The health care public option in Washington state

This excellent Sarah Kliff NYT article is from a few weeks ago, but I missed it the first time around.  Here is the clincher:

“The whole debate was about the rate mechanism,” said Mr. Frockt, the state senator. “With the original bill, with Medicare rates [for the state’s public option], there was strong opposition from all quarters. The insurers, the hospitals, the doctors, everybody.”

Mr. Frockt and his colleagues ultimately raised the fees for the public option up to 160 percent of Medicare rates.

“I don’t think the bill would have passed at Medicare rates,” Mr. Frockt said. “I think having the Medicare-plus rates was crucial to getting the final few votes.”

Nonetheless the piece is interesting throughout, and illustrates some basic dilemmas with health care reform and public options in particular, especially when a sector is controlled by powerful lobbies.


Healthcare is easily the number one failure of this administration thus far. It is a tax on every working person that requires no government to levy and the premiums go up annually. Every modern, industrialized country has working solution to this, except the USA.

Yep, letting people die is always cheaper.

I keep asking, so maybe you will be the one, but please tell of a single disease where matched controls (e.g. ethnic Japanese in the US vs ethnic Japanese in Japan, matched for BMI and other comorbidities) show a survival benefit for the healthcare system that is not the US.

The US has expensive healthcare because we have an unhealthy population we refuse to let die to save money as frequently as the rest of the world does this.

As far as costs going up every year, that would be called everywhere for all time for healthcare. The NHS, perpetually, requires larger budgets both grossly and as a percentage of British GDP. The same is true in Japan and Singapore. We do more in healthcare every year and that is expensive. You want coronary artery bypass grafting to survive a left main MI? That will be a very expensive operation. If we let you die, well that's cheap. You want to be cured of hepatitis C and live, on average, a decade longer in better health, well the pills that do that cost over a billion dollars to develop. You have intractable asthma, well we can either let you suffer and die, or we can use monoclonal antibodies (which are expensive even with free IP) and potentially cure you (until you develop an immunogenic response).

"Yep, letting people die is always cheaper."

Letting poor people die or saddling them with unpayable medical bills seem like a winning proposition business-wise.

Doesn't happen.

EMTALA requires that we treat everyone for life threatening conditions regardless of ability to pay.

Poor people, by definition, qualify for Medicaid that pays the bills. If they do not qualify for Medicaid it is because they are too wealthy to be poor (barring some idiosyncratic regulatory issues).

"Unpayable" medical bills can be discharged in bankruptcy and even then the median bill filed in bankruptcy court is something like $1200.

So nope, try again. This time with something better than a poorly researched talking point.

More Fake News. Medicaid does not cover everyone, even all poor people. Asylum seekers and migrants, one of our most vulnerable populations, are not covered via Medicaid. That’s why it’s taken center stage in the Democratic Party debates.

No, those are covered by either ICE or the penal system. Given their demographics (e.g. able to migrate) they actually are far from our most vulnerable populations. I have billed the government for many services for asylum seekers, we actually do pay for their healthcare.

Migrants are specifically not covered in Beaveridge systems either. If you have a green card then you may either return home for medical care or you may apply for coverage here. Again I have treated patients for both.

The "letting poor people die" thing is something you really only see in Europe where they routinely decide that poor, old people are not worth treating.

I think it is clear the situation has become desperate.

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I love your comments, even when I don't agree with you. And you clearly have a set of experiences that few others have. But please stop trying to sound like the burning bush.

I also have a long history of caring for poor populations on an urgent/emergent basis. I remember a bunch of similar conversations, but one in particular: a 35 year-old immigrant (illegal, for sure) with autoimmune hepatitis and end-stage liver disease. I remember having to make it painfully clear that the reason he wasn't eligible for transplant - and thus was going to die in short order - was because he wasn't eligible for one by virtue of his immigration status. Pretty searing moment. His wife was truly inconsolable, and it's about as ugly a feeling as I'd ever had being the messenger of death and heartbreak. This is only one story, it wasn't unique or limited to illegal aliens.

I've had a number of conversations with older patients or their families in which we - meaning the collective medical system - was refusing to deploy some intervention that would theoretically be life-prolonging. Transplant, dialysis, some reasonably major surgery. Sure, as you and I both know, you can frame it terms of risks and expectancies. But to be intellectually honest, I'd have to say that it was a judgment being made based on age, and not just functional status. And I've seen those decisions go a different direction based not just on philosophy, but also based on payer status, immigration status, and other factors that could easily be surrogates for provider bias.

Now to be honest myself, I more or less agree with you. A big reason why the American eldercare system costs so much is our unwillingness to draw concrete lines and say "no." At least compared to other countries and philosophies. I have mixed feelings about this, as I imagine all of us do. I felt pretty conflicted about that individual immigrant with liver failure. Here was a super unfortunate and hard-working guy who was going to die of a random disease, in very stark contrast to the other hospitalized people awaiting transplant - all of whom were American citizens, but virtually all of whom were suffering from liver failure due to alcohol or drug use. And yet anyone who thinks we should transplant every unfortunate soul, independent of immigration status... yikes, that's cripplingly expensive. And we could perhaps go back and forth on care for a chronically, critically ill elder, and where (if?) to draw the line.

For what it's worth, I happen to know a number of European professionals who deal with similar dilemmas. And while broadly speaking, the culture in all respects mitigates some of the extremes of the American system (clearly at the risk of crossing lines in the other direction) it isn't as though they don't deal with the same challenges we do. It's just highlighted by what I consider American exceptionalism - the idea that we should get everything we want, and that someone else should pay for it. (Or at least pay more into the system than the recipient did.)

Anyway, I really enjoy your comments. As a fellow physician, it's nice to see your perspective here as someone actually doing the hard work for individual patients, yet seeing the larger perspective. Agree or disagree, you are usually thought-provoking. Thanks for that.

I don't disagree, at times we let people die. We just do so at different rates and times than Europe. I argue that we do so less often and in less deleterious ways. This, more than our org chart, is the primary malleable factor increasing healthcare prices.

For instance, chickenpox had a death rate of around 100 American kids per year. It costs a sizeable fraction of a billion bucks to vaccinate all the kids against it annually. It has been part of the WHO's "essential medicines for children" for two decades. Yet the NHS refuses to provide it for all but the sickest children in Britain. I haven't tracked down the numbers but, last I checked they were choosing to let a few dozen kids die rather than pay to prevent illness.

Maybe it isn't cost effective. Maybe they have better things to spend their money on, but they make a very cold and calculated choice to save money by letting children die. Let's not pretend that we can have their cost savings without adopting the death tradeoffs.

Now I get, having worked with MSF, that everybody deals with these trade offs. I have been in many triage situations and nobody makes unthinking decisions about handing out black tags.

But the truth is that American medicine denies people useful care far less often than the rest of the world. Worse, the rest of the developed world would rather spend more money on alcoholic beverages than on medical R&D; the largest beneficiaries of which would not be the developed world (where R&D saves millions of QALYs) but the developed world as intellectual property leaks out (either through humanitarian, black market, or off-patent channels). We are not just talking about things in truly limited supply that require massive commitments to increase (like organs or OR time with highly trained subspecialist surgeons). We are talking about simple things like paying non-marginal rates for new medicines. We are talking about creating large scale markets for equipment where economies of scale can let developing countries into the game, at all. Europe has made the decision that they will keep down healthcare costs, even though their stinginess pretty credibly contributes directing to death tolls near those of wars.

Healthcare in the US is not expensive because it is organized privately. After all Tri-Care, up until recently, was a full Beaveridge model with around 9 million beneficiaries. This would place Tri-Care somewhere between Sweden and Austria for people covered. Yet Tri-Care's costs are vastly closer to the US baseline than to Sweden or Austria. We have "medicare for all" for a number of Americans (who are disproportionately young and healthy); it is not vastly cheaper.

If you want to make American healthcare cheaper that will mean firing lots of people and it will mean that more people will die. And it won't be the guy in the ICU riding the vent, it will be the senior citizen who was a bit too old when they needed a hip replaced and then developed a fracture. It will be the unfortunate child who gets a commonly harmless bug but is unlucky enough to develop severe complications. Like I say, if you want "Medicare for all" it will be expensive and it will not achieve any significant price reductions. If there were a way to deliver care more cheaply that Americans were willing to tolerate then somebody (Vermont, Kaiser, Medi-Share, Mayo) would do it and either reap a fortune or dominate the political question. the fact that nobody has ever made this stuff remotely cheaper or better suggests that it cannot be done.

Yeah, I could cut down my bills easily. If all the drug addicts were offered three strikes and then let die, I could easily bring down my costs dramatically. But that is not what America wants so it is not what we will pay for.

'We just do so at different rates and times than Europe.'

Yes, but really, American maternity statistics are so easily ignored, aren't they? Or explained away, as the case may be.

'Yet the NHS refuses to provide it for all but the sickest children in Britain.'

Why not let people read for themselves what the NHS offers? - Especially since the vaccine is not offered to the 'sickest children' at all, as you can read here - 'It is currently only offered on the NHS to people who are in close contact with someone who is particularly vulnerable to chickenpox or its complications.' Instead, the NHS considers chickenpox vaccine only relevant for children in the following basic situation - 'For example, if you're having chemotherapy treatment, it's advisable that non-immune children close to you are given the chickenpox vaccine.'

'but they make a very cold and calculated choice to save money by letting children die'

As does America, by not requiring effective measures along the lines of such countries as Germany or Australia to prevent accidental gun shot deaths involving children. A problem that the UK does not apparently have at all. Every country has different priorities, as noted by slash1001.

Show me co-morbidity controlled data on maternal mortality.

How patients receiving chemotherapy are not considered the "sickest children" I will never know. Truth is, the UK opts to not vaccinate. That kills kids. Not a large number, but they don't think it worth it to spend the money than places like Japan do to save childrens' lives.

So you chose the path of explaining away, as I mentioned above. The maternal mortality statistics are there for anyone to see. The US is higher by orders of magnitude, and the predictor is income.

Americans meanwhile, also refuse to provide free vaccinations or cancer treatment, something that happens neither in Germany nor the UK. Not to mention firearm deaths in excess of 40,000 a year, something that also does not occur in Germany nor the UK.

You may be a physician (Arzt in German, such as Arzt Mengle or Arzt Asperger) but I worked in public affairs at GMU prior to being fired, grew up in Virginia and now work in public affairs at a small machining company.

So I think I know what I’m talking about, Herr Doctor.

"orders of magnitude" ehh? That's a strong claim. Exactly when did they US maternal mortality rate get 10,000% worse than Europe's?

Last I checked the UK was at 9/100,000 while the US was at 14/100,000. Shockingly the same order of magnitude. Shockingly in line with things like the higher predisposition of American mothers to use drugs (particularly IV) and to have pre-eclampsia.

Again, as always, I have my open challenge - show me a disease where co-morbidity matched patients have better Kaplan-Meier curves in Europe than the US. If the American healthcare system is so bad, this should be trivial to do.

Clockwork_prior loves to tell Experts in a field how he knows far more about the subject than they do.

'Clockwork_prior loves to tell Experts'

One could almost imagine, with that simple, not really typical mistake, that someone is desperate for whatever sort of attention it is they seem to be unable to keep from trying to create.

'How patients receiving chemotherapy are not considered the "sickest children" I will never know.'

If you actually read the guidelines, they are generally talking about adults receiving chemotherapy, people with AIDS/HIV, etc. Of course a few children would be covered, but they are mainly referring to adults. More details here -

Again, you seem to think running off a list of the sickest people and somehow disproving the point. With every exception the NICE made included, we are still talking about prophylaxis for <2% of the population. That choice will result in few dozen dead children compared to getting herd immunity.

And for those without working immune systems, it is vastly better if society has herd immunity. The NICE acknowledges that all of the patient populations you just listed are not safe from varicella; they just refuse to do the number one recommendation of the WHO to protect them (i.e. herd immunity) and instead opt to let some number of them die to save costs.

'So you chose the path of explaining away, as I mentioned above.'

Actually, you did not mention it, but full credit for a fake response that managed to be almost pitch perfect, at least for the first sentence or two. Well, until this especially clumsy passage - '(Arzt in German, such as Arzt Mengle or Arzt Asperger)', because of course Doktor/Dr is the title used by German doctors. You almost even got it right at the end, though it is written Herr Doktor (yes, that obscure switching c for k is really too subtle for most people to pick up on).

And this is the standard deluded fantasy which a few commenters love to indulge in - 'but I worked in public affairs at GMU prior to being fired.'

Gratulationen - fantastisch, aber keine Zugabe, bitte. Oder doch.

They’re not covered by ICE if they’re not in custody. That’s 13 million Americans without papers and without critical medical coverage or access to life saving treatment. They need insulin, dialysis, reproductive care to include abortion care, chemo, antibiotics, hormones, maybe MtF sexual reassignment surgery. They’re in urgent need.

To the commenter below, of course they are ours. They’re migrants to America.

Well played anonymous. Bravo!! Now that is commitment to the bit!! Absolute perfection.

"MtF sexual reassignment surgery" I can't tell if trolling now. At least more than normal.

"Every modern, industrialized country has working solution to this, except the USA."

And yet if you need health care in one of these foreign countries who ration health care where do they for it? The U.S.
I think everyone who wants a "socialized" form of health care should be allowed to join a group of like minded people and they should pay for it themselves. Don't include me in your stupid suicide pact!!!

Genuinely curious, do European countries give free sexual affirmation surgeries to illegal immigrants? I would guess no

Which of these is covered for migrants without papers in Beaveridge model countries?

Only in the epitome of Late State Capitalism, the US, are migrant undocumented citizens not covered via a universal and equitable health care system.

Migrants in Denmark, France, Sweden, Germany, etc are all covered. Health care is a human right.

Uhh, no.

Sweden only provides "“care that cannot wait” and some forms of acute care. Germany only provides healthcare if they can pay (same as the US in the main, but a bit more stingy). Denmark likewise requires payment. France, yes actually covers such things directly. They however are in the minority and even they do not cover all the services you listed.

'Germany only provides healthcare if they can pay (same as the US in the main, but a bit more stingy).'

This is wrong, though it would also hinge on the original point of 'without papers.' Someone who comes to Germany without papers and claims asylum would be provided necessary health care, for example, since after applying for asylum, they would not be 'without papers.' Of course, a French resident without papers, one who is not covered by the French system, involved in a car accident will definitely receive a bill.

You are clearly wrong in the broad sense about Germany, which actually prides itself on ensuring health care for anyone needing it (obviously the health care system is for profit, just not for profit über alles), though the point is dependent on what is meant by 'without papers.'

You are welcome to read more - 'The law restricts health care for asylum seekers to instances “of acute diseases or pain”, in which “necessary medical or dental treatment has to be provided including medication, bandages and other benefits necessary for convalescence, recovery, or alleviation of disease or necessary services addressing consequences of illnesses.” The law further contains a special provision for pregnant women and for women who have recently given birth. They are entitled to “medical and nursing help and support”, including midwife assistance. Furthermore, vaccination and “necessary preventive medical check-ups” shall be provided.'

It is a broad subject, with different levels of complexity, of course. But essentially, any migrant (several million Syrians being a prime example) able to claim asylum is treated as follows - 'However, the wording of the law suggests that health care for asylum seekers must not be limited to “emergency care” since the law refers to acute diseases or pain as grounds for necessary treatment. Accordingly, it has been argued that a limitation of treatment to acute diseases is not in accordance with the law, since chronic diseases are equally likely to cause pain. This latter opinion has been upheld by courts in several cases. Nevertheless, it has been reported that necessary but expensive diagnostic measures or therapies are not always granted by local authorities, which argue that only “elementary” or “vital” medical care would be covered by the law.'

Oh "necessary care", EMTALA, as previously mentioned already covers this.

Sorry, I am having trouble with your constant shifting goalposts. The long and the short of it is that in the states illegal immigrants and asylum seekers get all necessary care immediately on presenting themselves to proper authorities. As with Germany, they are not prevented from signing up for healthcare. As with Germany, if they cannot pay there are options for them (e.g. surrender themselves to ICE).

But at the end of the day, I am going to trust Medecines du Monde absent a really good reason to think that they are in error.

Asylum seekers and migrants, one of our most vulnerable populations


Isn’t that part of the discussion?

Medicaid and Chip cover more than 20% of the population.

Poor people only qualify for Medicaid in states that expanded Medicaid under the ACA and which have not implemented work rules. On other states poverty alone dies not qualify a non ekderly ast fir Medicaid.

Uh, no.

Medicaid expansion was, literally, covering people up to 133% of the poverty level. If you are at the poverty level you were already covered.

Work requirements are bit dicier, but again you can either work or be deemed unable to work (and hence get SSDI).

Do you even bother to read about these topics?

More than you bothered to read my post.

No, I answered exactly what you wrote, "Poor people only qualify for Medicaid in states that expanded Medicaid under the ACA and which have not implemented work rules."

From personal experience this is false. Many such people are covered. The fact that you incoherently tried to soften your overreach in the next sentence is not particularly enlightening. I don't really feel like going all the way into the weeds, but there are vast bureaucracies out there to ensure that people get coverage. Be it via MAGI or SSI; the poor end up covered if they do the paperwork and actually have health issues.

As somebody who actually, you know, treats the poor on a regular basis, I can easily affirm that the vast majority without coverage happen because of either a criminal act (which would be rectified by incarceration for said criminal act) or by an inability to even apply.

I have had precisely zero patients who made a good faith effort who were unable to get healthcare. And I work with the sickest, and often poorest, people coming into the hospital.

Your reading comprehension is lacking as you did not in any way refute the fact that many non-ACA Medicaid states have additional criteria of eligibility for Medicaid beyond just income, with the result not all (sometimes a great many) poor people cannot qualify for Medicaid no matter how low their income.

Please cite one remotely advanced nation which as a matter of policy (not medical mishap) lets people die who have treatable conditions and outside disaster triage situations

Britain. The WHO declared the varicella vaccine essential childhood medicine in 95 or 96. Britain still refuses to offer it to all comers. We can know with statistical certainty that this kills small children. They also approved a 10,000 patient run set for Hep C (with a >90% cure rate) for Solvadi. in 2016 (two years after proven effective in the US). Per the NICE's own numbers that killed a few hundred patients (by negotiating through 2015 rather than paying) and more as the UK had more than 10,000 cases with significant mortality risk in 2016. Or I could go to the scandal where the NHS refused their own experts updates to hypercholesterolemia due to budget concerns. I mean what's a few hundred MIs between taxpayers.

Nor is this just the UK. HPV vaccination was approved in Europe in 2007. Multiple countries elected to haggle on prices rather than cover the medication in 2007 or 2008. In spite of literally thousands of women "catching cancer" every year they waited, most of Europe decided to hold out for a better deal on a groundbreaking vaccine until 2009. Sweden, Finland, and Iceland opted to hold out longer still. These financial decisions, directly resulted in witholding life saving care. In France, in 2003, the government did not have enough physicians to cover the heat wave and was unable to pay or force them to work in sufficient numbers during the heatwave. Per the French government this resulted in more deaths. Nor is this uncommon. Canada has stated in the past that they had insufficient MRIs for brain cancer screening (and even had some nice QALY estimates).

All of these are matters of policy where medical ethics dictates you are letting people die. We do it all the time; we have to. We just do it less often in the US because we burn large bails of cash on medical care.

We diagnose virtually all cancers earlier, in spit of having a population less likely to come to regular screenings, because we have the technology to scan in a timely fashion. We treat it better because we use a more survival optimized chemo regimen rather than a more cost optimized one.

There will always be tradeoffs, but socialized medicine has historically opted to let more people die of preventable disease than the American system.

Please cite one law or public act that explicitly designates anyone as "should be left to die" without care in any and every situation. I am not interested in hearing about medical or bureaucratic blunders (those happen everywhere), about triage in emergency situations or about living wills, DNRs and the like.

'we refuse to let die to save money'

Exactly. Even when the patient explicitly requests for treatment to be ended so they can die, the American health care generally needs to be forced to follow those wishes, particularly when there is still money to made.

'If we let you die, well that's cheap.'

Well, for the person wanting to do simply have their life no longer extended for a few days or weeks by vast amounts of expensive technology - but that is certainly not a way to run a profitable system.

'Poor people, by definition, qualify for Medicaid that pays the bills.'

There are a number of ALS patients who will be thrilled to hear that.

Since they don't want to be sued US healthcare facilities generally do insist the legal niceties be followed when it comes to pulling plugs on dying patients. But once the i's are dotted and the t's are crossed it's very unusual for providers to refuse to follow living will or next of kin directives. That usually happens when family members object, not doctors

"Every modern, industrialized country has working solution to this": some work better than others. Do not copy the NHS; there are superior models.

It is certainly true there are superior models to copy - but the major step up that merely having the American health care system function at the level of the NHS would be hard to overstate.

No worries though - with dedicated people like Prof. Cowen on the job, the U.S. will remain exceptional, and is unlikely to copy any of the other functioning health care models.

If NHS is so great, then why do wealthy Brits come to the U.S. for health care? No one goes to the UK for that purpose.

I knew wealthy people were the ones we should care about.

"No one goes to the UK for that purpose." You win today's International Ignorance award.

You really need to camp out in England for awhile to read the horror stores in the press about the NHS.

If "horror stories" is the criteria by which a health care system is judged, the US is not going to come out smelling like roses itself. I tend to judge health care systems by median outcomes, not outliers.

I like being able to get cataract surgery in a timely manner.

There are wait times for many procedures in the US too. You don't just show up and demand something done. And without insurance the wait time is infinite.

'And without insurance the wait time is infinite.'

But at least the U.S. does not ration health care, right?

"And without insurance the wait time is infinite."

False. By the way, insurance is mandated and subsidized.

'By the way, insurance is mandated and subsidized.'

Apparently 28.5 million Americans did not get that message in 2017 - 'In 2017, 8.8 percent of people, or 28.5 million, did not have health insurance at any point during the year as measured by the CPS ASEC. The uninsured rate and number of uninsured in 2017 were not statistically different from 2016 (8.8 percent or 28.1 million).'

You can get health care in the US without any insurance. Indeed, emergency care is guaranteed.

Furthermore, you know this. Your not an idiot and you've lived in America. Which means you are intentionally being misleading and are thus a Liar.

Sorry, this is just a touch too clumsy - 'Your not an idiot and you've lived in America. Which means you are intentionally being misleading and are thus a Liar.'

'If NHS is so great, then why do wealthy Brits come to the U.S. for health care?'

They don't come to 'America' for health care, they go to specific places. Much like wealthy Arabs tend not to go to Germany for health care, they go to Heidelberg.

And Akad nails it - basically, a normal person in the UK has much better access to health care in the UK (with zero hassles) than a normal American. This is particularly true in such areas as pregnancy, by the way.

Paywalled in today's Times:

'Germany should close more than half its 1,400 hospitals and cut 200,000 beds to improve the safety of patients, a think tank has suggested. ....

“The problem has been recognised for a long time: Germany has too many hospitals, and they are too small,” Jan Böcken, of the Bertelsmann foundation, the liberal think tank that commissioned the report, said.'

(i) Does anyone have any views?

(ii) Does anyone know what The Times means by "liberal"?

Ahh so you want patients dying regularly of dehydration, government deciding that patients cannot pursue wanted care on their own dime, and of course we see thousands of patients die and hundreds of thousands endure significant mortality because the NICE decides that they can wait.

"government deciding that patients cannot pursue wanted care on their own dime": false. The system has quite enough real faults - why do you feel obliged to invent more?

I thought this was uncontroversial?

Right, Great Ormund Street Hospital has never successfully petitioned to overturned desired treatment by the patient's medical power of attorney. The NHS bureaucracy never substituted their own judgment for the patient's medical power of attorney regarding "futile care" and attempted to block transfer for provision of desired care.

I think that the UK system would be one better systems to model. Any UKers here? Doesn't It allows people to to get private care if they choose to?


Their cancer survival curves are substantially lower than the rest of Europe, let alone the US. Most of the other best measures of medical impact are similarly not particularly great. They score how on things like "equity" and "access to care" and above all else being cheap. I would take the Swiss or the German model any day over Beaveridge.

In any event, care is sufficiently bad that around 150K go abroad for care annually and in the majority of cases do so on their own dime without NHS payment. On the flip side, the NHS routinely outsources to private care as they seem to be perpetually unable to meet goals for timely access to care. They have at times played with "any willing provider", but somehow this never amounts to anything.

Such is what one of my partners who practiced in the UK has related to me.

Because for the people who want cheap it is cheap and those who want to spend more can. I read somewhere that 9% for UKers have private insurance for stuff that the NHS does not cover and of course people can pay out of pocket and go to other countries for additional care.

Maybe greed is not as good as we have been led ro believe.

It sounds like this plan is Frockt.

Of course this is what is going to happen. US healthcare costs are dominated by hospital costs and service costs. The entire cost of health insurance and all government administration of the US healthcare system is just 8% of total. What you are paying for is a bunch of professionals doing miracles.

Why can't a monopsony bargain down the costs of physicians or hospitals? Because they are or will shortly face monopolies. Do you really think a popularly elected government is going to want to go on television and tell a few state senate districts that the local hospital will no longer be covered? That we will be reducing on hospitals per capita to the OECD average so you can now have a, standard, four hour drive to advanced care and the death rate that comes with closing all the emergency rooms nearby? And God help whoever crosses the nursing unions; dropping their pay to something sustainable at medicare rates is going to result in a lot of very angry people who have much experience at playing to the cameras and lawyering. And of course, the real regulatory capture will always come from the AHA. I have yet to see them fail at somehow turning regulation into another opportunity for petty empire building.

I mean seriously. Say you have a rural area with one hospital. The hospital cuts a deal with an insurer. The insurer will charge 80% of the typical private insurance rate. The hospital will provide all services at the average Medicare rate. This leaves 20% of the typical private insurance payment as pure profit which can be split 10 and 10 between the hospital and the insurer. This would more than double the insurers typical profit.

The answer is, that you cannot sustain a typical hospital on Medicare rates. 160% of Medicare rates basically just means that insurers will be paying hospitals right about what private insurance does with 10-20% risk premium.

Unless you are willing to fire many people, you cannot get cheaper healthcare in this country.

The hospital will not “provide care at medicare rates” b/c it CANNOT- hospitals do not break even on Medicare patients. Medicare rates are typically below cost for many services.

Whether or not hospitals break even at Medicare rates will depend on accounting, but it seems improbable as most hospitals accept Medicare.

What does seem possible is that Medicare payments are just above marginal costs but do not fully cover fixed costs. And therefore hospitals don't actually "lose money" on Medicare patients but are better off accepting them than not.

The problem is, hospitals still have to cover their fixed costs, and if everyone paid Medicare rates they wouldn't be able to do so.

Thus the Big Lie that it's even possible to have "Medicare for all."

Nah, we lose money on Medicare patients. In order to make us whole there are only non-fee-for-service pots of money that help to equalize things (e.g. all the residency positions being funded by the government). You also can afford to outright lose marginal cash on some patients if they do enough PR or other referrals (e.g. treating grandma well for a stroke can get you several generations of births and elective surgeries). Certainly places that don't accept Medicare or Medicaid lose out when the caregivers on private insurance want one stop shopping for the whole family.

The other big issue is that you can have a lot of care that overlaps. Medicare, for instance, only pays for certain things. If you want plastic surgery or many other services you can certainly pay for it out of pocket or via other insurance. Your Medicare patient will often buy some services at above Medicare rates.

All of this billing is convoluted and I don't pretend to understand all of it even when I am the one doing the billing. But at the end of the day, if you end up having too much Medicare or Medicaid on the books you either have to shed the bad cost sectors or you have to tap other funding (which the government tries to make available for "safety net" hospitals). Medicare rates cannot sustain hospitals with the current cost structure. I don't see how to manage it without firing a lot of nurses.

One very major way that hospitals recoup on Medicare payments is through inflated prices on outpatient services. Medicare pays the hospitals much more than they would reimburse a local doc to do the same test or treatment for instance. Plus the hospitals also reap a facility fee to help cover their overhead.

I had to laugh at this article. Does no one in Washington State remember the Washington Basic Health Plan passed in 1987, the publicly subsided health plan open to all? It was killed off after financial failure. "Those who do not read history..."

1987 might as well be 1787 to politicians working to buy votes.

What's missing in the post is a comparison of the state payments relative to what Blue Cross/ Blue Shield (or any HMO for that matter) pays for usual and customary medical fees.

Without that comparison, this post is untethered to a market and the assertion of regulatory capture is unsupported.

What's the evidence in comparison to BC/BS usual and customary payment rates.

Well, I guess Medicare for all costs 60% more than its proponents claim?

You did not answer the question.

By the way, if you do a little research, you would find that the NYT article mistook the 160% number as the reimbursement number, when in fact it was a cap to what the state would pay under some circumstances.

From HealthAffairs:

"The new policy requires that the total amount these state-contracted standard plans pay providers for all health care services (excluding pharmacy benefits) cannot exceed 160 percent of the total amount Medicare would have paid for the same services. Rates for certain rural hospitals are capped at 101 percent of allowable costs under existing Federal programs (including Medicare), while payment for primary care service payments must be at least 135 percent of Medicare. To address prescription drug costs, the state Authority may impose additional requirements on these public option plans, including increasing utilization of generics and application of evidence-based formularies.

With regard to the overall cap on what the plan may spend on providers, the requirement may be lifted under three potential scenarios: (1) doing so, by 2023 or later, would not increase premiums ; (2) the carrier is unable to form a provider network using these reduced reimbursement amounts; or (3) the carrier can achieve actuarially sound premiums that are 10 percent less than the previous plan year through other means. Keep your eye on number 2.

Pivotally, the legislation does not require providers to participate in the public option plan. It also prohibits carriers who offer such a plan from requiring providers to accept the public option plan rates as a condition of participation in other plans offered by that carrier."

Am still waiting for anyone to provide data on what reimbursement rates the state pays relative to Blue Cross or any other carrier.

Dare anyone to provide the data on negotiated rates.

If you're that interested in the data, why don't you look it up.

From the article:

"The Washington State Health Benefit Exchange, the marketplace that manages individual Affordable Care Act plans, estimates that private plans currently pay 174 percent of Medicare fees, making the proposed rates a steep payment cut."

Dear Rat,

There is no data. The act just went into effect, if you read the article I posted.

But, hey, facts don't matter to you.

By the way, the article also says the cap is 160% of Medicare and what you refer to says private plans pay 174% of Medicare, so the difference is small, and, unlike the post, which made it appear that hospitals and docs had captured the regulator and were overpaying, you now have a different story. Also, if you knew what you were talking about, you would also know that Medicare rates are low, and some say are a cause of fee shifting.

"But, hey, facts don't matter to you."

If facts didn't matter to me, I wouldn't have quoted from the article now would I.

"There is no data. The act just went into effect, if you read the article I posted."

Then why do you keep asking that other people provide you with data?

I don't know the local market, but generally Medicare reimbursement rates are something like 40% or so less than private health insurance; this gap is slated to grow under present straight line projections.

+1, there's no mathematically reasonable Medicare For All plan that doesn't have a drastic increase in reimbursements rates or a drastic cut in medical spending or some combination of the two.

An aside, on politics rather than medicine.
Note that a professional politician, David Frockt, is quoted as saying that everybody opposed his bill. And his own words tell us who is included within everybody: "The insurers, the hospitals, the doctors, everybody.”
Notably missing, the public.
Forget it Jake, it's Chinatown.

The cost of a health plan is not determined by payor rates alone.
If a health plan has a sick risk pool, its costs will be high even if it does pay low rates to providers.
This may be relevant for plans which offer a Medicare buy-in.

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