My understanding of the Robinson Patman act is that it was specifically designed to exclude both legal and medical services, so I am not sure it pertains to this discussion. In fact, I believe this amendment to the Clayton (anti trust) Act was designed to protect small businesses against large retailers. I may have misunderstood your explanation, so please forgive me if I am going too far off the mark here.
In my experience, it has been the insurance companies who have been setting prices that they are willing to pay for services, and that hospitals and doctors are required to accept the fee schedule if they want to be included as a provider under the insurance plan for a particular employer or set of employers. If the doctors/clinics choose not to accept the contract with the insurance company, then they effectively cut themselve out of the opportunity to provicde services for large segments of the population. Not only is this not good for business, but it runs contrary to the desire of most medical practitioners to provide necessary medical care to patients, including ones of limited economic means. Employers offer insurance as a way of attracting and keeping good employees. I know that many people take the overall benefits package into consideration before accepting employment, but this option is limited to those who are fortunate enough to have a range of choices in their employment. Of course, there are those patients who are unable to obtain insurance that is affordable: those who are unable to find full time employment, or whose employers offer insurance plans that are not affordable. Generally speaking, for people in this group, any medical expense, however modest, is a strain on the budget.
Ultimately, if someone without insurance or with inadequate insurance needs medical care, one of a few things happens: Care is obtained in ERs--the most expensive place to obtain care. Care is even more expensive at this point than it would have been if treatment had been sought at an earlier stage in the disease. OR Care is obtained, but the patient is unable to pay, so the provider absorbs the cost and then passes the cost on to other patients, ie you and me. OR Patients get medical insurance through state channels, again through you and me and our tax dollars. Generally, one must be very poor, very ill, old, or a child or pregnant woman to get care this way. Not for your average working guy with appendicitis or a hernia needing repair. Sometimes, patients do arrange to make payments on their care, long term. This is often difficult for the patient, who generally does not earn much and has very little room in their budget for medical expenses. The clinic or provider must continue to bill (an added expense), and credit can be affected. Plus, if you are sick, you miss work and may not get paid, making it even more difficult to pay your bills. If you are making $8/hr, $100 for office visit and antibiotics for strep throat is pretty major, so a lot of people simply do without care until it is so bad they end up in the emergency room.......
I looked at the MCHA price charts. While the prices offered here might be affordable for some, for people making under $11/hr, ie a very large portion of Winona, the rates are simply not affordable if you also need to pay rent, utilities, and purchase food and occasional articles of clothing. You don't have to convince me that the school district --and the city, and the county-- should be able to get a better deal than they are getting on insurance. I do not see why all governmental entities in the state, including school districts, municipalities, counties, and any other governmental body I am overlooking, cannot choose to participate in the same health plan coverage offered to state employees: the coverage is cheaper and better (although you have more and better options if you live in the metro area, as do most lawmakers in this state). I don't think local government bodies should be required to participate if they find other, better options, but there simply is no justification for not being allowed to participate. We would all be winners: taxpayers and employees alike. I also believe that small businesses should be able to form a large, perhaps state-wide group for insurance purposes. I know that providing medical insurance is a major expense for small businesses but I feel no sympathy for large, wealthy corporations who can easily afford to do better by their employees.
Terri Hyle
From: "Paul Double" <[EMAIL PROTECTED]> To: "On Line Democracy" <[EMAIL PROTECTED]> Subject: FW: FW: [Winona] Re: Health Insurance costs Date: Sat, 13 Sep 2003 20:40:09 -0500
Terri and others
Lots of question so little time
In 1936 the Robinson-Patman Act was created to provide fair pricing between competing businesses. It was followed in 1938 with the Non-Profit Institutions Act. See attached
http://www.lawmall.com/rpa/rpadrugs.html
The intent of the Robinson-Patman Act was to eliminate unfair pricing
policies between competing entities. It was enacted to stop vendors from
agreeing not to sell products or services to a competitor of their customer
thus directing the business to one seller enabling them to set prices since
competition is not allowed to take place. While this is a simplification of
the law it was designed to open markets and competition thus providing the
public with lower prices. Non Profits, such as hospitals, as an example can
purchase drugs used within the hospital for less money than your local
drugstore even if they are 50 feet away and the same drug etc. While that
may make sense to some the non profit exemption has been miss used to
provide discounts to insurance companies, Medicare and others which compete
but not under the same pricing rules. Thus cost shifting occurs and those
who can pay may do so at such a premium over what someone else just because
their insurance company has driven a harder bargain on the threat to the
Hospital or clinic that they would be out of their network if they didn't
cave in to the price concessions or refuse to provide similar prices to that
insurers competition.
This then leads to the control of the healthcare market as "their network"
is reinforced by them undercutting the policy premium, locking in employers,
forcing providers to give them special deals, on the intimidation that they
may set up their own clinic and to force the market to be owned by them.
Once competition has closed their doors they can then raise premiums,
further cut or delay provider payments as they own the check book on the
market.
When providers ban together to fight the insurance companies they tend to collaborate (fix prices) which is illegal and will get them is serious hot water. There is lots of information on this at the FTC Federal Trade Commission website.
When providers do not offer their lowest negotiated prices to all competitors they collude with the negotiated party to control who will do the business and what we all will pay since we are forced to buy the policy to get the discount, then forced to use their providers to get the price. That what the Robinson-Patman Act Prohibits and why it is law and why it is important.
-----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of terri hyle Sent: Saturday, September 13, 2003 9:22 AM
Paul, I need to confess a great deal of ignorance. I have no idea what or
whom you mean by 'non profit providers'. Are you talking doctors?
Hospitals? Clinics? How do non profit providers come under the FTC or the
Robinson Patman Act?
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Are you also saying that group plans are more expensive than individual
plans?
We have not yet found a Small Business Group Plan, and we have first hand
knowledge of many, that have been priced lower than individual policies with
the same benefits and employee pool. Remember that in Minnesota MCHA is
available to anyone in a group who is denied individual insurance because of
health related problems.
There are but two issues in healthcare when you sort it out.
1- The price we pay must provide a fair profit for the providers
2- The ability to pay and what is affordable for the least of our brothers or sisters.
The Robinson-Patman Act enforced or price controls solves number one. A government subsidy is the only thing that solves number two. It is that simple or politically complex.
If insurance is the problem, what is the answer for those who incur large
medical expenses? See MCHA if you believe you must have group insurance to have insurance.
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Or, for low wage earners, ordianary, but routine medical
costs (strep throat leaps to mind here, but could be badly sprained ankle,
etc.)? A government subsidy is the only way
__________________________________________________________________________
Do you think we'd be better off without insurance?
Yes Medicare contracts with "private companies" to process their paperwork
and those companies are able to make a profit. Private companies can process
payments to providers efficiently and for about three percent. To the best
of my knowledge there are no insurance companies, profit or non profit(ha),
who operate on that margin today. That cuts healthcare cost by 9 percent
assuming the insurance companies' numbers are correct when they claim they
pay out 88 % of their revenues in claim payments.
Let me plant this seed for the discussion - What for profit industry, processes payments the most efficient, is in almost every community in the nation and has been empowered by congress to take on the insurance industry as a direct competitor?
Paul Double
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