 |
| 200,000 |
| 1971-76 | 70 | 60, then 50 | 200,000 |
| 1977-78 | 70 | 50 | 203,200 |
| 1979-80 | 70 | 50 | 215,400 |
| 1981 | 69.125 | 50 | 215,400 |
| 1982 | 50 |
| 85,600 |
| 1983 | 50 |
| 109,400 |
| 1984 | 50 |
| 162,400 |
| 1985 | 50 |
| 169,020 |
| 1986 | 50 |
| 175,250 |
| 1987 | 38.5 |
| 90,000 |
| 1988 | 28 |
| 29,750 |
| 1989 | 28 |
| 30,950 |
| 1990 | 28 |
| 32,450 |
| 1991 | 31 |
| 82,150 |
| 1992 | 31 |
| 86,500 |
| 1993 | 39.6 |
| 89,150 |
| 1994 | 39.6 |
| 250,000 |
| 1995 | 39.6 |
| 256,500 |
| 1996 | 39.6 |
| 263,750 |
| 1997 | 39.6 |
| 271,050 |
| 1998 | 39.6 |
| 278,450 |
| 1999 | 39.6 |
| 283,150 |
| 2000 | 39.6 |
| 288,350 |
| 2001 | 39.1 |
| 297,350 |
| 2002 | 38.6 |
| 307,050 |
| 2003 | 35 |
| 311,950 |
§ 21.11.0: RACE, HEALTH, & MEDICARE
§ 21.11.1 - African-Americans are more likely to be diagnosed with cancer, HIV / AIDS, cardiovascular disorder, infant mortality, and they are six times more likely to die by homicide from another African American than others.
§ 21.11.2 - The average age of death among inner-city blacks is 71, Caucasians is 78 and Asian – Americans is 85. Thus, blacks receive SSA / Medicare for 4 years, Caucasians receive SSA / Medicare for 11 years, and Asian – Americans receive SSA / Medicare for 18 years.
§ 21.12.0 SHIFTS IN MEDICARE / SSA TAXES TO NEW REVENUE SOURCES
§ 21.12.1 - Wages of yesteryear have been replaced with bonuses, capitol gains, Professional Corporation income, real estate turn-over profits … These are not taxed and ought to be subject to taxes and required contributions.
§ 21.13.0 OFF SHORE HAVENS
§ 21.13.1 - Some companies have located off-shore to reduce US taxes. Some companies ought to pay Medicare and SSA taxes and contributions and federal corporate income taxes on relevant income.
§ 21.13.2 – Off Shore tax havens, in sum, total less than 1% of the world’s population, have 26% of the world’s wealth, and 31% of the net-income of US multi-nationals. This totals about $6 trillion.
§ 21.13.3 – As much as $1.5 trillion each year may be “laundered” through these banks – drugs, human slavery, prostitution, illegal gambling, weapons, tax evasion, terrorism. The US to world GDP ratio yields 24% or about $360 B a year. No doubt, the share of unlawful proceeds accounted for by the US is at least 36% or $540 B. Taxing those revenues could yield in excess of $135 B each year.
§ 21.13.4 – Even after tightening of regulations following 9/11, these tax havens are allowed to exist because the rich and powerful in the US insist that they be allowed to exist.
§ 21.14.0 MEDICARE & DISABILITY TAX INCREASE
§ 21.14.1 - Medicare had been projected to become insolvent in 2018 and will incur negative income before that. [Where I come from, if I spend more than earn and I have no assets, that is insolvency!] We must increase assessments for Medicare and Disability. This tax ought to be increased to 3.40% in 2010 (generating $47.5 B / year) and to 3.90% starting in 2017 ($95 B / year). While SSA is beyond the scope of health care reform, I believe that an increase from 6.20% assessed upon both employer and employee ought to increase in 2010 to 6.70% (generating an additional $95 B a year used only to pay down the debt to Social Security), 7.20% for each starting in 2017 ($190 B a year), and 7.7% for each starting in 2024 ($285 billion).
§ 21.14.2 - The amount of income protected from taxation for those on SSA ought to be decreased. I know this does not seem just, as they had foresight to save where others did not, but in these extremely dire economic times, it is needed.
§ 21.15.0 MEDICARE PREMIUMS AND CO-PAYMENTS
§ 21.15.1 - The average cost to Medicare for people in that system is $10,000 PP. A premium of $1,300 does not begin to cover the true expenses from this program. [That mere 2.9% of salary over the past years hasn’t compounded to cover the annual costs of this program. Further, we live longer, consume more SSA and
Medicare, so, premiums must be increased.
§ 21.15.2 - A Medicare premium increase is a great burden on all, especially for those fully dependent upon SSA. Increased premiums ought to be considered. A premium increase of, say, $2,400 per year could be offset by an increase of $2,400 per year in SSA, all of which, as described above, would be taxable.
§ 21.15.3 - The “donut hole” in which Medicare beneficiaries pay the full amount of medications, lobbied for by drug companies so nobody could negotiate price with them as is done in other capitalistic - valuing countries, must be eliminated, as it creates a hardship on elderly who cannot pay that extra money on medicines. Medicare ought to cover the full cost of all medicines with standard co-payments or co-insurances.
§ 21.15.4 - Co-payments on “elective” and, perhaps “medically recommended” Medicare services could be increased, thus, decreasing the payments that Medicare pays for these procedures. Procedures “of medical necessity” would never incur co-payments. This could increase revenues $10 B for, essentially, all elective procedures.
§ 21.16.0 ASSESSING MEDICARE, DISABILITY, & SSA TAXES ON FOREIGN STUDENTS / NATIONALS
§ 21.16.1 - The US has the finest system of higher education in the world. Medicare, SSA and federal income taxes might be assessed on incomes / deposits of students from foreign countries who study in the US, generating over $5 B per year.
§ 21.16.2 – Non-US citizens who work in the US ought to pay taxes in the US. I have worked with several foreign nationals [in critical health care fields] who return to their home nation for 6-ish weeks every year so that they don’t have to pay US taxes. Of course, the potential costs [loss of access to labor in vital fields] must be weighed against the tremendous lost income.
§ 21.16.3 – Services provided at US hospitals built in other nations might be subject to a premium, particularly for elective procedures, generating an additional $5 B per year.
§ 21.17.0 “SALES” TAXES
§ 21.17.1 - At this point, wealthy foreign citizens who obtain treatment in the US pay no taxes, sales taxes, or fees. Imposing a “sales tax” would generate revenues of a few billion dollars a year.
§ 21.17.2 – The US ought to impose a modest export tax on knowledge to create health care products and
pharmaceuticals that are patented in the US and sold overseas.
