Is single-payer health care a feasible evolutionary option?

by on September 14, 2017 at 7:24 am in Current Affairs, Medicine | Permalink

I say no, in my latest Bloomberg column.  For some of the arguments here, I am indebted to earlier work by Megan McArdle.

1 Anonymous September 14, 2017 at 7:54 am

We do also hear from Trumpian populists who would like single payer .. but I agree wholesale change is unlikely. So, a public option to feather in the same thing?

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2 Anonymous September 14, 2017 at 1:28 pm

Sorry, I didn’t read the article.

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3 Anonymous September 14, 2017 at 1:50 pm

It makes a question of one conclusion. Coincidence? We will never know.

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4 JMCSF September 14, 2017 at 8:11 am

There is never going to be a satisfactory solution for all because there is no such thing as a free lunch.

One assumption made in this column is that private employer insurance will remain popular. It would not surprise me at all if employers became stingier with their health care plans. The more employers pass increases onto employees the less happy people will be with private insurance.

You could also argue that from high deductible plans, Americans with insurance already consume less health care.

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5 Bill September 14, 2017 at 8:15 am

Agreed, there is no free lunch.

But, some lunches cost more than others.

We need to introduce more competition in healthcare and address market failure.

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6 Anonymous September 14, 2017 at 8:28 am

Competition, but not at the wrong level.

As a recent experience, my friend and I had similar pains in our knees. My friend’s PPO granted an immediate MRI, and then “clean up” orthoscopic surgery. My HMO said “no MRI for you!” and sent me to physical therapy. The punch line is that we have similar outcomes.

If “competition” is just to lower prices of unnecessary scans and surgeries it might not be saving that much.

On the other hand, if a single payer or public option steers toward HMOs, competing on total cost, you might have something.

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7 JFA September 14, 2017 at 9:37 am

Given the cost/mile of transportation projects in the US, why would anyone expect a politically viable single payer plan in the US to lead to lower costs? Does the US government do anything cheaper than the average OECD country? That’s not a rhetorical question. Please give examples.

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8 Anonymous September 14, 2017 at 9:50 am

If 80% of Americans live in cities, maybe that is the main target for a national policy.

9 mulp September 14, 2017 at 4:12 pm

The biggest reasons transportation projects in the US cost so much is due to the FIRE sector.

The labor costs, direct and indirect, of the Big Dig is 50% of the cost to taxpayers.

Without money to pay for work in a timely fashion done with full recognition of property rights, the project was delayed for decades during which new development increased the cost of respecting property rights. And many design decisions were forced by lack of money but a requirement to complete the project, decisions that then required rework as new decisions were forced by reality, and reality forced yet more debt with future generations left paying interest.

In many places, including the US, the private sector simply bulldozers your house to get their work done, then fights the claim you make for your losses, claiming your house was obviously a slum dwelling not worth the mortgage you owe. Or they simply go bankrupt.

Just heard the headline for Equifax news, which is a great example of the private sector being so much better at stopping fraud than government, and make a great profit at it: to prevent fraud from your data stolen from Equifax you can pay Equifax to protect you from fraud by using the data stolen from Equifax. And while it’s true that taxpayers always pay, tax payers get to fire the management in government for screwing up, but Equifax and most other corporate management are extremely insulated, thanks to conservatives’ Congressional policy efforts that argue the private sector protects the people better than government can. No EPA because industry only pollute because of EPA mandates, no OSHA because industry kills workers only because OSHA mandates workers crawl into running machines, no consumer protection because businesses always place consumers above profit and will always lose money treating sick patients instead of rationing care.

10 anon September 15, 2017 at 8:56 pm

@mulp
The Fair Credit Reporting Act of 1970 essentially treats the consumer credit network as a public utility. Equifax, TransUnion, and Experience may be publicly traded but they are also quasi public.

It’s the worst of both worlds. The credit reporting agencies are beaurocratic, slow, error-prone entities that avoid the full costs of failure due to public support and also avoid the incentive to improve that comes from rigorous competition.

11 carlospln September 15, 2017 at 1:24 am

If you’re talking about a medial meniscus cartilage tear, an orthopedist doesn’t need to order an MRI to make a reasonable determination of this.

And arthroscopic surgery on this is no better than a placebo.

http://www.abc.net.au/health/features/stories/2015/03/25/4203985.htm

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12 Anonymous September 14, 2017 at 8:31 am

(The HMO claims that it is not my knee at all, and I just need to stand on one leg with my eyes closed.)

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13 Dan Hill September 14, 2017 at 8:31 am

“It would not surprise me at all if employers became stingier with their health care plans.”

They already have. Many large employers have moved from a default position of very small deductibles a decade ago to the sort of deductibles criticized in Obamacare plans. I work for a Fortune 500 company; my deductible is $7,000.

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14 JFA September 14, 2017 at 9:34 am

Was that the only option? From my experience, most large and many medium sized companies offer multiple plans, including generous PPOs and high-deductible plans. If it was your only option and you value healthcare a lot, you might want to change jobs.

Also, what’s your premium? I would hope low.

Also, if you have job that pays even a moderate salary, it’s not difficult to save up for your deductible (especially if you have an HSA). Just forgo a couple of phone upgrades and adhere to a couple of other common sense financial planning techniques and you’ll get there in no time.

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15 static September 14, 2017 at 10:26 am

Why change jobs? High deductible plans are a net good for the economy and the health care market. They are insurance plans, as opposed to pre-paid care plans you might not use, and paying for care that it is within your budget to afford. The tax advantages of HSAs also make high deductible plans attractive.

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16 Hoosier September 14, 2017 at 11:48 am

Tell that to the guy I knew who refused to go to the emergency room because it cost too muchb after not being able to remember what happened to him 10 minutes earlier after falling off his hover board. We tried everything we could to convince him but he wouldn’t go. I guess that’s the society we’re moving towards: if you’re too dumb or on too tight a budget, roll the dice with skipping the doctor.

17 JonFraz September 14, 2017 at 3:59 pm

My deductible on both my auto and renters policies is $500. Does that “small” deductible mean that neither policy is a true insurance policy? Why should the size of a deductible matter at all in that definition? And if someone proposed an auto or home owners policy with a 7K deductible (for anyone not seriously wealthy) we’d all say it was way too high, and banks would, for very good reason, refuse to make mortgages and car loans to people with thst large of deductible.
Well, healthcare is no different and it’s insane that people of modest means (and by that I mean the bottom three income quintiles, an maybe parts of the fourth) to have 7K deductibles on any kind of insurance. Most people simply cannot scrape together that much money– many cannot even lay hand on 500$ in an emergency. So for health insurance let’s get back to the same sorts of deductibles we have in other insurance.

18 mulp September 14, 2017 at 4:46 pm

“The tax advantages of HSAs also make high deductible plans attractive.”

What is the tax advantage of $1000 paid into an HSA based on the long term risk cost of a $7000 deductible vs the extra $1000 cost of insurance to have a $20 copay?

A few years back I compared the costs of the two option Indiana State government offered as they transitioned to high deductible. The State offered a low deductible plan for the same employee cost as the high deductible plan that included a set dollar contribution to the HSA. Ie, the single employee paid like $20 either way, and the State put like $1000 in the HSA account if you chose the high deductible option, and the cost to the government was presumably the same in either case, given the cost per pay period was based on the HMO or insurer premium to the State minus the State contribution per employee, ie, free market competition on risk management and care delivery/payment.

My sister had her policy switched to high deductible plus HSA circa 2000 and other than more complicated paperwork, the cost of her surgery from genetic lottery bad luck (that I and our brother share) before and after was the same. Trust me, none of us wanted the surgeries whether paid for by insurance (my sister and I) or not (our brother, whose costs of diagnosing resulted in his employer business having its insurance cancelled).

19 Buddy September 14, 2017 at 4:46 pm

I have $5,000 deductible on my HOI policy and no collision insurance on my autos. People pay for low deductibles because they are loss averse. If you have the money to self-insure, you should do so to the extend you can. It saves money.

20 mulp September 14, 2017 at 6:33 pm

“no collision insurance on my autos. ”

And no uninsured motorists insurance and oppose State driver responsibility laws because you will always be in your car even when parked to ensure no one runs into your car?

21 byomtov September 14, 2017 at 7:50 pm

It makes perfect sense to cancel collision coverage at some point. For some people it might even be the day they pick up the car.

22 JonFraz September 15, 2017 at 2:29 pm

Buddy,

Most states require some level of auto insurance (which I assume you have), and lenders definitely require loss insurance on mortgages and auto loans. In fact my current car loan required more comprehensive insurance than I had (and had had for years) which I regarded as quite comprehensive.

23 Albert September 14, 2017 at 11:37 am

You can’t skip a couple phone upgrades, you have to pay the deductible every year. You’re not upgrading your phone multiple times a year and it’s not anywhere’s near enough to cover most deductibles.

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24 JFA September 14, 2017 at 12:52 pm

You actually don’t have to pay the deductible every year. You only pay when you have some sort of medical visit. And given that the median expenditure per person is about $1400, of which only 12% is out of pocket, (data for 2015 from the MEPS), I was assuming that the dude was not actually spending 7 grand on medical care per year. So what you do is save up enough money to cover your deductible and there you go. Skipping a couple of phone upgrades moves you a long way to covering your deductible.

25 Albert September 14, 2017 at 1:00 pm

Technically true but how is that helpful? It’s really easy to create a medical system that is cheap and effective so long as you don’t have any actual medical needs. Anyone can offer insurance that covers nothing.

If you actually need medical care, that deductible is a major problem that phone upgrades won’t solve.

26 Anonymous September 14, 2017 at 1:31 pm

I think the point is that when you don’t need medical care, you save the money and when you do need medical care, you have the money you saved to pay the deductible.

27 JFA September 14, 2017 at 2:45 pm

Thank you, Anonymous.

28 Anonymous September 14, 2017 at 4:44 pm

The complete lack of medical bankruptcies demonstrates the brilliance of my theory, nay the proof.

29 Buddy September 14, 2017 at 4:47 pm

If you’re declaring bankruptcy over a $7,000 deductible then you have other problems

30 Bob September 14, 2017 at 10:44 am

It’s not about company size, but about median employee salary. An employer will shrug at covering $1600/mo plans for people making six figures, but it’d be a huge part of compensation for someone making close to minimum wage. Average age and family size makes a difference too. So if you are shaped like Google, you can offer great health insurance, while if you are shaped like Home Depot, Obamacare bronze plans look better than what you are likely to offer.

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31 JonFraz September 14, 2017 at 4:02 pm

Home Depot’s work force looks fairly young.

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32 Buddy September 14, 2017 at 4:48 pm

Home Depot offers good health insurance benefits

33 Josh September 14, 2017 at 10:59 am

Yeah, anecdotally I have been seeing the same things. I was at a decent size public company $5 billion+ market cap, very profitable, and they transitioned to either HDHP PPO’s or a Kaiser HMO from Kaiser and UHC PPO. The premium for the “Gold Plan” HDHP was $450 a month for the family which was pretty much the same as the prior ppo premium. I’ve received offers and looked through the benefits of 4 different large public companies that people would recognize and the story seemed the same. I am hearing the same things from all my friends and family that work for big corporations as well.

Thankfully for me I moved to a Tech company and the insurances are great, ppo no deductible tiny copays, premium covered by employer. I have to think though that as a lot of these tech companies become more mature or see slowing of growth rates there will be shareholder pressures to do the same thing that these “mature industry” large companies have done.

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34 Dick the Butcher September 14, 2017 at 8:38 am

You could argue that in a free state, the magistrate could not require citizens to buy anything. The basic human right to whatever ends at the point where the state confiscates/taxes from some citizens to pay for others’ benefits.

You could argue that young, healthy people should only be required to by “major medical” insurance.

You could, for fun, spend six hours in an urban hospital’s ER and see who’s consuming more. I did after one of you kids (texting?) ran a red light and totaled my car. It was enlightening. A dozen (six in wheel chairs, oxygen bottles weighed 400+ lbs.) were on first-name basis with the ER staff.

Lack of personal responsibility and unhappy life-style choices are huge contributors.

Is part of “market failure” the result of the market or of political/regulatory engendered perverse incentives?

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35 Art Deco September 14, 2017 at 9:05 am

I used to work in that setting. A great many of the clientele were people who had some sort of insurance (e.g. Medicaid), arrived with banal problems, and then skipped the follow up appointments they were given at the ambulatory clinics. There was not in that era a toll charged and prompt-cares are attractive to people with limited time horizons and deficient executive function. Some of this excess use of emergency care can be obviated by placing deductibles on publicly-financed insurance, but you’re always going to have people who interact with the institutions of this world in a suboptimal fashion.

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36 Becauseimblackyoshi September 14, 2017 at 9:45 am

Everyone without insurance goes to the emergency room in public hospitals. That is paid for by taxpayers anyway.

They are on first name basis with the ER because that is the only place they can be seen for free.

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37 mpowell September 14, 2017 at 10:52 am

What I wonder is, how inefficient is it if the emergency room staff just triage these clients properly? The sticker price is much higher, but it would seem that the ER would know how to provide exactly the same level of service as a generic clinic when appropriate. It creates all sorts of cost distribution headaches, but is it really as economically costly as it would seem?

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38 Art Deco September 14, 2017 at 12:21 pm

The place I was employed had a triage nurse.

39 BecauseImblackyoshi September 14, 2017 at 2:01 pm

You have to be kidding. Emergency services are far more costly than a standard doctor visit.

40 Anonymous September 14, 2017 at 2:22 pm

They charge more, but does it actually consume more resources? Or is it just price discrimination?

41 Potato September 14, 2017 at 5:26 pm

It’s a question of capacity and human capital capacity. Awkward phrasing, but true.

An ER doctor has to be on staff whether you come in with a GSW or a sniffle. And because it’s the ER, the service rate for immediate needs has to be 99.99%. Think about the Z score and do the math of what your labor costs are for “safety stock” of doctors. Then think about the nurses working 2nd shift with a differential, then think about 3rd shift with a differential, then think about support staff, etc ad nauseam.

It’s just an OR optimization problem. The costs are going to be much higher. And they are legally barred from turning people away, even if their issue is bs.

I do love the hilarious Art History major approach to real world problems like queuing theory and service rate. It’s funny when you don’t think about how these people vote and outnumber us 100 to 1.

Change the law and say ERs can turn patients away and give them legal immunity for doing so. Then a rational outcome will “magically” happen.

42 buddyglass September 14, 2017 at 1:33 pm

It could be the case that the vast majority of people would prefer a system where the cost of paying for their healthcare is obscured, possibly by virtue of being rolled into their tax bill. No free lunch, but the *appearance* of a free lunch. Or, at least, a lunch whose cost is not directly perceived even if it’s acknowledged to exist.

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43 JonFraz September 15, 2017 at 2:31 pm

Not too dissmilar from the fact that quite a few people like automatic bill pays where the money comes out of their account without their having to do anything.

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44 Roy LC September 15, 2017 at 6:28 pm

As long as there is a tax advantage employer insurance will continue to exist

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45 Bill September 14, 2017 at 8:14 am

Agreed. Not in favor of single payor, so long as we introduce more competition in healthcare. Single payer makes sense only if there is market failure.

I think we need more competition in healthcare.

I. To begin with, we can start with repealing or pre-empting Any Willing Provider statutes–designed to protect doctors and hospitals from competing to get into networks.

“Abstract: Any Willing Provider and Freedom of Choice laws restrict the ability of managed care entities, including pharmacy benefit managers, to selectively contract with providers. The managed care entities argue this limits their ability to generate cost savings, while proponents of the laws suggest that such selective contracts limit competition, leading to an increase in aggregate costs. We examine the effect of state adoption of such laws on total state healthcare spending, finding that any willing provider/ freedom of choice laws are associated with cost increases of at least 3 percent. These results suggest that these laws are harmful from a spending perspective.” http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1437&context=faculty_scholarship

II. Uniform benefits and No Medicaid Block Grants to States

If the federal government pays for medicaid, but has no control, this is an invitation for disaster–local medical societies will pressure the legislature to raise reimbursement and restrict access to pay for the higher resulting costs. Today, doctors and hospitals do not like Medicaid because they do not get as much money as they would otherwise. too bad. Insurance providers do not pay anything the doctor wants…often they set payments based on what will attract 80% of providers, or they create networks that share risks with providers. If you want to see people retire in Florida and when they need care move to another state, you will have that with block granting in a minute. Also, block granting gives states the opportunity to skim federal money for administration, directly or indirectly (e.g., directing patients to state facilities which may charge more).

III. If we do not improve competition in healthcare, or if we do the block grant, then I would go to single payor for a market of 55 or above, or institute cost share equivalent as a single payor in rural markets where there may be market failure. If you want to take federal tax money, you need to accept the fact that the payor has to control how that money is used, or otherwise it will be a rip off.

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46 chuck martel September 14, 2017 at 9:25 am

There can’t be a “market failure” when there isn’t a market.

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47 Bill September 14, 2017 at 11:49 am

Chuck, I don’t know how to interpret that, but goods are exchanged for money for healthcare. You might question incentives, value, options for the consumer, etc., but there is a place where transactions occur. If you are saying that in some or all markets there is some or much market failure, I agree. But, there are many ways to deal with that.

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48 chuck martel September 14, 2017 at 2:06 pm

Tax payments are an exchange for something or other. Nobody calls that a market. Markets can be manipulated or degraded in such a way as to produce failures. An unimpeded, free market can’t fail.

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49 byomtov September 14, 2017 at 7:55 pm

Come on, Chuck. Of course an unimpeded free market can fail. Ever heard of the lemons problem, to cite one example?

And of course there is the whole externality issue where markets fail in that they produce quite sub-optimal results.

50 Becauseimblackyoshi September 14, 2017 at 9:54 am

Fuck block grant.

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51 Axa September 14, 2017 at 8:17 am

43% of citizens have clear all of us are going to be old and sick eventually………of course, the ones dying young are not going to be old and sick.

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52 A Truth Seeker September 14, 2017 at 8:23 am

“of course, the ones dying young are not going to be old and sick.”
Those guys have it easy.

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53 Tom T. September 14, 2017 at 8:25 am

Certainly, it’s hard to see a winning slogan in “we screwed up the last health insurance expansion, and now we’re going to take yours away.”

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54 Art Deco September 14, 2017 at 8:26 am

Single-payer for all (or all bar s/t temporary residents, sojourners, and illegal aliens) is feasible so long as the share of discoverable personal income allocated to publicly-financed medical and l/t care is fixed. That means no first-dollar coverage and high deductibles. The political class hasn’t attempted to vend this to the general public and it’s a reasonable wager the innumerate lawyers who populate Congress are not clear about what are the structural defects of the current system.

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55 prior_test3 September 14, 2017 at 8:37 am

How do other countries like Germany actually manage to not bother with that ‘no first-dollar coverage and high deductibles’ while still having health care costs that are a 1/3 less than America’s?

Admittedly, Germany is not a single payer system using what seems to be the current American definition of single payer.

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56 Art Deco September 14, 2017 at 9:08 am

You can ration with prices, you can ration with administrative regulations, you can ration with queues, but you must always ration.

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57 The Cuckmeister-General September 14, 2017 at 9:17 am

I always picture you as Meryl Streep from The Devil Wears Prada.

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58 Art Deco September 14, 2017 at 9:18 am

Well I do try hard to cultivate the bitchy femme demeanor.

59 JonFraz September 14, 2017 at 4:05 pm

And what’s wrong with queues? They treat everyone equally after all (and presumably triage on the basis of need in cases where serious health problems are involved). I just had a minor outpatient procedure done this morning– for which I had an almost three month wait for an appointment, and yes I am in the US.

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60 Potato September 14, 2017 at 5:30 pm

Let’s do that for everything then. Everyone can decide how long they’re willing to wait for food, water, gasoline, consumer goods.

We already do it for movie premieres. Let’s make everything paid for by taxes and then make them line up for bread.

I’m sure your approach is a novel one and has never resulted in millions of deaths.

61 JonFraz September 15, 2017 at 2:33 pm

You’re talking about normal and often very affordable things, not uncommon and often very expensive things. moreover we do have queues even for small purchases, though they are brief queues: the time you spend in line at the store, or the time it takes an online purchase to reach your address.

62 Floccina September 14, 2017 at 11:37 am

@prior_test3 How close to German health insurance did the ACA bring us?

From my view it looks pretty close, though the penalty is to low to get us to Universal coverage.

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63 Ricardo September 14, 2017 at 2:01 pm

America’s system most closely resembles those of Switzerland and the Netherlands. Both require residents to purchase health insurance offered by non-state entities. Singapore recently lowered deductibles and required all citizens and permanent residents to buy into the state-run health insurance so it is basically Obamacare but with insurance directly provided by the state (private supplemental insurance is still available, though, so it isn’t “single-payer”).

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64 prior_test3 September 14, 2017 at 8:51 am

‘There’s an obvious problem with moving Americans to a single-payer system: Most people with private health insurance are pretty happy with their current arrangements.’ – Possibly because they are not familiar with a system like Germany’s, where you can basically go to any doctor in the country whenever you need to?

‘Instead, the public option might be set up to attract those who don’t already have good coverage. But those are the same people who don’t have the money to pay a fair market price for health insurance now. ‘ – How is it that the rest of the world can solve the basic problem of providing good coverage to everyone at a price that is at least a third less than what America pays?

‘Typically those systems were instituted while health-care costs were still fairly low, and then kept down by government fiat.’ – That is not the reason. The German health care system, for example, does not use ‘government fiat’ to hold down prices. What does happen, however, is that the large Krankenkassen determine how much and for what they will pay for. One would think that using such market power would lead to lower prices – which amazingly is actually the case in Germany.

‘The U.S. is not in that position, and it’s hard to see doctors and hospitals — powerful lobbies — going along with significant cuts to their payments.’ – Yep, America is truly messed up. Even worse, there is no way an entire unnecessary but profitable American industry will remove itself from the health care trough. America’s health insurers do not provide much in the way of necessary service when viewed from a country with lower health care costs, where the Krankenkassen in total probably cost less to run than Aetna’s profit from 2016.

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65 Alan Goldhammer September 14, 2017 at 9:08 am

I’ve been following this issue going back to Paul Ellwood’s Jackson Hole meetings a lot of years ago. I agree with prior_test3 comments and think that Tyler’s Bloomberg piece is pedantic and doesn’t address the fundamental issue that other countries can provide health care at a lower price than the US. Of course the current situation will continue to fester as long as the corporate tax break on employer provided insurance exists. One wonders how long this will be the case in light of the desire to reduce corporate tax rates. Other countries do not burden their corporations with having to pay out for employee health insurance and it’s never an issue during contract discussions with unions (of course unions in the US are fast disappearing and perhaps they won’t have any leverage either).

Tyler and others would do well to read TR Reid’s wonderful book, “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care.” Though written in 2009 (much of the research was done during the previous four years while Reid was a foreign correspondent for the Washington Post and used the health care systems in many of the countries he covers), it points to a clear path forward. In addition, Victor Fuchs (one of the foremost health economists) and Zeke Emanuel proposed a voucher system that would rely on the private sector health insurance companies for coverage. In short, there are multiple approaches to universal coverage and ‘Medicare for All’ is only one model.

the current system is sick and won’t be getting any better.

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66 Anonymous September 14, 2017 at 10:00 am

+1

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67 Hazel Meade September 14, 2017 at 10:44 am

I agree that the employer-provided system is the root cause of many problems. That it disincentivizes people from supporting government-run health care models isn’t one of them.
If we got rid of employer-based health insurance, the private insurance market would function much better, or at least would in pre-ACA conditions without all the mandates on essential benefits, guarenteed issue and community rating. Having a real market for individual insurance would solve a lot of the issues those were intended to address though. The big stumbling block is the fact that the left will not accept any proposal that doesn’t socialize costs.

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68 Gil September 14, 2017 at 11:53 am

I mostly agree, the employer provided stuff seriously mucks up the individual market and I think more importantly, it also distorts the how “the public” views health care. What people want is what they will get from an average employer because that is the only thing most people have ever known.

People want essential benefits, guaranteed issue, community rating and socialized costs….these are, after all, things that you would get from an average employer. Essential benefits maybe has some wiggle room, but if an employer tried to get rid of guaranteed issue, community rating or socialized costs, the employees would scream bloody murder. Can you imagine the job interview? “We don’t know if we will offer you health insurance or not, or what it will cost if we do; it depends on how your health screen goes and what your health history looks like.”

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69 Potato September 14, 2017 at 5:41 pm

God forbid an employer know in advance what they will pay an employee. I can scarcely imagine a world in which that was predictable! Monsters, being able to calculate a wage!

I agree the system we have is almost absurdly stupid. And unfortunately the government is required to solve this collective action problem, due to information asymmetry. The government should just give everyone catastrophic insurance based on 15% of income. Anything over 15% is covered by the government if it meets the criteria. Do a VAT to pay for it. Most people will be careful about spending until they hit a catastrophic problem. Millionaires have to pay a lot before Uncle Sam kicks a dollar in.

Make medical debt undischargeable even for illegal immigrants. Put HSAs in place that automatically deduct 5% of a paycheck until their deductible is paid in full and sitting in an interest bearing account. Need to gradually introduce this over 15 years by 1% so you don’t smack peoples with unexpected expenses.

Over time you have a system where you soft cap health expenses at 15%, which is under the 17% we spend. And for low level shit you introduce price competition.

70 JonFraz September 14, 2017 at 4:12 pm

Actually you are dead wrong. The individual market would be a disaster in everyone were thrown into it with protections similar to those in the ACA and/or group coverage. You need to dump the ideology and look at what works in the real world– group coverage (generally employment based) works far better than the individual market ever has, which is why people vastly prefer it. You absolutely must have guaranteed issue and some level of community rating other you freeze out a major fraction of the population, and you must have some form of subsidization or freeze out low income people, also a major fraction of the population. With enough people shut out of the system the health system would become unstable, and politically the pressure for a solution like single payer would be irresistible. If you want ti preserve private insurance something like the ACA is utterly necessary.

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71 Art Deco September 14, 2017 at 6:13 pm

Under the ACA, the individual market is imploding, so the ACA is not a solution.

Company workforces make satisfactory actuarial pools. Employment isn’t highly correlated with medical problems and the old and disabled are largely shunted off on the public system. The problem with company pools is that job losses and job changes cause coverage gaps and the propensity to hire is diminished by uncertainty over labor costs. Contemporary practice in insurance billing also leaves prices opaque to the customer.

The problem with systems for financing medical care is that you can have anything you want. You just cannot have everything you want. We’d be better off if the politicians and the wonks laid out the options and made explicit what you can’t have as well as what you can have. Instead, it’s striking attitudes, sloganeering, and lets-keep-the-balls-in-the-air-for-now-and-hope-it-waits-til-I’m-out-of-office-to-fail.

What I suspect would be the optimal solution would be to end first-dollar-coverage, promote transparent pricing, and treat insurance as insurance and not a conduit for pre-paid services.

72 JonFraz September 15, 2017 at 2:34 pm

I meant “WITHOUT protections”. My apologies to anyone who replied thinking I was saying the opposite of what I intended.

73 JonFraz September 15, 2017 at 2:40 pm

And the ACA’s “implosion” is vastly exaggerated– generally for ideological reasons (AKA, wish fulfillment). It does need some fixes, but outside current political realities (yes, that’s a big “outside”) there’s nothing inherently impossible about those fixes.

Re: Company workforces make satisfactory actuarial pools. Employment isn’t highly correlated with medical problems

Except that workplace policies generally include dependents as well, and there’s no assurance that am employee’s dependents may not have expensive health problems. And even many working people have conditions that may run up quite a tab. I know one gainfully person with HIV– which is very well controlled these days, but by meds that cost $$$. So no, employment does not guarantee a healthy pool. Nor does the individual market necessarily guarantee an unhealthy one. Especially since it you pair it with the Medicaid the latter (along with Medicare for the SSDI population) will absorb a large share of the most desperately ill people who are impoverished because they are unable to work.

74 Floccina September 14, 2017 at 11:39 am

Germany’s, where you can basically go to any doctor in the country whenever you need to?

That seems impossible. What if everyone want to goto the same MD?

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75 Catholic German September 14, 2017 at 2:28 pm

I dont share the positive opinion of the german health care system with prior test.
i already knew I had a torn acl… still needed to wait weeks to have an appointment with a doctor, then needed to wait months to get a scan for my knee, then needed to wait months for surgery… at the hospital you share the room with 5 other sick patients. later i only got a few physio lessons paid.
german doctors are overworked and underpaid, german nurses and pysiotherapist are not empowered/underqualified and underpaid.
germany, like most other nations, free ride on the US by paying too little for drugs – high prices is needed for r&d (i know european pharma companies exist but they make their profits not in germany).
finally, i think i paid more for my german governmental health insurance than i pay for my current private swiss one (as im healthy and young) – and the quality of health care in switzerland is way better

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76 Floccina September 14, 2017 at 12:03 pm

How is it that the rest of the world can solve the basic problem of providing good coverage to everyone at a price that is at least a third less than what America pays?

But isn’t GDP per capita about 1/3rd lower in Germany than the USA.

BTW Utah and Arizona have per capita health care spending about at the level of Canada, so the problem of high USA spending looks like a sate issue to me. State regulars have less incentive to regulate with cost in mind than is optimal and the higher the percent of Health care the Fed Gov pays for the less incentive state regulators have to shun providers and look more to lowering cost.

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77 The Cuckmeister-General September 14, 2017 at 9:19 am

Megan McArdle is the Patron Saint of Cucks.

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78 Becauseimblackyoshi September 14, 2017 at 9:50 am

Meghan Mcardle actually began here career as working for the Kochs. Please don’t trust her. She spent years trying to hide her affiliation with them. Once the video of her in a drugged haze preforming bukake at one of their parties surfaced did she have to admit the truth.

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79 josh September 14, 2017 at 10:09 am

Is it me or is “Kochold” better than cuckservative?

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80 BecauseImblackyoshi September 14, 2017 at 2:11 pm

https://shameproject.com/profile/megan-mcardle/

Everyone here should read this whenever Tyler posts Meghan’s garbage. The lack of integrity in her history must make Tyler tumescent.

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81 Anonymous September 14, 2017 at 2:25 pm

If that’s the best smear campaign they can come up with, I’m impressed. I will look more favorably on her work in the future.

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82 The Cuckmeister-General September 14, 2017 at 5:22 pm

So as per my previous comment you have decided to convert to Cuckoldry then?

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83 Li Zhi September 14, 2017 at 9:28 am

I’m definitely higher in the peanut gallery stands on this one, but I suspect that in a health care system which allows the same doctor/medical provider to charge two (or more) different prices for the EXACT same service can’t “evolve” into anything. [Defining “exact” is a bit murky, individuals are unique, so are their circumstances, establishing the correct granularity for “unit operations” is why the code books run to thousands of pages…] I like to think I’m a libertarian, but then see things like the mess our medical system is in, and I see where legislation could help. I also see that for the most part people are unwilling to make those who make unhealthy life choices pay for their choices. Just take a look at the government’s Flood Insurance program. Perhaps we need a 50 Shades of Gray approach. Require insurers to limit the number of their pools to 50, and to price them so that their profits are, per pool, equal (on a per policy basis). I think single-payer can only work when rationing is effective. I suggest a two tier system, where a floor of medical care is provided by the government as a single payer. Such care should not include: breast augmentation (even after radical mastectomy), sex transitions, liposuction, heart by-pass surgery, etc.) (That is, it should be affordable). It seems our courts (and legislators) are unable to allow for denial of care for economic reasons. This is the principle problem: the system is so distorted by legislation and judicial interpretation that we can’t get anywhere from here via “evolution”. The voter demands that every kitten be rescued from every well, damn the cost. $100,000 a month on a new cancer treatment? Sure, insurance should pay. Birth control pills? Of course, it’s a reproductive health issue! Anxiety counseling? Darn tootin’…

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84 static September 14, 2017 at 10:35 am

You are on the right track when you are noticing that providers charge non-public different prices to different consumers. Forcing them to charge the lowest price to all customers is the supposed benefit of single payer. However, you can force them to charge the same public price to all customers in order to be eligible for Medicare or Medicaid reimbursements. This is a simple, low-bureaucracy change.

High deductible plans and other cost sharing schemes like Medicare, where the consumer needs to see the price before committing to non-emergency treatment can be a forcing function on this. If we are not seeing a flourishing of low-cost care options, like CVS minute clinics, we are doing something wrong.

Single payer is a dream state of those that want to pretend that everyone should be able to get any treatment, regardless of cost; that providers will work for whatever reimbursement is on offer; and that insurance companies are the ones ripping them off, not hospitals, pharma, doctors, and nurses.

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85 Bill September 14, 2017 at 9:29 am

We are subject to the tyranny of words.

Answer the following questions:

1. Is Medicare single payor (other an part B)

2. Does a Medicaid patient get care from a Single Payor

Save you the effort: They are single payor.

The question is not Single Payor. The question is what should be single payor, and why or why not, and, if so, what rights the payor should have.

The second question is: If someone pays for or reimburses for care should they be able to negotiate the price they pay for that good or service. In your life, if you purchase or reimburse the purchase of some good or service you would want the right to negotiate the price for that good or service and be able to demand that the quality of that good or service meet an acceptable standard.

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86 static September 14, 2017 at 10:21 am

Medicare is not single payer, it is a partial payer. Medicare is a single pricer. Payments come from many supplemental insurers via Medicare Advantage. Partial payments also come from patients. What Medicare does effectively is set a reimbursement rate for procedures in localities.

Contra your negotiated price argument, what we ought to do is have all providers charge the same published price to all payers. Plans may differ in the reimbursement rate on offer. This would allow consumers to seek out the best value for non-emergency care given their expected reimbursement rate.

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87 static September 14, 2017 at 10:23 am

I should clarify here, that providers can differ between each other in how much they charge for a knee MRI, but they must charge all patients the same price for that knee MRI over the course of the year.

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88 Bill September 14, 2017 at 11:53 am

Static,

Your proposal to have providers agree to charge the same price to all payers is price fixing. This also eliminates discounting, which is an element of competition.

My guess is that you are a provider.

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89 static September 14, 2017 at 6:18 pm

It’s not price fixing. It is price fixing if hospital A and B have to charge the same price. It is not price fixing if hospital A has to charge all patients hospital A’s price and hospital B has to charge all patients hospital B’s price. Is it price fixing if you and I have to pay the same price at the grocery store? No.

I am not a provider- I am saying it is the providers ripping us off, not the insurers. People assume it is the insurers ripping us off, and thing single payer gets rid of those evil profit mongers. I am saying it doesn’t matter if it is Medicaid or a co-op or someone paying cash, they all pay the same price at your store.

With single payer, you end up in this state anyway, because the single payer means each provider only has one pricing model to match. I am saying you can have this supposed benefit of single payer, without the massive bureaucracy.

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90 Bill September 14, 2017 at 8:00 pm

Static, It is price fixing because the providers would be agreeing on terms of their competition–agreeing, in effect, not to discount. Cartels or oligopolistic coordination becomes unstable if rivals cannot see what each is doing, and if their are opportunities to cheat, or price discriminate. I realize this may seem strange, but consider the rule if it were airlines who agreed to sell only at a posted price and you will see the consequences.

91 RPLong September 14, 2017 at 9:47 am

It will be sad to see the disappointment on everyone’s faces when they realize that sitting in the waiting room of a clinic for 4-5 hours costs as much money in foregone wages as just ponying up the cash for a doctor visit.

And, as many economists have observed over the years, once doctors aren’t allowed to ration on price, they are free to ration based on any number of other considerations, such as bigotry.

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92 Becauseimblackyoshi September 14, 2017 at 9:52 am

Compare that to only having access to the ER because you can’t pay anything. Where did you go to school?

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93 Hazel Meade September 14, 2017 at 10:35 am

How many people REALLY can’t pay anything, and how many just don’t want to?
An urgent care clinic visit only costs $150 or so without insurance.

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94 book genie September 14, 2017 at 10:48 am
95 Chicken Little September 14, 2017 at 10:54 am

There are a lot of people in the underclass who can’t afford $150.

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96 Chicken Little September 14, 2017 at 11:14 am

And Becauseimblackyoshi’s point was about non-emergency care.

97 Anonymous September 14, 2017 at 1:48 pm

“Can’t afford”? I wonder if they have phones? Televisions? Cable? Cars? Eat fast food? I guess “a lot” is not necessarily a high % though.

98 becauseimblackyoshi September 14, 2017 at 8:40 pm

Do you mean “can’t afford” avos on toast?

99 JonFraz September 14, 2017 at 4:14 pm

If you mean literally 0, then most people can pay something, sure. But what they can afford is far less than what the prices are.

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100 Anonymous September 14, 2017 at 9:52 am

HMOs for the win. Efficient scheduling, and often without a doctor at all.

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101 Denis Drew September 14, 2017 at 9:51 am

No matter what new (or old) health care setup America chooses it wont stop the financialization and crapification of medicine — if we don’t build a countervailing FORCE: that means rebuilding labor union density.

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102 Robert Zonis September 14, 2017 at 9:55 am

Part of the problem is that there’s market failure/suppression of competition due to monopolistic practices/regulatory capture in places that most folks aren’t looking for it:
1) The supply of doctors and nurses, both from restricting training within the US and severely restricting immigration/licensing.
2) The supply of hospital beds/facilities due to state regulation.
3) Monopolies granted by excessive patent protection/government regulation for pharmaceuticals, including the complete ban on importation of Rx drugs from other countries.
4) Lack of fraud/excessive charge oversight in the medical supply sector.
5) Restrictions on the ability of insurance companies to pay for cross-border medical treatment.

Fix even one of these problems and costs go way down.

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103 Bill September 14, 2017 at 8:07 pm

All good points. There would still be problems but we should do all of those. See if you can get AMA to back you.

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104 William Woody September 14, 2017 at 9:58 am

The biggest problem I’ve always had with discussions about health care reform is that it treats the problem as if the health care industry was a single monolithic economic activity, rather than considering the different types of care and the different economic effects involved. And because it gets treated as a single monolithic entity, arguments tend to be shot down by pulling examples from the fringes rather than considering that different elements of health care may behave differently.

For example, a common bromide that consumer choice in health care is bad–and the example given is emergency room visits where a consumer is in a bad accident and needs aid immediately. But this sort of transaction (I’ve been hit by a car and need help now, regardless of costs) is a relatively small share of the overall health care market. Procedures and operations which can be scheduled out weeks or months–where a consumer could theoretically shop around (and do; medical tourism)–is far more common. (I remember reading that ERs represent perhaps 2% of the overall health care industry.) To then rule out consumer choice because it doesn’t work in 1/50th of the overall industry strikes me as a mistake.

Until we make a more nuanced deep dive into the health care industry as it exists now, and consider areas where free market effects could work and where they don’t, we’ll be forever subject to “reforms” that seem far more driven by special interest groups than by an intelligent debate. Meaning until we start considering the health care industry’s separate components, any argument for reform strikes me as ill-informed.

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105 Floccina September 14, 2017 at 10:40 am

I would think that AARP would kill Medicare for all if it were made in a sensible way.

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106 Bill September 14, 2017 at 11:54 am

Maybe, but if you have to buy supplemental insurance to cover co-pay, maybe not.

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107 Mitsu September 14, 2017 at 10:40 am

These are obvious arguments but the point of advocating for single payer is to move the Overton window. Over time the window can shift considerably; who would have predicted the Republican Party would end up where it is today?

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108 another reader September 14, 2017 at 10:41 am

+ Austria, Belarus, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, Moldova, the Netherlands, Norway, Portugal, Romania, Russia, Serbia, Spain, Sweden, Switzerland, Ukraine, and the United Kingdom.

– The very special, exceptional, United States of America. So special.

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109 Anonymous September 14, 2017 at 2:08 pm

Are all those places single payer? We could do single payer, it just wouldn’t save any money. We would have to increase taxes on the middle class a lot, as those countries mostly have, and we would have a lot more deadweight loss. If we’re concerned about medical care for poor people then why not just continue to expand medicaid to fill in gaps?

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110 prior_test3 September 14, 2017 at 2:31 pm

Germany is not single payer by the definition that now seems common in these American debates. It also basically covers everyone, and basically has no deductibles, but Germany does not have a government financed health care system.

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111 Bob September 14, 2017 at 10:53 am

The issue with the US system is not really who pays, but how we pay, which is a big part of why our prices are so high. If healthcare in the US could be had at Spain’s prices, we’d not even be having this discussion. Medical billing? waste. Insurance companies? Mostly waste. Hospital administration? Bloated. Doctors that can pull $200K+ while working 3 days a week in non-emergency environments? Lack of competition.

If we managed to keep cost increases at zero, it’d still take decades for our prices to resemble Europe’s. But since lowering prices really means people losing jobs, or a lot of bargaining power, we talk about who is the ultimate payer instead.

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112 Chicken Little September 14, 2017 at 11:13 am

I wouldn’t read too much into people’s satisfaction with their health insurance. If asked I’d say I’m ‘satisfied’ with my Obamacare bronze plan, but only because like 90% of people my age(28) I haven’t had to use it and so don’t have a reason to be dissatisfied. But I’ve heard horror stories about people gypped by insurance companies and I would welcome a single-payer system as a better way to control cost. Politically, I think it’s very likely to happen. The Paul Ryan/cuckservative branch of the Republican party is astonishingly incompetent politically, unable to grasp the simple notion that you can’t win elections with a platform and message targeted at wealthy people. With Democrats offering a left-wing populist alternative, they will win.

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113 Jack September 14, 2017 at 11:17 am

Interesting article. Here in NYC post Obamacare the self employed have few options, none of which are at all comparable in quality or cost to what existed pre-Obamacare. There is currently one national carrier in the market that offers an expensive HMO plan that most US educated doctors and top hospitals will not accept. That one remaining carrier, BC/BS (Anthem) has announced that it will not longer offer this plan come 2018. The US Senators, Schumer and Gillibrand who were such enthusiastic supporters of Obamacare are silent. Given Obamacare’s destruction off the private market for health insurance for the self employed here in NYC, I would imagine that single payer would be preferable to what if anything is likely to be on offer come 2018.

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114 Glenn Hefner September 14, 2017 at 11:24 am

America is only system in the world that tries to use competition/capitalism for healthcare, and so we have the highest costs in the world with arguably (and obviously) worse outcomes.
While I agree moving from the US’s inferior (and inadequate) healthcare system to a superior (but perhaps still inadequate) single payor is highly unlikely, it’s a real\shame a true failing
to the citizens because – as a system – though far from perfect, just about anyone who wants to maximize utility would be in favor of a single payor system.

So many of the GOP arguments seem to begin and stop with “companies do better than governments, therefore…” but I refuse to believe that the US gov’t and bureaucracy is
inherently worse than that of other nations. In other words, if they’ve figured it out, the the US eventually would, too.

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115 Sure September 14, 2017 at 12:53 pm

Oh please. We use a single payer system for defense, just like every other state in the world. How do those numbers work out? Well the UN pays $1332/soldier/month. Performing the same exact mission with US troops is multiplicatively more expensive. Base pay alone for an E-4 is $2,089, not including benefits and overhead cost. We can play a less precise game with main battle tanks and fighter aircraft, across the board the total monopsony enjoyed by the DOD somehow does not result in any significant price discount relative to the world in spite of their huge volumes.

Why?

Because the US has the world’s highest cost disease. The top end of the US income/wealth curves bid up prices on desireable housing, they displace the less obscenely wealthy, who bid up the middle class neighborhoods and on down the chain. This results in every plot of land costing more for use in the US than overseas. Soldiers need to afford housing, particularly when they quit or retire, so Uncle Sam has to pay them enough that they can afford housing. Similarly this bidding occurs for things like food, computers, cars, etc. Sending off a Canadian or an Israeli to go peacekeeping is cheaper because when they come home they have to pay for things at US prices.

So how does this relate to heatlhcare? Oh I dunno, maybe US doctors, nurses, MAs, CNAs, etc. might demand higher compensation because the poorest state in the US is wealthier than the majority of Western European countries? Maybe the cost of land for doctor’s offices, hospitals, and the like is more expensive. Maybe expendables, like bandages and syringes, have a substantial labor cost in their delivery and storage that jack up their effective price in the US. Maybe our legal costs are a bit higher as well. Maybe, we might even have more alternatives for people looking for jobs (you know what with US unemployment running around 5%), particularly those able to best use IT systems like many healthcare workers.

Absolutely nothing changes on any of this if we move to a single payer system.

Because we have a nice large single payer system in the US. It is called the VA. The VA had around 22 million veterans in 2013 and spent around $45 billion. That works out to around $2000/patient/year. That sounds pretty nice until you realize that the VA only handles around 1/3rd of veterans healthcare needs (vets can also use Medicare and the like). The VA has all the things we want from a single payer system – no acturial costs, large buying power (a population slightly smaller than Australia and larger than The Netherlands), strong formularies, docs who choose the place out of “fit” and “culture”, and a strong political constituency. If we magically got everyone care at the VA rate we would still be more expensive than every excepting Luxembourg and Norway.

Most labor intesive products are more expensive in the US. This will always be the case regardless of system.

Beyond that we have the question of healthcare inputs. A huge portion of the deficit in life expectancy comes from motor vehicle crashes, homocides, and opioid overdoses; these are largely emergency medicine issues and the US system is by far the best at dealing with all of these. Yet they account for the majority of life expectancy disparities because we have so many more of them due to culture, geography, and many other things outside of healthcare. Likewise, the US has some of the highest rates of obesity, smoking (particularly when calculated on pack-years), and a whole slew of other health indicators.

Any discussion of healthcare that does not look at these blindingly obvious facts is exceedingly non-serious. Swapping premiums for taxes will not magically lower prices; otherwise the VA budget would be half of what it is. Dealing with real world people and costs makes me highly doubtful that swapping to single payer will allow for significant gains in life expectancy without massive additional spending.

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116 Glenn Hefner September 14, 2017 at 4:44 pm

Um, no. Just no.
Europe spends on healthcare roughly half as a % of GDP as what America spends. With better outcomes, mind you. And with more coverage.
Yes, doctors cost more in the US, and that’s one reason why it make it very difficult to move, despite the fact that it’d be moving to something much better.

Land costs much less in the US, on average, than in Europe. And in no way is Alabama, for instance, richer that most of Europe. It just ain’t.

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117 Anonymous September 14, 2017 at 4:53 pm

“It just ain’t.”

Classic.

But actually: yes, just yes.

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118 Sure September 14, 2017 at 6:47 pm

Average household income in Alabama is $43,623. Average net household income in Sweden is $26,242. Denmark is $26,945. France is $29,759. The Netherlands is $27,759. In the UK it is $27,029. Italy is $25,004. Austria is $31,667. Belgium is $28,700. (Alabama figures taken from US census, all European numbers are taken from the OECD better life index). Even if we take a quarter off the top of Alabama’s income just to be safe for different source methodologies, that STILL makes Alabama have higher income than virtually of Europe.

Here’s a hint, Alabama has Hunstville, Europe looks slightly less poor if you use Mississippi instead. It still is the fact that if Sweden joined the US, they would be the poorest state by a lot, as would most other European countries.

This is why most things in the US – from infantry platoons to ICUs cost more. The US is just that much wealthier.

As far as measuring costs and outcomes, please stop repeating talking points. Europe fudges their expenditure figures on healthcare massively as well as their outcomes data.

The government subsidizes a much higher percentage of medical education costs and those are reported in their education budgets; here we have doctor’s take out loans and get repaid with higher remuneration which shows up in the healthcare, not education, budget. Europe pays for huge amounts of social housing for patients with pyschiatric issues this shows up in their housing budget. Here we spend the money on ER visits and in-patient commitment, that shows up in the healthcare budget. These may well be better ways to spend money, I certainly would not have minded going to med school without six-digit loans, but they are not reported in most budgets under “healthcare”. Europe, Canada, and the like spend much more money on education and “social” spending, much of this is “healthcare” in the US.

Europe aborts away problem babies (e.g. Iceland has “eradicated” Downs syndrome), has some wonky definitions what constitutes a “live birth”, and did have a massive cull in WWII skewed a lot of the health demographics because the unhealthy children did not survive the war. The US has a large percentage of the population (about 30-40%) who believe that children have a “right to life”, this means we have much higher rates of low life expectancy births. Add this to the aforementioned problems with GSWs, MVCs, and ODs and you might see a picture emerge that is a bit more complicated.

As as land costs. Sure the US has, “on average”, cheaper land. Unfortunately the vast bulk of US land is utterly unsuited to building hospitals and doctor’s offices as there is just not that much population in Alaska. The places where we build hospitals tend to be near moderate or larger population centers with good freeway access. These are more expensive than the places where they build hospitals in Europe. Of course, in most of Europe these costs are falling with the whole reduced fertility and demographic implosion with a fun shout-out to the many center city churches which are being vacated and opening up cheap spots for commericial real estate.

Oddly enough Google searching tells me that rent is 9% higher in the US than Germany, 12% higher than in Italy, and 40% higher than in France.

I’ve lived and work in medicine in both and yes, most things are just more expensive in the US – everyone bids everything higher.

Again, why is the VA so expensive? They are bigger than The Netherlands. They have single payer healthcare. Their per procedure, per patient, etc. costs are still vastly higher than The Netherlands. Why does single payer not make healthcare costs comparable for the VA and The Netherlands? I mean either something, like all the junk you are being willfully ignorant about actually has an effect, or there is some fairy dust that makes the VA massively less efficient as a single payer system.

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119 Glenn Hefner September 15, 2017 at 9:28 am

I get it. Healthcare is more expensive in the US because everything is more expensive because the US is richer. Aside from being factually incorrect (I lived in Europe and the Mideast for 16 years. Most “things” are far less expensive in the US, including cars and land and real estate, while labor costs are higher), it’s a circular argument that circles the drain.
Healthcare is more expensive here, care is very uneven, and outcomes are worse. No other country spends more on healthcare as a % of GDP than the US, even if as you claim, Europe fiddles the data, their spending doesn’t approach what the US spends. The average life expectancy in the US is lower than most developed nations, and birth mortality in the US is woeful, on par with Cuba. Our baseball is worse, too.
Yes, our doctors are clearly more expensive here, liability insurance is higher. And yes, it’s all anecdotal, but after living 16 years abroad, I will admit that American hospital are temples of modernity; likely all the machines and devices and gizmos in the US have more bells and whistles than theirs. These are costs.
Pfizer, as an example, and as an American company, will charge 2x or more for the same medicine in the US than abroad. Why? Because “competition” allows it to. A universal payor doesn’t. And then there are the knees and hips and ICDs and stents…

And I think we’re in broad agreement that a universal payor ain’t gonna happen in the US. I believe it’s a far better and a fairer system, but yes, to get there from here isn’t impossible, but it would likely only raise costs in the short term and likely without any of the commensurate outcome benefits that other countries currently enjoy. Again, in the short term, which is really what politicians, and let’s face it, most people, really care about.

120 Sure September 17, 2017 at 6:49 pm

As mentioned initially, cost disease is about labor costs; my experience living and working in Germany was that rent was higher in Germany than something comparable in the States. Thankfully I did not have to rely on my anecdotes, my housing allowance was adjusted for the very real higher rental costs after BuPers ran a huge set of numbers.

Outcomes are not worse in the US. For individuals with equivalent health status, the individual in the United States will live longer. That holds true for joint replacements, cancers, and pretty much everything else you can imagine. The problem is that before the health care system kicks in, you have worse health status. Think of it this way: in Europe you have much higher social spending. You have a lower percentage of people in relative poverty. You have fewer obese, diabetic, or smoking patients. You have more premies (thanks to lower abortion rates). You have vastly fewer MVCs and GSWs.

The best doctors in the world cannot undue the damage from 20 pack-years of smoking, they can only mitigate the damage from taking a .45 into the gut. Comparing health systems without correcting for health inputs is like comparing ladders by how high someone at the top of each can reach … except on guy is six foot tall and the other five foot. If the six foot tall guy can only reach six inches higher when both are on top of the ladders, his is not the taller ladder.

As far as spending, well that is extremely hard to say how much you should really count. Taking housing. One of the absolute worst predictors of health outcomes is being homeless. Europe spends a much higher percentage of GDP on social housing. How much of that buys them better health? Hard to answer, but data here shows that not being homeless dwarfs things like hospital infection control. We spend billions on infection control, and maybe we should stop doing some of that in favor of making housing available for the homeless. Nonetheless either way, money is being expended in a manner that improves health. Europe does a lot of this and it substantially changes the figures.

Infant mortality is a terrible statistic in the Western World. What is the single most cost effective way to reduce infant mortality? Abortion. If, as happens in Iceland, chromosomally abnormal fetuses are aborted you buy a lot of infant mortality reduction. If, as happens in the US, parents bring to term children with zero chance of surviving out of infancy, you gain a lot of infant mortality. Less obviously, but more importantly, who has children drastically changes infant mortality. Smokers, drug users, and unpartnered mothers are all vastly more likely to have child die in infancy; more women having children in the US are smokers, drug users, or unpartnered. Again you are comparing fundementally different populations and these inter-population differences dwarf the impact of healthcare.

As far as cheaper drugs, sure monopsony is great at lower prices. Unfortunately that means there is less incentive to invest in new drugs. When patients come into my ER I want there to be plenty of options – I have saved patients lives with drugs that did not exist 10 years ago. I am willing to pay for that. And that is my problem with socialized medicine in general – the cheapest way to keep down costs is to ensure that patients do not survive, or better, are never born.

It is assinine in the extreme to judge health care systems without looking at population differences. Weighting it by cost and taking no account of things unseen is terrible.

Because the other dirty secret – Europeans, Canadians, etc. lived longer than Americans before they socialized medicine too. And they lived longer by about the same percentage as today. One of these days I hope to have a good faith and intellectually honest conversation about single payer, sadly this conversation will, again, not be such an effort.

121 Anonymous September 14, 2017 at 2:14 pm

The U.S. government already spends more as a % of GDP on healthcare than European countries do. A claim that we could cover EVERYONE in the U.S. while REDUCING government spending is beyond absurd.

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122 Glenn Hefner September 14, 2017 at 11:31 am

And of course in the US, the vested interests are powerful…
The idea of competition in healthcare is truly laughable. Those that argue in favor of it just don’t see reality and/or are willfully blind, as Tyler seems to be on many subjects.

But as America ages and as the aged become infirm, and as the inform need care, this issue will only become more dire.

Perhaps the only solution would be to have our military be comprised solely of the elderly and the sick, starting with the relatives of the GOP and the GOP.
Then we’ll see how war-mongering they are.

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123 Viking September 14, 2017 at 11:43 am

Actually, I have previously proposed we would have been better off sending middle aged women than young guys with potential to Iraq and Afghanistan. They could nag the jihadis to death. So it seems you are onto something.

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124 Anonymous September 14, 2017 at 2:17 pm

No explanation of why it is “laughable”? No explanation of why competition “doesn’t work” for lasik and cosmetic surgery where competition is actually allowed?

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125 Glenn Hefner September 14, 2017 at 4:48 pm

Yes, have a real emergency and then ask what the bills will be – they won’t know – and then go across town to find a cheaper price.
Wait for a month to see a specialist, they propose tests perhaps a treatment plan, find out their bills. Then no, you go, make an appointment
to see another specialist to await their diagnosis and treatment plan…

No, I’m sure you’re right. Just like lasik, an entirely elective procedure done by a doc on every block and marketed on billboards and bus stops.

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126 Anonymous September 14, 2017 at 4:55 pm

Yes that was my point. Emergency care is a vanishingly small part of the medical market. Regulate it, whatever, doesn’t matter. For the rest, put a doc on every block and market it on billboards and bus shops- why not? Aesthetics trump human lives?

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127 Glenn Hefner September 15, 2017 at 9:41 am

It has nothing to do with aesthetics…obtuse comment…its has everything to do with the fact that healthcare is exploratory, large costs can be incurred even before finding out what the diagnosis is and before the treatment plan. And than that’s costly.
Lasik is lasik is lasik. Breast reductions, nose jobs, your comparisons, are all pretty routine and standardized procedures – and electives – where the doctor can advertize services, and prices, and the consumer knows well in advance what the costs will be,
which allows them to shop.
Do you really expect the same for exploratory surgery? For tests and lab work to determine why the patient feels unwell? For, perhaps, cancer treatment? And the list goes on.

I think a lot of consumers do wish all healthcare procedures were like tooth-fillings and extractions, but wishing doesn’t make it true. And arguing that it is/should be/will be with more competition (“a doc on every block”) doesn’t even approach reality.

And so we perhaps should all start with a question: which healthcare system is the ideal, which is best? What would an ideal look like and how do we get closest to that? While likely come up short and many have gaping flaws, to me it’s far easiest to argue that
the US healthcare system is the furthest from the ideal of every developed nation. There likely isn’t a worse one.

128 Sure September 14, 2017 at 6:58 pm

When my ER wait times get too long we get a call from the CFO. Because we advertise them on billboards with large, real time values, about how good my ER is. Why on earth would my hospital spend *millions* on advertising ER wait times if everyone just goes to the nearest ER? Why would our advertising be clustered in high income neighborhoods further away from us than in those nearby?

Because ER wait times, like ER price are things that influence the reputation of the hospital. If people wait or get gouged in my ER during their emergency, they are not going to be happy with the hospital. When it comes time to make a decision about something pricey, like say a hysterectomy, they are not coming back if we gouged them or made them wait. My entire department’s performance works as advertising for the OR and inpatient floors.

So no, we cannot just gouge on price and have nobody care. Hospital admins routinely set all manner of goals for ER precisely because patients have the worst time with being billed too much 60 days after they “almost died”. Nobody pays for healthcare in the moment and you burn massive reputation if you charge triple the next hospital over. That will come out of your bottom line when predictable health issues – like pregnancy, cancer treatment, or basically anything not emergent – means patients do not like your hospital.

Unless of course you are the only game in town, then you can rake in monopoly prices. It is a good thing that we have not had major legislation that encourages hospital consolidation and literally pays large hospitals more than independent practices and outlaws physician owned hospitals … oh wait, nevermind.

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129 Floccina September 14, 2017 at 11:41 am

I like may plan cheap and with good incentives but covers the poor:

http://un-thought.blogspot.com/2009/09/healthcare-compromise.html

The state would provide insurance to all Americans but the annual deductible would be equal to the family’s trailing year adjusted income minus the poverty line income (say $25,000 for a family of 4) + $300. So a family of 4 with a trailing year adjusted income of $30,000 would have a deductible of $5,300. A family of 4 with a trailing year adjusted income of $80,000 would have a deductible of $55,300. Middle class and rich people could fill the gap with private supplemental insurance but this should be full taxed. This would encourage the middle class and rich, who are generally capable people, to demand prices from medical providers and might force down costs. They could opt to pay for most health-care out of pocket while the poor often less capable would be protected.
It is not a perfect plan but it might help. Some deregulation of health-care would also help the poor gain access. The gauntlet that Doctors have to run these days to get to practice seems like an anachronism in today’s world. Let smart people get to practice medicine after on the job training. Let the medical businesses decide who is qualified to practice medicine. 12 years of training to tell if my child has an ear infection is overkill and reduces access to health-care for the poor.
Another benefit of my plan is that it would encourage capable Americans (the rich and middle class) to be a counter weight politically against the providers

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130 Jay September 14, 2017 at 11:47 am

America already spends more on socialized medicine per capita than most of its peers. What good is forcing the rest of us on socialized medicine? And can we at least call the pro-socialized medicine contingent what they are, the anti-choice crowd.

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131 joe September 14, 2017 at 11:56 am

Single-payer just needs a catchy slogan, say: “HMOs and the DMV: Together at Last!”

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132 HL September 14, 2017 at 12:10 pm

Once we get healthcare costs down to the costs of other countries per capita, what are we going to do with that $1.5 trillion a year saved? What about the people on the receiving end of that $1.5 trillion?

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133 dearieme September 14, 2017 at 12:47 pm

‘For some of the arguments here, I am indebted to earlier work by Megan McArdle.’ How very annoying. That superfluous comma, I mean. I do that too. Is there a cure?

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134 dearieme September 14, 2017 at 12:50 pm

Golly, here’s another one. ‘The notion of a universal cure-all is a myth, whether it comes to improving your health or improving America’s health-care system.’ Is it an epidemic?

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135 dearieme September 14, 2017 at 12:53 pm

Mind you, the sentence is arsy-versy anyway. It should read ‘Whether it comes to improving your health, or improving America’s health-care system, the notion of a universal cure-all is a myth.’

That way the piece ends with a bang on ‘myth’ rather than dribbling away with ‘America’s health-care system’. Still, I applaud the hyphen in ‘cure-all’.

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136 dearieme September 14, 2017 at 12:55 pm

Even better: that way the piece ends with the bang of ‘myth’ rather than the whimper of ‘America’s health-care system’.

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137 rayward September 14, 2017 at 12:54 pm

Healthy people have the irrational belief they will always be healthy. That’s why single payer in competition with private insurance won’t work: healthy people would opt for private insurance and unhealthy people would opt for the government plan. This can be seen today with Medicare Advantage plans, which are managed care plans, meaning they sometimes deny coverage. Healthy seniors are drawn to Advantage plans because they offer services not offered by traditional Medicare (routine eye care, dental care, etc.). Unhealthy seniors are drawn to traditional Medicare because Medicare is less likely to deny coverage. Medicare Advantage plans exploit the consequences of the overlap of private insurance and public insurance. The same would occur with a single payer plan that competes with private insurance.

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138 static September 14, 2017 at 6:19 pm

If there is private insurance and government insurance how is that single payer?

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139 dsgnt_plyr September 14, 2017 at 2:13 pm

the per-capita cost of the veteran’s health administration is $7222.22 ($65b/9m), versus ~$10k ($3.2t/325m) for overall healthcare spending. so we have a single-payer system in america that’s about 28% cheaper.

so why don’t we offer a payment to the medical profession to adopt the vha’s rules*? total non-federal hospital expenses are $851,514,523,144 (http://www.aha.org/research/rc/stat-studies/fast-facts.shtml), and total medicaid/medicare spending is $1.2t. with cost reductions via adopting vha rules we’d drop hospital spending to about $615b.

so why don’t we just offer hospitals $800b to eliminate fees? we could then cut taxes by $400b. hospitals make more money**, patients have an option if they’re broke, and the government spends less on healthcare. who loses**?

*the vha has an 8 tier patient priority system we could use to manage the waitlists/death panels.

**most recent data i found showed $64.4b in hospital profits. $800b-$615b = $185b http://www.beckershospitalreview.com/finance/12-statistics-on-hospital-profit-and-revenue-in-2012.html

***ok, drug manufacturers lose because the vha system results in a 50% discount.

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140 dsgnt_plyr September 14, 2017 at 2:17 pm

i should have written: **most recent data i found showed $64.4b in hospital profits. so hospitals would profit $800b-$615b = $185b with my plan if the cost savings match the vha.

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141 Anonymous September 14, 2017 at 2:20 pm

I think most people would be pretty upset to find themselves having to get medical care through the VA

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142 dsgnt_plyr September 14, 2017 at 2:53 pm
143 Anonymous September 14, 2017 at 4:57 pm

Maybe we should allow people to “opt-in” to VA then?

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144 Sure September 14, 2017 at 11:06 pm

You might want to be a little less bold with this example:

“Veterans who are enrolled in the VHA system receive most of their health care outside that system—typically about 70 percent, according to information provided by VHA. As a result, VHA’s average cost per enrollee understates the full annual cost of a veteran’s health care. Moreover, about half of veterans enrolled in VHA are also enrolled in Medicare or Medicaid, and many others have a private insurance plan, further complicating comparisons with average costs per enrollee in those programs and plans.”

The number I see around is that the average VA enrollee has only about 36% of his healthcare provided by the VA. Certainly when I look at the actual costs for procedures I do not see big differences. And I do this routinely for patients before I refer them to either their insurance (e.g. the hospital they are sitting in, or somewhere else private that is in-network for their Medicare) or to their VHA hospital (well to be honest I have someone else call and talk price and figure out what the patient would pay and then go talk to the family about transport options).

The literature I have seen is a complete mess, because the VA health population and spend is simply different from a lot of American healthcare. However, let’s hold on for a moment. We have a large functioning single payer system enrolling more people than most countries. Why is it, at best a 33% cost reduction? If it is all about the payer setup, why then is the system not hitting down around the per capita cost of Australia or New Zeeland?

And all of this ignores the VAs extremely well known rationing of care by distance. I have had far too many patients who cannot use the VA because the logistics of driving 40 miles for daily treatment are not worth the difference to avoid using Medicare.

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145 Floccina September 14, 2017 at 2:17 pm

One thing not said yet: We already have universal health-care and much of it socialized, a person without health insurance who gets an expensive condition will most like be on Medicaid for the rest of his life.

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146 dsgnt_plyr September 14, 2017 at 2:19 pm

correct. america’s universal system wasn’t intentionally created that way so it’s sloppy, and doesn’t look universal. the real problem is cost.

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147 Anonymous September 14, 2017 at 2:21 pm

Is this true?

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148 Ricardo September 15, 2017 at 2:14 am

You and all of your dependents have to live in poverty (or near-poverty, for those states participating in Medicaid expansion) before qualifying for Medicaid. Medicare is available for people who successfully apply for disability but there is typically a waiting period of two years from the time your disability claim is approved.

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149 Evans_KY September 14, 2017 at 8:31 pm

An opening salvo. I am glad to see the Democrats dream big again. Half-hearted measures don’t inspire the electorate. Collective bargaining is needed to pressure dominant forces within the healthcare industry to disclose prices and lower costs. A public option with tiered coverage and copays based on income is a start.

With respect to the Kaiser Foundation survey, I call bullsh**. Very few people I know are happy with insurance that requires high deductibles, surprises them with unforeseen medical bills, and tangles them in an administrative hell.

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150 Judah Benjamin Hur September 15, 2017 at 4:18 am

The most practical way to move towards a single-payer system is to gradually reduce the age of Medicare eligibility. Democrats should immediately propose reducing the age of eligibility to 60.

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151 Glenn Hefner September 15, 2017 at 9:46 am

Start with the question: what does the “perfect” healthcare system look like? Then, what is ideal? Then, what is feasible and closest to ideal?

Then, look at all the developed countries, and the US is the furthest from the ideal. The furthest. Sure, an opinion. But based on the facts (costs/outcomes, as a couple metrics)
the US has the worst healthcare system of all developed countries.
The irony is, if you can afford it, the absolute best healthcare can be found in the US.

But there isn’t another developed or developing country that looks at US healthcare and says, “Oooo! I want that!”

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152 Anonymous September 15, 2017 at 9:57 am

My natural philosophical tendency is to agree on this, but I’ve recently been trying to focus on a more nuanced question: What portion of Health Care is a public good?

I don’t like the concept of a public option as compared to private options for many of the reasons mentioned, but, I think there is a useful question in debating what a baseline public option is. Perhaps this idea is simply pushing the medicare dynamic across the market where there is a core/base plan and then individuals can buy up with advantage or supplement, etc.

For instance, we could argue that the public costs are related to preventative care and catastrophic coverage, but would not entail a huge chunk of what most policies entail today. For the sake of this discussion, say that option covers approximately 30% of what the average plan today covers. The majority of companies and individuals with means would decide to buy up additional private insurance, but individuals would have more security during trying times and not have to navigate the confusion of COBRA and the individual markets with little option. It’s sad to say that not everyone can receive the same kind of cutting edge treatment if diagnosed with a disease like cancer, but at some point we have to recognize the idea of no free lunch.

Where I always hit a wall in this logic is how to define what the minimum viable coverage is, and how to protect that through time against ‘slippage’. This may be the reason why it would never work out in reality, but I still think it is worthwhile to think of the dynamic as a small base publicly provided with a private market covering the majority/rest.

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153 Boonton September 16, 2017 at 8:38 am

What I think is missing here is the fact that you could have public insurance and still achieve any level you want with private insurance combined. Say tomorrow Medicare was extended to everyone. Instead of spending about $6500 a year to cover their workers, private companies could probably just spend $2500 a year to cover all the stuff medicare doesn’t cover (and there’s a lot it doesn’t, 20% of doctors, drugs, dental, eye, etc.).

Erza Klein’s podcast had, I think, a more interesting question. Single payer doesn’t magically create more doctors. If you have Medicare for all, will you get an upsurge in doctor demand leading to shortages? Possibly if you follow Sanders’ vision of no copays/deductibles/co-insurance.

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