Warren Buffett: Fix prices, then progress

Discussion in 'Too Hot for Swamp Gas' started by tim85, Sep 17, 2013.

  1. QGator2414

    QGator2414 VIP Member

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    I think it was within the week I heard a few of the big boy hospitals were able to put a stop to or hold on some hospitals becoming trauma centers. I know Shands and I believe a Tampa hospital fought Ocala Regional from becoming a level 2 trauma center. I think Ocala won out but may have been a part of the thing I heard on the news as I have not researched it.
  2. sappanama

    sappanama VIP Member

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    genius i tell you. funny how you figure medicine out, but we are all to stupid to fix edumacation. brilliant
  3. RealGatorFan

    RealGatorFan Premium Member

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    They could profit if medical malpractice insurance didn't cost millions per doctor. We also need to rein in high costs of big pharma.
  4. rivergator

    rivergator Well-Known Member

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    In Jacksonville, Shands got the Florida Agency for Health Care Administration's OK to build a hospital in North Jax, but Memorial appealed saying it'd lose a bunch of money if Shands opened. And an administrative judge ruled for Memorial. AHCA agreed and Shands doesn't have approval to build the hospital. I think it's still trying, though.
  5. mdgator05

    mdgator05 Premium Member

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    This is a good point. In certain locations, state governments fill a similar regulatory role to other natural monopolies like utilities in the hospital industry. These state governments might be able to encourage competition, but as you noted, there are policy arguments against competition in natural monopolies or oligopolies (ie. firms will be more hesitant to invest in new major fixed costs).

    Ultimately, the concentration in the hospital industry is difficult to deal with either from the perspective of a purely free market solution (which might cause completely unregulated monopolies or oligopolies) or from a public/private solution (which can serve to diminish competition themselves in the name of at least having some form of control over the monopoly/oligopoly).
  6. demosthenes

    demosthenes Well-Known Member

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    I think you're minimizing ongoing maintenance, upgrade, and expansion costs. I work for a GC that has a hospital branch and have seen first hand the amounts established hospitals spend too keep their facilities up to date. One particular hospital we work with is in a perpetual state of construction with no less than two projects going on at all times. Obviously breaking new ground will be more expensive but like any new business you're not expecting to turn a profit from day one. I'd guess that the biggest deterrent to new hospitals is the difficulty in obtaining the large amount of capital required to startup.
  7. mdgator05

    mdgator05 Premium Member

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    No doubt there is a huge amount of maintenance. Some maintenance (such as new buildings or some portion of janitorial, repair, etc.) are certainly fixed costs and require the hospital to be able to run many people through, deterring entry. Some are variable costs (ie. extra cleaning or staff due to more patients). This can be passed through to the consumer.

    Definitely agree on your last point.
  8. demosthenes

    demosthenes Well-Known Member

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    Is this some kind of joke? You really think malpractice insurance costs millions per doctor? Wow.

    First, it varies by your practice. Second, you aren't even close to the ball park of the cost of medical liability coverage. Third, everyone blames insurance and attorneys until they or a loved one is the victim of med mal.
  9. mocgator

    mocgator Well-Known Member

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    I love you Nana... but you don't know what you are talking about here.
  10. brainstorm

    brainstorm VIP Member

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    To the consumer or insurer, the "prices" doctors/hospitals/pharmacies charge "costs" us a lot.

    But, medical "costs" and medical "prices" are not the same thing. The providers have a cost to produce a particular service/product and then calculate a price to charge for such service/product to cover costs and make a profit. If they can reduce the costs of providing these products and services then they have the potential to reduce prices charged to medical consumers while maintaining the same profit.

    The systems of reimbursement that utilizes allowables, etc. may not be very compatible to such cost reductions.
  11. tegator80

    tegator80 Well-Known Member

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    Unless our system is reformed to have a real impact to the finances of the insured, as well as the doctors/hospitals, then anything that is tried is going to ultimately fail. Our predicament is, or was, that the insured are given a plan that does not give them any incentive to save money. It is mostly a "use it or lose it" setup. And when you add in the idea that large groups have a greater advantage over small/individual groups then you have the recipe for runaway costs and employees who are beholden to their employers for affordable healthcare.

    I still say that the best way of reforming healthcare costs, besides having more intelligent people, is health savings accounts. THAT puts the financial incentives back into the system. And if the people aren't sold useless or unnecessary care (see prescription drug commercials) then the doctors and hospitals would have to adapt or die.
  12. Gatorrick22

    Gatorrick22 Well-Known Member

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    A reasoned explanation of how competition works to save the consumer money... and by extension/definition delineates why the single payer system will always cost the most to the consumer.
  13. mdgator05

    mdgator05 Premium Member

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    Why would a profit maximizer maintain the same profit instead of increasing profit with the reduced costs? For example, say a monopolist hospital starts using a new procedure lowering the cost of a bypass by $1,000. Why would they pass it on to the consumer? Do you think demand would change in any way to make the $1,000 less in profit per patient worth it?
  14. Row6

    Row6 New Member

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    What Buffet - and many other critics - fail to include in their prescriptions is that what is desirable in a well thought out solution to a problem is not what is possible politically when you need about 300 votes in the House and Senate to pass it. There were more stringent cost cutting efforts included in the original version of the bill that were jettisoned, much of it due to "death panel" demagoguery from the right. There is a reason this law took 40 years to be passed and signed after Nixon made it a priority of both parties - it involves major power players with plenty of lobbying power and is susceptible to the kind of demaguegery which has so many against it who have no idea what it includes.

    The accomplishment is that we have a law which gets it's arm around the problem, even if it's handling of it will be clumsy. An intelligent opposition - which stayed on the sidelines throwing rocks when it was going through Congress - would work to reform and improve it rather than pretending it could be repealed with nothing to replace it. We are headed for a stone wall (mid 2020's) on the federal level and don't have time to go back to square one, especially with no alternative plan, let alone one that would pass Congress.
  15. tim85

    tim85 Well-Known Member

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    I think "clumsy" could be an understatement. Some Liberals and others are so gun-happy for any kind of "progress" or change that the whole initial reason for wanting progress to begin with is neglected. What's the point of "progress" if it doesn't actually make anything better? I keep seeing things like, "get its arm around the problem," or, "it's not perfect, but at least it's just a step in the right direction," the fact is -- you don't know that. You hope and think it could, but as evidence has so far shown, the thing is so bloated no one has any idea on how it's really going to affect American's lives.

    Why not work a little harder to do it rightly the first time? Prepare a bill before it gets passed - tear it apart, put it back together, work out the kinks. But instead - we have just the opposite. I keep reading how foundational this thing is supposed to be from those on the left(who have to be pretty embattled over it at this point), it's supposedly a legacy-builder for Obama and foundational for a "single payer system," you would think with something like that they would be a little more careful. But the fact is, this administration has seemingly politicized the law so much, and just rammed it through without any true carefulness, there's bound to be needless mistakes.
  16. leogator

    leogator Well-Known Member

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    They have already tried that.

    The majority of the medical expenses in this country are in the last 6 months of people's life. Find a way to reduce those and you reduce the outlay.
  17. leogator

    leogator Well-Known Member

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    You got it nana!!!!!!
  18. leogator

    leogator Well-Known Member

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    There's only a few major insurance companies and they provide health benefits in pretty much each state. What kind of competition do you want?
  19. leogator

    leogator Well-Known Member

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    In my wife's first birth she shared a room since she had a C section. The second was born naturally and she was out of there the next morning. But she did not have to share a room.
  20. leogator

    leogator Well-Known Member

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    In my area we have two hospital chains. Both had room occupancies in the 50% when they were avoiding competition. When they expanded into each other's areas they plummeted into the 30%. Now they are pressuring their network of physicians to refer more. And no you cannot have priviledges in both. So no competition.

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