Obamacare

Bay State Senate to Successful Hospitals: Pay Up!

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In hopes of bringing down the state's skyrocketing health care costs—which are currently growing about 8 percent faster than the state's GDP—the Massachusetts Senate is reportedly considering a bill that, among other things, would "require hospitals in better financial shape to put money back into the health care system to lower premiums." At first glance, this might sound like an easy way to bring down prices: Cut into provider profits to bring down insurance premiums. And the AP article doesn't provide much in the way of detail about how the provision would work, so it could be basically harmless. But it looks to me like the Senate is pushing for a system in which hospitals that set prices and contain costs successfully enough to find solid financial footing subsidize those that don't. Does this strike anyone else as an odd way to attempt to curb costs?

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  1. so basically hospitals become like regulated electric utilities which have no incentive to keep operating costs down or make fixed capital expendatures because any increased profitability will just be taken away by rate regulators.

    1. “so basically hospitals become like regulated electric utilities which have no incentive to keep operating costs down or make fixed capital expendatures (sic) because any increased profitability will just be taken away by rate regulators.”

      As someone involved in senior management of a multi-billion dollar regulated electric utility, I feel compelled to say that you couldn’t be more wrong. Keeping O&M and capital spend low are paramount.

      On topic: What a stupid idea there in Mass.

      1. Interesting. So how does regulation alter your approach to running the utility? IOW – what are the biggest factors affecting your pricing and efficiency?

        1. The utilities are changing. They are moving away from their historic model of operational inefficiency that raises their cost basis so they may seek PUC approval to increase costs to ratepayers.

          They are replacing that model with rent seeking through cap and trade legislation.

      2. I respectfully beg to differ. Utilities, because they do get a more-or-less guaranteed return on capital, have no incentive to keep capital costs low. That is why the industry always built nukes as a one-off plant. Get to capitalize those engineering costs again.

    2. Government fails, so it loots the people.

      Is used to be that people rose up against tyranny like this and disposed of some politicians.

  2. Profits are evil. They should be outlawed.

    1. Tax the rich, feed the poor
      ’til there are no rich no more

      But then who’s going to pay the taxes?

  3. At this point all I can do is shake my head in disgust.

    1. Me too. Have people just totally lost it? It’s not like no one knew about the problems with MassCare when Congress was debating Obamacare. Wow it worked so well in Mass, let’s force it on the rest of the country!

  4. It strikes me as par for the course, these days.

  5. But it looks to me like the Senate is pushing for a system in which hospitals that set prices and contain costs successfully enough to find solid financial footing subsidize those that don’t. Does this strike anyone else as an odd way to attempt to curb costs?

    Sounds like the EU.

  6. I’m actually kind of surprised at how fast MassCare is unraveling.

    1. With ideas like these, it’s starting to make sense to me.

    2. One year too late.

      1. No no no… Even if there is an applicable lesson or example, the other side can always just dismiss it as too different, underfunded, etc.

        1. “The wrong people were in charge.”

  7. “But it looks to me like the Senate is pushing for a system in which hospitals that set prices and contain costs successfully enough to find solid financial footing subsidize those that don’t. Does this strike anyone else as an odd way to attempt to curb costs?”

    Not if the goal is to make sure everyone is treated the same–regardless of whether they have private insurance.

  8. I’m sputtering over this. It’s outrageous, senseless. The new MA state motto can be “Nothing succeeds like failure.”

  9. And some libertarians think there’s going to be an “Aha!” moment where everyone will realize just how much government intervention has utterly fucked up the healthcare system, and come to their senses.

    Nope, government officials just dig the rabbit hole of stupid yet deeper.

    1. I’m just waiting for Reason to be celebrating when those lawsuits against ObamaCare to win in court, so that the insurance mandate can’t go into effect.

      Two weeks later, every private insurance company will fold, and Congress will vote overwhelmingly to “rescue” the health care system by instituting socialized medicine. And Reason will complain about what a bunch of idiots they are.

      Reason is not known for self-awareness.

      1. If ObamaCare won’t work because the government can’t force the people into the system necessary to make it work, then I’d expect Congress would see the obvious and loosen up on some of the other mandates…

        Please don’t take this as a personal attack, but I think this kind of post is emblematic of a certain kind of thinking that sees free markets and capitalism as if it were a public policy to be implemented–and it isn’t that at all.

        Market forces aren’t exactly like the laws of physics in every way, but they are alike in some ways, and one of the ways they’re alike is that just like the laws of physics work regardless of whether there’s a public policy against them…?

        Public policy can be in harmony with market forces, but if it isn’t, then it’s public policy that will give way in the face of catastrophic failure, not market forces.

        1. then I’d expect Congress would see the obvious and loosen up on some of the other mandates…

          There’s your problem right there

          1. California’s done some pretty big layoffs over the last year. Nowhere near what I’d like to see, but economic reality trumps politicians’ fantasies and always will.

            The fall of the Soviet Union proved that in an extreme way. Chinese capitalism proved it in another…

            Just look at Greece. They’re gonna balance their budget.

            If healthcare goes similarly catastrophic in this country because the government can’t force people into their system, then market forces will take the politicians out back and…

            It always works that way.

            The worst thing that can happen is schlepping along at some newly acceptable misery level–and that’s what ObamaCare’s got us headed for.

            If not being able to force millions of people into healthcare they don’t want injects hard reality into this discussion, then that may be a good thing.

            What Obama’s discussion needs is a big dose of reality.

            1. I line in California (Los Angeles). The big layoffs have been everywhere but the Government. Government employment at the State level has grown. In L.A., the Mayor and the City Council have thrown a wide range of numbers (from 400 to 4,000) of layoffs that may be needed, but the fact remains that they haven’t laid anybody off. They keep kicking the can down the road.

              I have no doubt that most private employers can see the obvious and are making changes in how they run their businesses. You said Congress (and I inferred government) would see the obvious, and that is plain bullshit.

              1. They’re steppin’ over the line now…

                California’s government will shrink when it has to–not a moment before, and some Californians haven’t figured out yet that they have to. But they will.

                We’ve been here before in Ca. The last time was in 1978.

                …I hope my point isn’t getting lost in the trees, that no amount of government largess can escape market forces. Greece was much worse off than California in terms of its budget–and ultimately, it doesn’t matter what the rioters in the streets are doing, market forces are having their way with Greece’s politicians like they’re the prison bitch.

                Market forces won’t disappear just because President Obama chooses to ignore them either. They’re like the laws of gravity that way too–you can only ignore them for so long.

        2. Ken, you’re suggesting there will be an “Aha!” moment. Let’s agree to disagree. See: Greece.

          1. It’s not an “A-ha!” moment–I was answering something specific…

            “…when those lawsuits against ObamaCare to win in court, so that the insurance mandate can’t go into effect.

            Two weeks later, every private insurance company will fold, and Congress will vote overwhelmingly to “rescue” the health care system by instituting socialized medicine…”

            If every health insurer in America folds, because they’re mandated to cover people with pre-existing conditions and they can’t force healthy people to buy into the system to cover the costs?

            IF that happens, I think market forces will be such that it will be even harder to ignore them further and go full on nationalized healthcare…

            And even if they did, market forces would still be running amok.

            I certainly don’t think we shouldn’t oppose compulsory healthcare just because Congress might not do the smart thing when the whole house of cards came tumbling down.

            Maybe California’s “deregulation” (or partial deregulation) of its energy market is instructive? I remember When Gray Davis threatened to throw the utility executives in jail–what an idiot.

            At any rate, the solution to a possible broken healthcare system that can’t be fixed because people legally can’t be compelled to join won’t be nationalization–it’ll be going back to the pre-ObamaCare status quo. Pretty much like California going back to what they did before they deregulated the energy market.

            …and politically, if people are blaming ObamaCare for a broken system when it completely breaks down, then I’d expect they’ll blame the nationalization part of ObamaCare just like Californians blamed the deregulation part of the failure in the electricity markets.

            They won’t want nationalization in other words, they’ll want things to go back to the way they used to be.

            …and besides, if anybody thinks I’m gonna stop opposing the compulsory part of ObamaCare because opposing it will inevitably lead to nationalization? Yer outta yer mind.

      2. Reason is not known for self-awareness.

        Reason is a collection of people, not a monolith. Among libertarians in general, and the contributors to Reason in particular, there’s an understandable split, as I’ve argued this for quite some time.

        The more pragmatist libertarians, motivated to libertarianism by economic efficiency concerns, accept the mandate as necessary given other conditions (guaranteed issue, community rating, etc.) and as a least worst solution out of those politically necessary. Those more theoretical and more keenly attached to liberty and freedom in the one issue strongly oppose the mandate, even if the end results of so doing are negative.

        Before the law was passed, both groups could agree on a sort of fusion platform of “If you pass this, then a mandate will be necessary; we oppose a mandate, so we’re against passing this.” Now that the antecedent has come true, the coalition splits.

        This sort of split is inevitable on many issues dear to libertarians; once it’s clear that the state is going to do something, libertarians will take different sides on what form the government should do it. Take sex education, for example.

        1. I’ve thought about this in terms of the Gay Marriage issue–especially when it’s a ballot issue like it was in California.

          I always felt the need to pipe up before I said anything that it seemed absurd to me that gay people should have to ask me for permission. I don’t want to have to ask gay people for permission–why should what I think make any difference? Isn’t the libertarian take that this shouldn’t even be on the ballot?

          Like the way I’d feel about slavery if it were on the ballot–other people’s rights shouldn’t be for me to vote on–unless I’m on a jury.

          Of course, now that it is on a ballot, doing nothing means taking a position, and…

      3. Two weeks later, every private insurance company will fold, and Congress will vote overwhelmingly to “rescue” the health care system by instituting socialized medicine

        OTOH, it’s possible that some moderates who were willing to vote for ObamaCare in its current form would be put-off by a more nakedly socialized system. It’s hard to say.

        But, hey, it’s a disagreement about tactics and about which priorities you put first.

      4. Dammit Tulpa. Its election day, I cant buy a drink until the polls close.

        1. They should require drinking before you vote on their ballot of fools. Hell, they should pass it out at the polls.

        2. Me either! What a coinkydink.

          1. Fortunately, Arizona got rid of it’s stupid “no drinking until the polls close” law years ago.

      5. You think the insurance mandate will save the private insurers? I think the best it could do is put off the inevitable for a very short time.

    2. They need that rabbit hole to throw our money into.

    3. EVERYTHING government touches gets fucked up. It’s so blindingly obvious, and yet we keep electing these fucking morons that believe the opposite.

  10. The politician’s ultimate dream: A system in which everyone has to come to him for approval before doing anything.

  11. The incentive is to NOT be successful.

    Absolutely ridiculous

  12. Uh, doesn’t this amount to a bill of attainder, forbidden by the Constitution? I guess it depends on how it’s worded.

  13. Sorry – this is totally unrelated, but you guys need to make sure not to miss the awesome battle now happening on the old “Everybody Draw Mohammed Day” thread. Seems like Reason’s getting some interesting new visitors.

    https://reason.com/blog/2010/04…..dy-draw-mo

    1. Wow….

      Fundamentalism, illiteracy, and an internet connection – it’s like a trifecta of nuttiness.

    2. Sweet!

    3. I wonder if they’ve put in extra security at the Reason offices.

    4. Needs more Underzog.

    5. This is what I love about Reason. I remember them having a reason.tv thing about some interviewee saying that would have “free/open” comments but that they might moderate just in case.

      Nick retorted something like: “Oh, so they’ll be moderated.”

      Much love, Reason. Way to rock out with your cock out.

  14. The fundamental problem with regulation no matter the subject of that regulation, finance, oil well drilling, nuclear power, health care, is it is a poor substitute for problem solving. Human progress occurs through the solving of problems that our previous actions or inactivity caused. Assigning regulation before you have any idea what the solution will be is a ticket to treading nowhere for a very long time. It is like cavemen trying to master fire by throwing those who play with flint in jail.

  15. you guys need to make sure not to miss the awesome battle now happening on the old “Everybody Draw Mohammed Day” thread.

    If I’m not there, go ahead and start without me.

    —-

    This MassCare thing sounds like price controls, only worse.

    Reward failure, punish success.

  16. Human progress occurs through the solving of problems that our previous actions or inactivity caused.

    This is probably irrelevant, but:

    A friend of mine, many years ago, had a sign on his wall which, roughly translated, said, “Progress does not come from the early risers and go-getters; progress comes from lazy bastards looking for an easier way to do things.”

    What we are lurching toward currently is not an easier way.

    1. The question is whether politicians are go-getters or lazy slobs. IMO, they are only go-getters as far as votes are concerned; in their actual jobs of representation they are the laziest of the lazy.

  17. a system in which hospitals that set prices and contain costs successfully enough to find solid financial footing subsidize those that don’t. Does this strike anyone else as an odd way to attempt to curb costs?

    Looks pretty good to me.

  18. the Massachusetts Senate is reportedly considering a bill that, among other things, would “require hospitals in better financial shape to put money back into the health care system to lower premiums.”

    Better financial shape compared to what? According to whom?

    Oh, I love this government double-speak! It opens the door to all sorts of plunder!

  19. All this screwing around – just outlaw disease!!!

    ‘OK influenza – come out with your glycopolysaccharides up!!’
    ‘Look out Ted – he’s packing a H2N2 antigen!’
    Blam!!! Blam!!! Blam!!! Blam!!!
    Blam!!!

    46 trillion viruses, one 38 year old accountant, and all the fish in the aquarium – eliminated.

    Another successful bust by the disease police make the world healthier.

    1. +1 I enjoyed imagining that scenerio.

  20. If the Court strikes the federal law down, it should take out the whole business to avoid the “destroy the industry” scenario. There’s precedent for such decisions.

    As for Massachusetts, it’s just another case of “From each according to his ability, to each according to his need.”

    1. But they are not Socialist, Nooooo, see you still hold the title.

      1. “From each according to his ability, to each according to his need.”

        In the hospital speak, this is referred to as “cost shifting.”

  21. Here’s another massive yet entirely predictable failure of the MassHealthcare systems overhaul

    Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.

    1. Totally unforeseen. Who could have predicted such a thing?

    2. And guess who they are fucking? People who can’t afford to risk going without insurance, which is basically people with young children and old people. I hope all of those good suburban liberals in Mass who demanded this are happy.

  22. Fertility treatments.

    [insert incoherent stuttering-rage rant]

    1. Shrug, Medi-Cal covers penile implants.

      1. It does? Holy shit! I need to get on that program.

        I mean, I need to get my friend on that program.

        My friend, because he as a really small…uh, so what’s this about Mohammed?

    2. Yeah. Isn’t insurance supposed to be for things you don’t want to happen?

  23. So, the Bay State has beach right. Drag all the politicians down to just above the surf line at low tide, bury them up to their necks, and let them legislate away high tide. That way only they die fighting the inevitable.

    These people don’t understand that money is potential productive human labor. A human labor battery, if you will. Nature abhors perpetual motion. Entropy is a bitch.

  24. It’s amazing how many countries with nationalized health care have declining populations.

  25. From each according to his means, to each according to his needs.

    Liberals can never seem to get very far away from that principle.

    1. Game theory suggests an optimum of needy people with little means.

  26. Progressives are incredibly needy people.

    1. ?
      People, who need people
      are the luckiest people in the world…

      1. You have a Karaoke machine at home, don’t you Tulpa?

  27. They should call it The Healthcare Unification Act, because it sounds exactly what the corrupt politicians from Atlas Shrugged would have thought up!

    1. Beat me to it. Straight out of Atlas Shrugged.

    2. Incredibly, it seems they stole this idea directly from Atlas Shrugged! Ayn Rand has displaced Nostradamus……

  28. The best and most direct example of Moral Hazard we’ve seen in awhile.

    Why are politicians of both parties suddenly obsessed with propping up failing businesses? We are just supporting and promoting failure.

    I am considering not saving any money. What is the point? Might as well spend it all now, the country is speeding down the good intentions highway with the socialists (of both parties) destroying business.

  29. Who is John Galt?

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