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You are here: MacNN Forums > Community > MacNN Lounge > Political/War Lounge > Medicare Trustee Blahous: ObamaCare costs at least $340 billion deficit

Medicare Trustee Blahous: ObamaCare costs at least $340 billion deficit (Page 3)
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besson3c
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Apr 24, 2012, 12:04 AM
 
Originally Posted by Uncle Skeleton View Post
How are they different, and how does it matter? They are both warehouses, they both sell groceries along with everything else under the sun, and if you google "walmart competitors," every single link mentions Target by name.

Walmart goes after cheap prices no matter what, Target is a department store that sells reasonably good quality stuff without the same mantra for low prices.

You'll probably find better clothing at Target and more people that buy clothes there (just a guess), but my point is that they also have inventory differences and different themes and vibes. Some people would say that Walmart attracts more of your trailer trash.

The point is, in order for it to make sense to go up against an established competitor, you need some way to differentiate yourself for this to make good business sense. How can health care insurance providers differentiate themselves from each other? If your answer is price, as a newcomer you probably aren't go to last very long trying to undercut an established monopoly.

I'm not saying that this sort of competition impossible or never happens, but it is not a given that insurance providers that are doing very well in their home state(s) are chomping at the bit to expand and go up against the monopolies in other states.

Capitalism is great at picking winners and losers, but once you are a winner, knocking somebody off the pedestal can be very tough and doesn't always work as well or as timely as our romantic notions about capitalism would suggest. It's not always about building the best mousetrap, sometimes it's about the most savvy exercising of financial/political power (e.g. takeovers).

Cross-state competition would be great, I'm not shooting down ebuddy's fantasy, I'm just saying that there are no guarantees there.
     
Uncle Skeleton
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Apr 24, 2012, 12:59 AM
 
Originally Posted by besson3c View Post
Walmart goes after cheap prices no matter what, Target is a department store that sells reasonably good quality stuff without the same mantra for low prices.

You'll probably find better clothing at Target and more people that buy clothes there (just a guess), but my point is that they also have inventory differences and different themes and vibes. Some people would say that Walmart attracts more of your trailer trash.

The point is, in order for it to make sense to go up against an established competitor, you need some way to differentiate yourself for this to make good business sense. How can health care insurance providers differentiate themselves from each other?
Price, service, coverage, convenience, talking ducks and pink-haired femme fatales, and salesmanship (ie spam). The same way the rest of the insurance industry manages to compete. There's no shortage of competition or upstarts in the auto insurance market. The fact that "coverage" is not a tranditional consumable product is no excuse.

I'm not saying that this sort of competition impossible or never happens, but it is not a given that insurance providers that are doing very well in their home state(s) are chomping at the bit to expand and go up against the monopolies in other states.
Monopolies are illegal in this country, in any industry. Apple is suffering from that right now.
     
besson3c
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Apr 24, 2012, 01:13 AM
 
Originally Posted by Uncle Skeleton View Post
Price, service, coverage, convenience, talking ducks and pink-haired femme fatales, and salesmanship (ie spam). The same way the rest of the insurance industry manages to compete. There's no shortage of competition or upstarts in the auto insurance market. The fact that "coverage" is not a tranditional consumable product is no excuse.
price: okay

service: only applicable if the health clinics around you support more than one in-network provider. For most people, service (if by that you mean customer service) is probably not a terribly compelling feature for differentiation, because most people probably don't receive frequent customer service from their insurance providers anyway, and when they do don't have positive experiences that can help market the insurance package via word of mouth.

coverage: again, only applicable if more than one in-network provider is supported, but I think this is probably the same thing as price

convenience: how so? Making payments?


I maintain that for most people it pretty much comes down to:

1) what is in-network?
2) how much does it cost?

that's pretty much it. Because of this, it leaves very little room for market differentiation, providing little inspiration to go after a provider already dominating a state as ebuddy wishes would occur more frequently.

Monopolies are illegal in this country, in any industry. Apple is suffering from that right now.
I realize that, but I didn't mean monopoly as in the legal definition of the term.
     
Uncle Skeleton
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Apr 24, 2012, 01:34 AM
 
Originally Posted by besson3c View Post
price: okay

service: only applicable if the health clinics around you support more than one in-network provider. For most people, service (if by that you mean customer service) is probably not a terribly compelling feature for differentiation, because most people probably don't receive frequent customer service from their insurance providers anyway, and when they do don't have positive experiences that can help market the insurance package via word of mouth.

coverage: again, only applicable if more than one in-network provider is supported, but I think this is probably the same thing as price
This is exactly the same as what Apple was doing with ebooks (or whatever it was, don't really care), and is already illegal. Your objection should be to lax enforcement by the executive branch, not by changing the law to another law that will also not be enforced.

convenience: how so? Making payments?
I don't know how you can ask that question. It's not like the medical insurance industry has evolved to the pinnacle of convenience. If anything they are the exact opposite, the poster children of INconvenience. Are you telling me you can't think of any ways in which someone could do better than the status quo of medical bureaucracy re convenience?

I maintain that for most people it pretty much comes down to:

1) what is in-network?
2) how much does it cost?

that's pretty much it. Because of this, it leaves very little room for market differentiation, providing little inspiration to go after a provider already dominating a state as ebuddy wishes would occur more frequently.
How is that different from the situation for auto insurance? Do you deny that the auto insurance field is replete with active competition?

I realize that, but I didn't mean monopoly as in the legal definition of the term.
I don't know what you mean by that. The legal definition is the same as the colloquial definition.
     
besson3c
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Apr 24, 2012, 01:49 AM
 
Originally Posted by Uncle Skeleton View Post
I don't know how you can ask that question. It's not like the medical insurance industry has evolved to the pinnacle of convenience. If anything they are the exact opposite, the poster children of INconvenience. Are you telling me you can't think of any ways in which someone could do better than the status quo of medical bureaucracy re convenience?
Of course the medical bureaucracy is a PITA, but I just wouldn't characterize it as "inconvenient", I would characterize it as frustrating and overwhelming, and I'd say that the point you were trying to make was that an insurance provider could help customers cut through that. The problem is, I don't think any insurance provider really has the capability of doing that within this current system while striving to generate sufficient profit.

How is that different from the situation for auto insurance? Do you deny that the auto insurance field is replete with active competition?
It is, but the auto insurance field is comparatively simplistic, and the marketing I've always heard has revolved around lower price guarantees. I've acknowledged that price is an area an insurance provider can differentiate themselves from others, but I think that a direct comparison to the auto insurance market just doesn't work here, because of the different variables, one being the vastly differing complexity of services.

Have you ever seen a single health insurance ad? Maybe I've been living under a rock, but I don't think I have.

I don't know what you mean by that. The legal definition is the same as the colloquial definition.
It is possible to dominate a market without being a monopoly, and while it is technically incorrect to call somebody who dominates a market that isn't a monopoly a monopoly, I think it is a pretty common use of this word. If you and others disagree, I'll refrain from using this word, I can after all make my same point using different language.
     
Uncle Skeleton
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Apr 24, 2012, 02:33 AM
 
Originally Posted by besson3c View Post
The problem is, I don't think any insurance provider really has the capability of doing that within this current system while striving to generate sufficient profit.
Defeatism

It is, but the auto insurance field is comparatively simplistic, and the marketing I've always heard has revolved around lower price guarantees. I've acknowledged that price is an area an insurance provider can differentiate themselves from others, but I think that a direct comparison to the auto insurance market just doesn't work here
Hmm. Can you name the Car Insurance Companies by Slogan? by personalfinance | Online Games & Trivia by Sporcle

Like a good neighbor ___ is there
All your protection under one roof
Your in good hands
think easier; think ______
quote, buy, print
______ is on your side
Just right, just for you
Travel with someone you trust
Responsiblity. What's your policy?
15 minutes could save you 15% or more on car insurance <-- 1 in 10 is about price

Have you ever seen a single health insurance ad? Maybe I've been living under a rock, but I don't think I have.



It is possible to dominate a market without being a monopoly, and while it is technically incorrect to call somebody who dominates a market that isn't a monopoly a monopoly, I think it is a pretty common use of this word.
But that's exactly the legal definition too. That's what Apple is being prosecuted for right now. Apple is hardly the only ebook seller, but any action that manipulates the market price of a product violates anti-trust statutes, regardless of whether you are literally the only vendor.
( Last edited by Uncle Skeleton; Apr 24, 2012 at 02:44 AM. )
     
besson3c
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Apr 24, 2012, 02:49 AM
 
Skeleton (can I call you that?),

Why do you think there isn't more competition within health insurance? Why do some/many areas only support one in-network provider?

ebuddy has been talking about competing across states, but what is stopping more competition within a given state?
     
subego
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Apr 24, 2012, 02:55 AM
 
Originally Posted by besson3c View Post
Have you ever seen a single health insurance ad? Maybe I've been living under a rock, but I don't think I have.
Aflac has the most memorable campaign, but I've also seen/heard ads for BCBS, Aetna, Cigna, American Family, and Humana.
     
ebuddy
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Apr 24, 2012, 07:26 AM
 
Originally Posted by Wiskedjak View Post
When you used Bed & Bath & Beyond as an example of how companies can compete with WalMart, that's where I thought you were going as well. B&B&B competes with WalMart by offering better service. They are able to do so because they operate in a niche of the range of product offered by WalMart.
These were examples cited to illustrate that they can't compete with one another when in fact they do. I used Bed Bath and Beyond to illustrate the inherent creativity of the market. You can begin by appealing to a certain niche of the market with every intention to grow that market and become a real competitor. The insurance market is heavily skewed away from smaller companies that want to specialize in specific coverage options. It seems you and besson are so mired in the status quo that at this point you can't even imagine companies competing with varying models and niches; starting smaller and building market share over time through creative means, a better product, value, etc... The status quo tries to mold all insurers into utilizing the same model which is what I've been saying all along. It skews the market by hampering its inherent creativity. This comes at a great cost to all of us.

So... you really thought I was talking about different insurances for different sicknesses or did you just miss that I was addressing the examples besson provided?
ebuddy
     
ebuddy
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Apr 24, 2012, 07:28 AM
 
Originally Posted by subego View Post
Aflac has the most memorable campaign, but I've also seen/heard ads for BCBS, Aetna, Cigna, American Family, and Humana.
Ever see anything about rates in their ads or how to save over the competition? I don't. They read more like PR campaigns than ad campaigns as if they're trying to stave off the folks lighting torches and threatening to storm their offices with demands of better value.
ebuddy
     
BadKosh
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Apr 24, 2012, 11:41 AM
 
Why not remove all the states various mandates and allow the insurance companies to sell in all 50 states? Wouldn't that have them competing more and cause a lowering of prices? What about torte reform?
     
Uncle Skeleton
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Apr 24, 2012, 11:54 AM
 
Originally Posted by besson3c View Post
Why do you think there isn't more competition within health insurance? Why do some/many areas only support one in-network provider?
Because they haven't been prosecuted for racketeering
     
Athens
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Apr 24, 2012, 12:17 PM
 
Originally Posted by besson3c View Post
Walmart goes after cheap prices no matter what, Target is a department store that sells reasonably good quality stuff without the same mantra for low prices.

You'll probably find better clothing at Target and more people that buy clothes there (just a guess), but my point is that they also have inventory differences and different themes and vibes. Some people would say that Walmart attracts more of your trailer trash.

The point is, in order for it to make sense to go up against an established competitor, you need some way to differentiate yourself for this to make good business sense. How can health care insurance providers differentiate themselves from each other? If your answer is price, as a newcomer you probably aren't go to last very long trying to undercut an established monopoly.

I'm not saying that this sort of competition impossible or never happens, but it is not a given that insurance providers that are doing very well in their home state(s) are chomping at the bit to expand and go up against the monopolies in other states.

Capitalism is great at picking winners and losers, but once you are a winner, knocking somebody off the pedestal can be very tough and doesn't always work as well or as timely as our romantic notions about capitalism would suggest. It's not always about building the best mousetrap, sometimes it's about the most savvy exercising of financial/political power (e.g. takeovers).

Cross-state competition would be great, I'm not shooting down ebuddy's fantasy, I'm just saying that there are no guarantees there.
From my view they are the exact same thing. There is a reason why Walmart is upgrading all its Canadian stores to super centers this year, its to compete against Target which moves into our market for the first time. When I was visiting a Target in Washington a few months ago it really felt like a Canadian Tire but with cheaper prices. Target and Walmart competing in our market for lowest dollar is going to be devastating on Canadian Tire, Superstore and Zellers.
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Athens
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Apr 24, 2012, 01:24 PM
 
Originally Posted by besson3c View Post
Skeleton (can I call you that?),

Why do you think there isn't more competition within health insurance? Why do some/many areas only support one in-network provider?

ebuddy has been talking about competing across states, but what is stopping more competition within a given state?
I would assume government regulations of some form. Its common for big US companies to lobby for rules and regulations that are protectionist in nature. While technically not a monopoly it might as well be. A failure of LARGE governments that interfere with every little thing in the market place.
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ebuddy
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Apr 25, 2012, 07:08 AM
 
Originally Posted by besson3c View Post
Skeleton (can I call you that?),

Why do you think there isn't more competition within health insurance? Why do some/many areas only support one in-network provider?
The provider contracts with the insurer on set fees for specific services offered by the insurance plan. It helps the provider guarantee clientele. Out-of-Network means you'll pay more of the overall percentage of the cost of care. Why would you need to guarantee clientele in this manner? Because then you can offer some value, but do not have to aggressively pursue clientele with lower rates and better value knowing your clientele is beholden to only a handful of insurers. "Handful" meaning approximately 5 choices in most states. Of course, "socking it to greedy insurers" averaging a 3.4% profit margin does absolutely nothing for lowering the rates charged by providers. They charge as much as they do because they can.

ebuddy has been talking about competing across states, but what is stopping more competition within a given state?
I'll use the facilitative approach here; what do you suppose is stopping more in-state competition?
ebuddy
     
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Apr 25, 2012, 06:15 PM
 
B.C. to cut generic drugs' price another 10 per cent - British Columbia - CBC News

And I bet this makes many free enterprise people cringe
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ebuddy
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Apr 29, 2012, 12:52 PM
 
Originally Posted by Athens View Post
B.C. to cut generic drugs' price another 10 per cent - British Columbia - CBC News

And I bet this makes many free enterprise people cringe
Per your article, generics are 35% the cost of their brand-name counterparts. The legislation requires them to be @ 25%. I'd say if you really want to sock it to the free enterprise people, why not make generics 15% the cost of their brand-name counterparts or hell while we're on a roll here why not make them free altogether? This of course to address the insolvency of the system.

I wonder where they'll get the next batch of funds that will save the day... for a day or so.
ebuddy
     
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Apr 30, 2012, 06:10 PM
 
Just imagine the savings to both insurance companies and old people if the US legislated price controls on aspects of the Medical system and drugs. Might actually become affordable for people and insurance companies...

Totally against Free Enterprise of course and politicians would risk losing kick backs to keep it as costly as possible for joe blow.
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Apr 30, 2012, 06:38 PM
 
And if you outlaw unemployment, everyone would have a job. Right? If you outlaw hunger then only outlaws will go hungry.
     
Athens
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Apr 30, 2012, 06:45 PM
 
I don't actually agree with the principle of legislating the free market. But the medical community is hardly a free market to being with. Between Federal requirements and rules and a broken patent system that all create a monopoly situation the free market solution of competition does not work. The side effect of a totally free market solution to drugs ends up with lots of stuff with claims that don't work and hurt people. Its the chicken or the egg story. Before strict rules and requirements got put in place for drugs we had a free market with everything that could be claimed as a cure was. Now we have a situation because of rules and requirements its not economical for companies to invest in some kinds of drug research or competition in drugs already proven effective in the market. I was just pointing out a method to fix the pricing problems due to this government created monopoly situation.
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ebuddy
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May 1, 2012, 07:16 AM
 
Originally Posted by Athens View Post
I don't actually agree with the principle of legislating the free market. But the medical community is hardly a free market to being with. Between Federal requirements and rules and a broken patent system that all create a monopoly situation the free market solution of competition does not work.
Government meddling + Government meddling ≠ free market solution of competition does not work.

Compound the above logical failure with the defeatist notion that a freer market would certainly lead to lots of stuff with claims that don't work and hurt people. There's the ol' emotional tug I was looking for. Can you cite for me information from a documentary or cartoon or anywhere, that would substantiate the claim that government regulation is saving more people than it's hurting? For every anecdotal pharmaceutical abuse of the collective I'm sure you have on standby, how do you know there aren't at least two life-saving drugs or treatments that can't get to market because they're stuck in government red tape?

Government overreaction to horrific anecdotes leads to the situation you're complaining about. You can't have it both ways.
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May 1, 2012, 11:57 AM
 
Government overreaction to horrific anecdotes leads to the situation you're complaining about. You can't have it both ways.
I thought I said that....

But do you really think the clock could turn back for the medical profession. The big drug companies have a perfect setup to keep little guys out. The Doctors have pretty good protection in a monopoly on providing care. Got powerful lobbyist, unions and corporations using government to keep it that way. And the people would never accept lower standards in care either (i mean in government standards)
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