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Dreadnought
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Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 3:21 pm

Part of the whole political debate is the high cost of health insurance. Insurance is expensive because health costs are expensive. If you mandate low insurance costs, the insurers will take it in the a$$, so that's not a real solution. You can't really mandate that health providers bill less because they have a lot of costs to cover as well, and it's hardly fair to tell them that they can't make a profit on their hard work in medical school, or for the costs involved in developing new drugs and technologies.

So what can government do to lower the cost of health care yet still allow those in the industry to make a decent profit?

Easy. Make the entire health industry and health insurance tax free.

No sales tax. No corporate income tax. Maybe even elimination of personal income taxes of those people who work in the health industry That will cut the cost of health care by 30-40% easily, and if we cut personal income tax, probably 50% or more.

Of course, there will have to be a quid pro quo for this favorable treatment on the part of the companies involved. Salaries would have to be regulated, as would overall profitability, so that the massive savings the industry will incur don't simply end up in the pockets of employees and shareholders, who have the right to the same good compensation they have today, but should not profit from the elimination of tax liabilities - that benefit should go directly to lowering of sale prices.

It's an idea I frankly had standing at a urinal, but I don't see why it could not work. What do you think?
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andz
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 3:30 pm

I work for a company that supplies medical equipment, such as anaesthesia delivery systems, ultrasound diagnostic equipment, patient monitoring and information systems. The technology in healthcare these days is mind blowing, and someone has to pay for it.
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falstaff
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 3:39 pm

I think a lot of the cost is built right into the system because health insurance companies will pay the bills so providers don't really care what they charge.

My doctor's price for an office visit for an uninsured person is $65. He bills my Insurance company $110. Makes you wonder???

You can see the same kind of things with auto body work. Say you crash your car and you plan on paying, out of your pocket, for a body shop to fix up your car. Good luck finding a shop that will even do a job that isn't insurance related unless it is a specialty shop. A lot of autobody shops will not touch a job that isn't an insurance job. Why? I don't know for sure, but I would think it might have something to do with cost.

I know I have had glass replaced and when I told them I would be paying in cash the price was lower than the price they showed me my insurance company would be paying.

Maybe this is just the Detroit area... We are always trying to scam somebody...  Wink
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mt99
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 3:45 pm



Quoting Dreadnought (Thread starter):
Salaries would have to be regulated, as would overall profitability,

You communist bastard!!! Socialist!!! Get him.. dont let McCain or Palin hear you..

Quoting Dreadnought (Thread starter):
That will cut the cost of health care by 30-40% easily,

What makes you think that the benefits would be passed onto the consumers?
Step into my office, baby
 
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Dreadnought
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 4:40 pm



Quoting Andz (Reply 1):
The technology in healthcare these days is mind blowing, and someone has to pay for it.

No question about that. But if the developer did not have to pay taxes, that brings down the cost of development, no?

Quoting Mt99 (Reply 3):
You communist bastard!!! Socialist!!! Get him.. dont let McCain or Palin hear you..

It's an unusual step, but I think in keeping with conservative philosophy. Taxation is a major reason why health care costs so much. When you think about the corporate and income taxes that are flushed through the system, especialy for drugs and equipment, the tax burden is huge - I'm certain greater than 50%.

Quoting Mt99 (Reply 3):
What makes you think that the benefits would be passed onto the consumers?

That's why I say it has to be regulated. If we simply dropped their taxes, medical firms may drop their prices a little bit but give themselves huge tax-free raises and their shareholders as well.

Look, it's a quid pro quo. Your choice - Operate as usual, or apply for tax-free status but accept limitations such as salary caps for senior executives and stiff penalties for net profit margins of more than, let's say, 25% (which is quite a nice profit). If society is willing to give exclusive treatment to an industry (and what can be better than tax-free status for a for-profit business), society should be able to expect assurances that most of the benefits go to society.

As a conservative, I would be concerned about unintended consequences. Can you think of any?
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cytz_pilot
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 4:55 pm



Quoting Mt99 (Reply 3):
What makes you think that the benefits would be passed onto the consumers?

As cynical as I normally am about things like this, I think in this case much of it would, because the costs of health care are getting so unaffordable in this economy that they are losing customers. A company must walk a fine line between maximum profit gains for their shareholders and maximizing the number of customers that both need and can afford their service. You can't keep profits up if you lose 10-20% of your customers who just plain can't afford your service. If I were in charge, I'd drop my prices if possible to keep my customer base - and raise prices when I can, when the public could support them.

As for the elimination of taxes on the health care industry, yes, it would lower costs and it's a fine idea, I wish it could work...but that money would have to come from somewhere else. Right now the government is collecting over 1 billion dollars less per day than it needs to keep running the country - if this nation were a business it would be bankrupt.  Sad
 
flexo
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 4:58 pm



Quoting Dreadnought (Thread starter):
No sales tax. No corporate income tax. Maybe even elimination of personal income taxes of those people who work in the health industry That will cut the cost of health care by 30-40% easily, and if we cut personal income tax, probably 50% or more.

Sounds good, but unfortunately will not help at all.

The taxes that are currently paid by the health industry will then have to be paid by someone else, meaning higher income tax, sales tax, gasoline tax, you name it tax.
The overall cost for society will not be lessened.
 
AirCop
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 6:12 pm



Quoting Falstaff (Reply 2):
My doctor's price for an office visit for an uninsured person is $65. He bills my Insurance company $110.

But what does the insurance company actually pay?

Quoting Dreadnought (Thread starter):
No sales tax. No corporate income tax. Maybe even elimination of personal income taxes of those people who work in the health industry That will cut the cost of health care by 30-40% easily, and if we cut personal income tax, probably 50% or more.

Where are you getting these figures? Since a non-profit hospital charges the insurance company about the same as a for-profit, where is the savings? For profits usually always post a loss at year end so no corporate taxes there; I never seen sales tax on a medical bill, so no taxes collected here either.

The simplest way of saving money would be a single payer system. Medical institutions have to deal with hundreds of insurance plans all having different pay rates, rules etc, so with a single payer system, a big layer of bureaucracy is gone, realizing immediate cost savings. Of course the CEO's of the plans wouldn't like losing their big salaries, private jets etc.
 
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Dreadnought
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 6:46 pm



Quoting Cytz_pilot (Reply 5):
As for the elimination of taxes on the health care industry, yes, it would lower costs and it's a fine idea, I wish it could work...but that money would have to come from somewhere else



Quoting Flexo (Reply 6):
The taxes that are currently paid by the health industry will then have to be paid by someone else, meaning higher income tax, sales tax, gasoline tax, you name it tax.

Then the government will need to tighten its belt and spend less. The federal government has been on a wild spending spree ever since the Great Society days, and it has not succeeded in making things better. Their one most promenant success story, raising the percent of families that own homes, just smacked its nose in the mud. It's time that big government is admitted to be a failure, and that it should be downsized.

Quoting AirCop (Reply 7):
Where are you getting these figures? Since a non-profit hospital charges the insurance company about the same as a for-profit, where is the savings? For profits usually always post a loss at year end so no corporate taxes there; I never seen sales tax on a medical bill, so no taxes collected here either.

There are taxable entities all throughout the chain - hosptials are only one. There are the designers and manufacturers of medical equipment, from cotton swabs to MRI scanners. You have medical distribution companies. You have the pharmaceutical companies.

And then you have all the employees of all the above that all pay taxes. If they were tax-exempt, they their employers could pay them 20-30% less and the employees would still earn the same take-home pay.

As far as the numbers go, they are off the top of my head. But I have 20 years of experience in managing budgeting for corporations, and I am certain the full tax burden on any retail level medical service is greater than 50%, if I took the time to analyse it.

Quoting AirCop (Reply 7):
The simplest way of saving money would be a single payer system.

No way. After we've seen how government bureaucrats screwed up the housing markets, how they buy military hardware, how they have mismanaged social security and medicare, only a fool would say, "let's have the government be in charge of our health".
Forget dogs and cats - Spay and neuter your liberals.
 
StuckInCA
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 6:46 pm

I love that we're now discussing options rather than pointing fingers across the aisle.

That said, I'd be a little concerned about this idea. In the US in 2007, spending on health care was $2.3 trillion which is 16% of GDP. If all of this became untaxed, that would be a huge hit to tax revenue.

As to people in the health industry being exempt from income tax - - why? What about engineers working on imaging systems used in healthcare, etc?

I have no idea how to really solve the problems. One serious problem I see is drug companies lobbying their way into medications becoming routine that are unnecessary. As just one example, they try to give every baby born in the US a Hepatitis B vaccine. Bizzare. I can almost guarantee you that a lobbyist got that added to the vaccine schedule. How much money do you think they make selling those millions of doses?

And why does the guy peddling drugs to doctors (the guy that barely made it out of high school with me) make well into 6 figures? All he does is schmooze and convince doctors that their patients need bone regenerative medication (rather than a healthy diet and some exercise).

How about limiting malpractice lawsuit claims (if it isn't already done) and thereby lowering malpractice insurance costs?
 
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Dreadnought
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 6:50 pm



Quoting StuckInCA (Reply 9):
As to people in the health industry being exempt from income tax - - why? What about engineers working on imaging systems used in healthcare, etc?

I'd include them too. See above.

Companies that make stuff for the medical industry AND for other industries would have to spin a part of itself off, that way we keep it entity-based. I believe GE's medical technology unit is already a seperate legal entity - that can be tax-free, while the rest of GE would be treated normally.

Quoting StuckInCA (Reply 9):
I love that we're now discussing options rather than pointing fingers across the aisle.

Hey, I'm just collecting ideas for when I become dictator of the USA.  Wink
Forget dogs and cats - Spay and neuter your liberals.
 
stratosphere
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 7:34 pm



Quoting AirCop (Reply 7):
But what does the insurance company actually pay?

Exactly. The insurance company only pays part of the total bill. When you go into the hospital for a procedure or admittance the insurance will pay a most of the bill and the hospital will write off the difference. That is why it is so unfair for someone who has no insurance because they wind up paying the entire hospital bill like I did when I went to the hospital for an overnight stay when I was laid off and had no insurance. it took me years to pay that off. Of course there are some who go in with no insurance and have no intention of paying their bill.
 
Flighty
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 8:41 pm

Sorry Dreadnought. That's a completely crazy idea. It would never work and nor should it.

First of all the "big bad" companies of health care probably pay very little tax today as it is. Or are you saying they should not pay income tax for their doctors, lawyers, consultants, drugs sales reps, nurses, janitors, therapists... just put them all on easy street?



Methinks this "no tax" atmosphere prevalent is some kind of McCain policy twisted through a tube and mis-shaped into something else. The fact is our health care system costs way too much because it is a "club" system without incentives or controls on costs and services. We also have to have a good conversation about end-of-life issues. Dying is not a bad thing. Everybody deserves the health care that is reasonable. No one deserves $5 million in therapy because dozens of lives could be saved in other hospitals with that money. This is about making intelligent decisions, not about killing the person who needs $5 million in skin grafts or whatever. People do die and frankly, we have no shortage of people in our society.

Health care (along with military policy) stands as the most major weakness and failure of our American governmental system. We could easily have a wonderful medical system at only half the cost as today's system. But we don't because political cronies run our medical system, not sensible managers, like in Canada or Scandanavia.

People say Canada's health care system sucks compared to ours. But actually Canada performs more hip replacement surgeries per person (because everybody in Canada has access to care, not just the professionals and the elderly). This access-to-care issue prevents us from beating countries like Cuba on life expectancy. For all our pride and gloating of our medical system, our public health practices are unspectacular, our life expectancy is mediocre, and our costs are so high that it's almost impossible to fathom.

If you want to make bilions of dollars I suggest you join the health care industry. Like the military, health care runs on cost-agnostic, infinite federal funding. You can make immense personal fortunes and build a massive castle, and own many private jets if you are a big success in the medical industry, which fails to insure lots of our natural born citizens by the way.
 
ShyFlyer
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 8:59 pm



Quoting Falstaff (Reply 2):
I think a lot of the cost is built right into the system because health insurance companies will pay the bills so providers don't really care what they charge.

This is what I've heard as well, from an accountant who used to work at the local hospital no less. It was the reason why, he said, tongue depressors cost you (for example) $8 each. There was no real incentive to find out how much those small items cost the hospital to provide, so they just slapped a dollar value to it because someone would pay anyway.
I lift things up and put them down.
 
AirCop
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 9:01 pm



Quoting Dreadnought (Reply 8):
No way. After we've seen how government bureaucrats screwed up the housing markets, how they buy military hardware, how they have mismanaged social security and medicare, only a fool would say, "let's have the government be in charge of our health".

Where did I say government?

Quoting Dreadnought (Reply 8):
how they have mismanaged social security and medicare,

Where has the government mismanaged these programs? Perhaps you should have used politicians and not government.
 
skyservice_330
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RE: Idea For Lowering The Cost Of Health Care

Fri Oct 17, 2008 10:21 pm



Quoting Dreadnought (Reply 8):

Quoting AirCop (Reply 7):
The simplest way of saving money would be a single payer system.

No way. After we've seen how government bureaucrats screwed up the housing markets, how they buy military hardware, how they have mismanaged social security and medicare, only a fool would say, "let's have the government be in charge of our health".

I understand the apprehension, but a comparison of administrative/insurance processing costs suggests that they are actually less expensive in Canada.

From:

Quoting Michael Kirby & Wilbert Keon, “Why Competition is Essential in the Delivery of Publicly Funded Health Care Services,” Policy Matters 5, no. 8 (2004): 11.:


The single-payer system also substantially reduces the administrative cost
to hospitals of processing and administering health insurance claims. For example,
a 2004 study** (using 1999 figures, in US dollars) concluded that the overall
administrative costs (including hospitals and doctors’ offices) accounted for 31
percent of total health care expenditures in the US ($1,059 per capita), compared
to 16.7 percent in Canada ($307 per capita) (Woolhandler, Campbell and
Himmelstein 2004). If its administrative costs were the same as Canada’s, then
the United States would save $209 billion per year, more than enough to insure
the 40 million Americans who currently have no health insurance.
Examining insurance overhead only, the overhead cost per capita for health
care insurance was $259 in the US, compared with $47 in Canada, representing
5.9 percent and 1.9 percent of total health care expenditures, respectively. It is very
clear that, in addition to its cherished egalitarian attribute, the single-funder
model is also the more administratively efficient by far.

**Steffie Wollhandler, Terry Campbell, and David Himmelstein, “Health Care Administration in the United States and Canada: Micromanagement, Macro Costs,” International Journal of Health Sciences 34, no. 1 (2004).
 
andz
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RE: Idea For Lowering The Cost Of Health Care

Sat Oct 18, 2008 7:59 am



Quoting Dreadnought (Reply 4):
But if the developer did not have to pay taxes, that brings down the cost of development, no?

Possibly, but

Quoting Flexo (Reply 6):
The taxes that are currently paid by the health industry will then have to be paid by someone else, meaning higher income tax, sales tax, gasoline tax, you name it tax.
The overall cost for society will not be lessened.

so that is not a practical solution.
After Monday and Tuesday even the calendar says WTF...

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