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Bob Dohse

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Individual American states - not only the entire nation - could also reduce medical costs by applying Larsson's ideas.

Dr. Stefan Larsson's ideas work at the national level, as shown by the national statistics quoted in his TED Talk.

But what about at the individual state level?

I suggest that, due to political and constitutional realities, the real potential of Larsson's ideas are at the state government level in America.

The medical profession in America is controlled mostly at the state level and medical (healthcare) insurance is almost exclusively under state government regulation.

Healthcare insurance plans and premiums are completely regulated at the state level, and insurance costs are consequently a direct function of medical costs.

If Larsson's proposals for medical CARE can be administered within an individual state, then the consequent costs of medical INSURANCE would fall proportionally.

And each individual STATE has all the tools necessary to make that happen regardless of what might, or might not, happen nationally.

So ... what ARE the barriers to individual state adoption of Dr. Larsson's ideas expressed in his TED Talk?

Let's give this a try in a few American states and see how it works.

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  • Nov 22 2013: I have worked in an insurance company for 7 years. During the time I worked , I also studied the principle of insurance. In essence, insurance of any kind is the sharing the unpredictable cost by all the insureds. However, the members of the insured must all have more or less same risk within a narrow range so that the cost could be FAIRLY SHARED. If an insured later developed a disease condition that was taken in as with probability of occurrence BEFORE IT HAPPENS. In other word, the insurance takes care of this risk and distribute equally to the participants who voluntarily join the pool. When a person has the conditions (preconditions) prior to when he apply for the insurance, then he is no longer classified as an unknown risk with equal probability, then he must be classified as a high (known risk) group and be assigned to a high risk pool. Furthermore, if an insurance company is small in its capitalization, it can buy "reinsurance" from other insurance companies to share the risk of major loss from its own group of insured. Many of the huge insurance cos, including international firms are often called "reinsurers". And some of the arrangement is called "catastrophic" insurance, but reinsurance need not be all catastrophic in nature.
    The Obamacare insurance is really not free market insurance,or insurance in any normal sense at all, because it requires all participants to share the cost of the patients with preconditions, and also to pay some cost of particular "disease" or "health promotion" measures which MAJORITY OF THE INSURED WOULDN'T EVER INCUR SUCH COST (such as maternity care, newborn care or contraceptives, infertility treatment, etc.).
    Before this new ACA, we at least had some palatable health insurance system. The better remedy is free market competition to rein in the high cost of health care for the vast majority of the citizens. We could just expand the Medicaid program to all the uninsured, instead of twisting the entire health care system.
    • Nov 22 2013: The "Medicaid instead of Obamacare" option would have been properly called a tax from the beginning. Quite possibly the law might not have passed if the sales pitch was to raise taxes.

      Thanks for explaining in depth your insight into the industry.
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        Nov 22 2013: Probably true.
      • Nov 22 2013: I agree that if the ACA specified part of the insurance premium as the tax, it probably wouldn't pass the legislature. (even though the Supreme Court interpret it as a tax later.)
        However, the system is really very bad in 2 reasons:
        1. If it is a tax, then this is the worst regressive tax policy one could ever think of. Because this "additional tax" is levied on those young and healthy workers who just started to build a career and establish a family, while we don't charge those billionaires for this tax (because they could just be self-insured or even be subsidized by their own business benefits.)
        2. By the way it's going with mandates and existing health policy cancellations to be reversed by the Obama Administration, the U. S. taxpayers will be burdened with a much larger tax or deficit than even the originally planned expenditure in the ACA structure. For example. some Insurance enrollment web pages are now pushing most of the old and sick people into the Medicaid Program (instead of the insurance exchange program which may charge premium from the enrollee) which is entirely financed by the state and federal government supported by general tax revenue.
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          Nov 22 2013: True.

          But how might we change that at the state level ... at least, in those states that are opposed to the current version of Obamacare?
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      Nov 22 2013: I agree ... insurance works only when the risks have a lower probability than the expected payments.

      That aspect hasn't been articulated well, but mandating a policy that covers routine care (e.g., annual exams) builds into the policy cost a minimal rate of payout. Any additional risk to be covered must be added on top of that floor price.

      This is why the deductible is now larger ... to cover that "guaranteed" expenditure.

      The question is no longer IF a person goes to a doctor, but WHEN a person makes a routine visit.
      • Nov 23 2013: Let me answer your question concerning the cost control or efficiency improvement for a health care insurance and health care providers group. Let me introduce myself first. Even though I have worked in an insurance company, but I went back to a university as a special student in the college of business administration. then I switched my graduate study and finished a PhD degree in Public Health in the College of Medicine.. And I worked as a faculty member and a consultant with my colleagues in a medical school and a school of public health. So I have knowldges in health service administration, hospital management as well as experience in particpating in many research with medical and surgical procedure and treatment.
        I am quite impressed in Dr. Larsson's research. As I understand any health organization or practice now must somehow conform to the ACA law in certain areas. By my limited information, the states can not interfere with the ACA setup, except that they can operate with certain "plans" that are exempted by the ACA law. One such example is the so-called self-insured/financed insurance plan. Another is the "consiege" health managed group. If you can urge one of the insurance cos to hook up with a "conciege" group, and organize a consortium of a group of small businesses to share in a large self-insured/financed group, then they could become a structure similar to the insurance exchange under the federal government. If this setup can be exempted to be managed by the state independent of the ACA rules, then cost minimizing studies of Dr. Larsson's can be carried out, and possibly with other hospital groups which worked only with large businesses outside of the national exchange system. Of course, cost efficiency in health care is needed for everybody nowadays. The only obstacle is how to be separate from the ACA rules, so that one can make such cost-efficiency study without the interference of the feds. I don't know my suggestion is realistic or not.
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          Nov 23 2013: As a layman, what you write makes sense to me. Thanks for the extensive and informative response.

          Aren't the insurance plan costs within a state computed, in part, by the cost of care within that state? So, if all other variables were equal, wouldn't a state with lower healthcare costs consequently have lower insurance costs (even while complying with the requirements of ACA)?

          I'm sure that's a simplistic equation (and it certainly wouldn't be so pure in real life), but I see two issues at play ... (#1) the actual cost of care that nobody (politically) seems to be addressing and (#2) the requirements of ACA that deal with insurance coverage.

          Without addressing the cost of care, then the insurance debate is merely a scheme to share costs (without necessarily changing the cost structure).

          However, the other factor (the actual costs) can be moderated somewhat by cost containment strategies that ACA doesn't address.

          And, again, I'm a layman who is probably ignorant of some issues within the healthcare industry. But ...

          It seems to me that "cost containment" and "cost efficiencies" would be the natural domain of the GOP ... as ACA is of the DEMs.

          And the only way I can see the differentiation playing out is if the GOP's "red states" proactively promote efficiencies and containment.

          I observe the political divisiveness and conclude that the current issue in DC is the "sharing" of insurance costs ... what the DEMs call "fairness" and the GOP calls "wealth redistribution". And, at the moment, ACA has won the initial rounds of that battle.

          But couldn't "cost containment" and "cost efficiencies" still be applicable in a state, regardless of the other ACA mandates?

          And wouldn't that fit within the free-market paradigm of the GOP?

          (These are questions, not counter-arguments.)

          Thanks in advance for your input. :-)

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