Tyler Cowen is assessing the current state of debate over a public plan option. The central question we need to get straight is whether or not the public plan needs a subsidy. Clearly, the government can drive out private insurance options by providing a service below cost. But of course, this has unpopular implications. The taxes need to subsidize such a service would be high, and the subsidy might crowd out private insurance, as employers dump their employees into the public plan. Or at least, that's what Wal-Mart's bashers tell me inevitably happens.
Assume no public subsidy, however. Does the public plan cost more or less than a comparable private plan? In part, that depends on what you think the adverse selection problem will be. To review for those who slept thorugh Health Care Economics 101, adverse selection is what happens when you have severe information asymmetries in a market. Say the average cost of insuring the entire US population is $200 a month. Well, if you don't use much health care, you might not want to spend the money. On the other hand, if you consume $400 worth of health care a month, it's a fabulous deal; you'll definitely sign up.
So all the people who are sicker than average sign up, and some of the people who are healthier than average don't. The average cost of the insurance rises to $250, and so do premiums. Some more healthy people drop out. The average cost of the insurance rises to $325, and so do premiums . . . rinse and repeat until all you've got is an insurance pool of very sick people. In autos, this is familiarly known as "the lemon problem".
Now, the adverse selection story is not as strong as you might think, but the one CBO estimate suggests that community rating (which prevents insurers from charging sick people more) adds about a 30% premium.
Ezra Klein thinks that in his "strong" plan, where the government gets to use Medicare reimbursement rates, the plan can save enough money to offset the losses on sick people, and drive down the overall cost of insurance to attractively competitive rates. I am unconvinced.
Thirty percent is a big savings. Where is it going to come from? Before you blurt out "administrative costs" remember that even if it sets reimbursements on the Medicare schedule, the new plan is not going to enjoy all of Medicare's low administrative costs. Medicare shares administrative infrastructure with Social Security for current retirees. Once people have passed a threshhold--they are over 65, they have contributed to FICA for a certain number of quarters--Medicare doesn't spend much more time worrying about them. Virtually everyone who is qualified joins, and once enrolled, they never leave. Any premiums owed are deducted from their social security checks. If they join an HMO, Medicare deals with bulk billing.
Medicare-for-all, or whatever we're calling the strong plan, is going to need a large new administrative apparatus for doing things like billing customers. It is going to have to verify that their accounts are current. It is going to need (oh, fun!) a collections mechanism. To compete with a private plan it will need prescription drug coverage, which means integrating with pharmacies. If it is going to attract the low-risk patients who will keep the average cost down, it will need to advertise its prices, which implies a marketing department. Patty Duke probably isn't going to bring them in.
But I think that in many places, at least, the state system is going to find it hard to attract low-cost patients. It seems to me that given the existence of a state program that will not turn patients away, the optimal behavior for someone who is currently basically healthy is not to buy it. Buy some super-cheap catastrophic plan to deal with a car accident or similar, and then enroll in the public plan if and when you get cancer or something longer term. People try not to do this now because continuity of care affects your ability to get insurance for pre-existing conditions. (Also, places like New York have made cat coverage effectively illegal). But if the public plan exists, gambling actually becomes more practical. Contra Tyler, I expect that Ezra's strong plan would actually hurt private plans as some of their healthiest, youngest patients made the rational decision to join the ranks of the uninsured.
And what about the government's infamous ability to wrestle new savings out of "providers"? They are large, but they are not unlimited. Medicaid patients find it very difficult to get doctors to take them, since the doctors tend to lose money on their care. (I've heard persuasive arguments that "Medicaid mills" adept at fraud are integral to providing care to the poor--without the fraud, Medicaid doesn't reimbursements won't cover the bill.) Medicare patients are starting to have the same problem.
Moreover, I'm fairly hard put to see how jawboning providers is going to save huge sums over a private insurance plan. Yes, the government is a gigantic provider. So is Aetna, and it's pretty motivated to negotiate. I think the government has some extra bargaining power. But enough to knock, say, 20% off prices, compared to a private insurance plan? Without getting any of that 20% stealthily reclaimed by doctors who run extra lab tests, etc?
Ultimately it's an empirical question though, and perhaps I'm wrong.
Copyright © 2010 by The Atlantic Monthly Group. All rights reserved.
It is going to need (oh, fun!) a collections mechanism.
Obviously you've never done any collections work, which can, in fact, be rather entertaining. Probably less so if you're going after nice little old ladies, though.
"The taxes need to subsidize such a service would be high..."
I don't think the government works like that anymore. We just borrow and spend. Taxing people in order to pay for government spending is soooo Carter Administration.
I'd be happier with a car insurance model that doesn't put too much interference on the insurers. Your job probably doesn't pay for your car insurance and it shouldn't your health insurance.
As long as the gov. doesn't get in the way demanding what kind of truly non-essential policies must be included, what is the problem with this?
You look at the various plans. You buy one accordingly. You live with the results and are responsible for your own decision making.
What are the arguments against this kind of model? (other than some low income inability to pay, which could be covered)
I assume this is a car insurance model such as those where the states mandate you have auto insurance, but don't mandate which? (And I assume by the low income issue, you mean there will be a catch-all gov't subsidized low-end plan for those who can't afford private insurance?) If so, how does this address the lemons problem? I suspect that the American people would not tolerate a "low-end" gov't plan that was truly bare-bones (since that so easily goes into an issues ad showing poor people dying and rich people having nice posh care, etc.) So if the gov't plan is truly not bare-bones, you've definitely got the same adverse selection problems that Megan mentions.
You could just issue everyone a check to buy their own insurance (with people topping it off according to their own desires), but that has two problems: first, I think that's what McCain was proposing, so somebody would be eating crow. Second, as the sun will rise tomorrow, you can be sure that no healthcare plan will ever ever be less than whatever that government check or tax credit is (so there will be very little emphasis on cost savings below that point). And, of course, there may be other pressures against cost savings, too -- there will be enormous lobbying pressure for that gov't credit to increase each year to deal with increases in healthcare costs, both by consumers and by producers (with attendant risks that this plan just becomes a gov't trough for insurers and pharma companies).
I like the mandatory auto liability model. The government could do this with health care with the provision that if you need something the plan doesn't cover, they'll helpfully garnish your wages until the debt is payed off.
Non-compliance. Right now in California, more drivers have health insurance than have liability insurance. Yet it's liability insurance which is mandatory.
That is the Swiss model but in Switzerland there is no government plan to "keep them honest". Those who can't afford, get a subsidy.
In most industries, profit motives of private companies bring about competitiveness and efficiency. How do you improve profit in a health insurance co? Easy. You do everything you can to deny claims, categorize treatments in an obscure manner so they are paid at lower reimbursement rates, you call everything pre-existing when someone new signs up after changing jobs with even a 1-day gap in coverage, gradually ratchet up premiums at 2-3X inflation, and only accept individual applicants that are unlikely to use much health care.
Support for public health care options have increased since 92 because HMOs and PPOs by and large suck worse than any gov't bureaucracy can manage. Why are the private health insurance cos so opposed to the public option? They know the private plans do not add value to health care. If the public options sucks as bad as they claim, how are the private cos. harmed? Going through the budget process to get healthcare reform means the public plan would disappear within a decade unless re-approved. So if it sucks, it will go away. If the public plan rations and limits care as we are supposed to fear, people will stick with private plans or change back after they experience the public plan hell if the warnings are true.
In short, the public plan is an OPTION. If it sucks compared to the oh so great private cos who haven't bothered to reform since making promises in the early 90s, people will not go for that OPTION.
Going through the budget process to get healthcare reform means the public plan would disappear within a decade unless re-approved. So if it sucks, it will go away.
Yes, of course, only things that are totally awesome and efficient make it through the "budget process." Duh. National healthcare is a no-brainer!
You don't seem to have dealt with the INS, or the Social Security Administration in a big city.
Here is what any plan requires first and foremost: that every American have access to necessary health care regardless of their financial or employment status. Anything less is an insult to conscience.
Freddie -
Define necessary. Necessary as in emergency, life-saving treatment? That's already a given. Every american DOES have that.
Necessary as in presents to an ER with a 102 degree fever and is given a 2-week dosing of CIPRO to wipe out a bacterial infection?
Necessary as in receives an annual physical, stress test, and lab work? Gyno exams for women & mammograms?
I'm wholeheartedly supportive of our current laws which give every american life-saving treatment in a medical emergency. I get into a gray zone with the second area....
Oh come on - are you a doctor? An actuary? Do you have access to the cost-benefit analysis for any of these procedures? I don't want you defining the health care system for the rest of us.
Our patchwork private insurance system for working people under 65 is grossly inefficient and severely rations care. And it does not, as you say, "give every American life-saving treatment in a medical emergency." In most states, you need to be destitute before that happens.
Sure it does. No one gets turned away at the ER room. Everyone gets to see a doc, regardless of their ability to pay. They are billed for it later, but they are treated. Some conditions are stabilized, and require further treatment later, but once they are stabilized, it is no longer an emergency.
That's untrue. You can't get treatment for cancer at the ER.
Mark... you critizie others because they have no expertise in health care, but it's doubtfull you have any on either. What is you experise in government run or socialized health care. You should speak to individuals in those types of insurance programs and you will probably change your mind. I just completed treatment for Prostate Cancer and the number of Candians I encountered who came to the U.S. for treatment is eye opening. One individual who I spoke with would have had to wait 6 months to see a specialist and another year for surgery. He came to the U.S. and had everything done in 3 months. If I would have had to wait 1 1/2 years I would have died. Is this the type of health care you want.
Well, let's see. I'm married to a doctor who has worked in both public and private hospitals. My father has worked for a provincial health ministry in Canada for decades. I live in the US. I used to live in Canada. I've used both systems. I've watched family members die in hospitals in both countries.
So, yeah, I've spoken to a lot of people who've used both the Canadian and the American system. Canadians are pretty happy with it - notwithstanding the rich, right-wing people you met at a private clinic - and Americans, well, they seem to hate it. Other than old people, of course, who benefit greatly from a public system.
I think you have a valid point.
Except in the case of immediate, life-threatening emergencies, 'necessary' means different things to different people.
For some, it will include elective cosmetic surgery to help their self-esteem, weekly visits to psychotherapists, chiropractors, alternative medicine, etc...
Someone will have to define it and the minute anyone tries to come up with a precise definitition of 'necessary', people will complain.
No problem. Just enslave the doctors.
Freddie, could you define "necessary"?
Could you also tell us what you believe the benefits of such a plan would be?
I.e., do you consider medical procedures delivered to be an intrinsic good thing, or simply instrumental to some other useful good (like improved health)?
Ditto. Also, I want a red plastic rocket, and a pony.
You think giving health care to people who desperately need it is an appropriate "and a pony" moment?
I can't speak for BobW, but I do. At least until you seriously engage the question of the standard of care to be given away for free. Food stamps don't buy you Nobu, and Section 8 doesn't buy you a McMansion.
I also do, since you keep repeating the same monotonous thing in every healthcare-related post on this site but have yet to explain how you intend to structure and provide this better alternative in light of the public healthcare access we already have and its known limitations.
"Insult to conscience" makes for a nice sloganeering point at a political rally but it isn't very helpful in a forum like this one where you have as much time as you need to establish and defend a position.
I do as well. Until you define "necessary," it's just meaningless words. No single-payer healthcare system provides all "necessary" care with no consideration for cost. It can't, or it would go bankrupt, since you can spend an infinite amount of money on care that offers a non-zero chance of helping a condition improve. In other words, do you know of any national healthcare plan that would spend $500,000 on treatment with a 80% chance of success of eliminating cancer in an 80 year-old? Or even $2 million to provide a 0.5% chance of recovery to a 20 year-old?
Until you nail these things down, you're not thinking these things through and not addressing the arguments put forward by others.
Your post most certainly is. As the other commenters said, you fail to define "necessary health care".
Worse than that, you ignore human nature. You pretend that if we hand the problem to the government it will magically be solved. I have news for you. The Federal Government is not God. It is neither omniscient, nor omnipotent. That's good, because it is most certainly not omnibenevolent.
Instead, we will get the British NHS expanded to cover 300 million people. There will be massive and increasing bureacratic overhead, ever stricter care rationing, and fewer and fewer doctors willing to work in the system. We will get doctor strikes. Already many doctors refuse to take Medicaid patients. You will put everyone on Medicaid.
Good care within the system will not depend on how much money you have, but how politically connected you are. The rich will get their care outside it.
The plural of anecdote is not data, but I have personal experience with the contrast between socialized medicine and our system.
My father-in-law, in Finland, died of metastasized colon cancer because of the combination of a doctor's strike and the fact that the oncologist went on vacation with nobody to cover for him.
My father, in the USA, had his surgery two weeks after his diagnosis. His cancer did not get a chance to kill him.
I agree entirely.
But, really, is simple "necessary health care" enough?
So much of health is dependent on proper nutrition, so I think it insults the conscience to think that any American might not have access to necessary food regardless of their financial or employment status. And to stop the naysayers, I'll say clarify that "necessary food" can't just be government cheese or fast-food type stuff, it insults the conscience to think of anyone eating significantly better simply because they have more money. Everyone should eat like an solid member of the middle class regardless of ability to pay.
Second is fitness. So much of health is staying in shape. Everyone should have access to necessary fitness facilities regardless of financial or employment status. It insults the conscience to think of someone having access to better fitness options solely because they can afford it. "Necessary fitness facilities" should include a standard gym with frequent availability of personal training.
Third, what about clothing? If you lack access to proper clothing your health is necessarily affected. It shocks the conscience to think of anyone having significantly more or better clothing simply because they can afford it. We must all have access to the very best clothing regardless of financial or employment status.
Lastly, a clean and healthy living space is necessary to health, thus everyone should have access to necessary living space. It is an insult to the conscience to think of anyone living in a better house simply because they can afford it. "Necessary living space" should not imply basic, decrepit, crime- and absestos- ridden government housing with poor open space, light and ventilation. Rather, by "necessary" I mean a solid middle-class living space: a single family home with separate bedrooms for each and every family member, common space, heat and cooling, computer facilities, and ample communications options (home phone, cell phone, high-speed internet).
There are those who think that providing thses simple basic rights to all Americans is too expensive or not worth it. I reject that. I join Freddie in saying "Yes We Can" provide everyone with a solid middle-class lifestyle and living options regardless of ability to pay for or maintain that lifestyle.
Define necessary. Necessary as in emergency, life-saving treatment? That's already a given. Every american DOES have that.
Not without leaving them in life-crippling, debilitating debt.
Lots of things can leave people with "life-crippling, debilitating debt". That's what we have bankruptcy laws for.
Anything less is an insult to conscience.
I'm just wondering what responsibilities the recipient has. Does an alcoholic have a right to a liver transplant (even though it may be an emergency)? I think a social contract is a two-way street.
It seems to me that there are a limited number of ways in which healthcare costs could forseeably decrease by offering a government-run plan:
1. (not yet mentioned) The government won't tax it's own revenue and should only need to run in the black, not necessarily make a large profit. Since almost no government run organizations manage this, I assume it's not very feasible....
2. Provide less healthcare services....nuff said.
3. Use monopolization of market space to push down provider costs (although really, who is going to take even a 10% slash in pay? Labs? Nurses? Doctors? All of the above? Will they not try to cheat the system?)
4. Administrative cost-savings. As Megan pointed out, maybe a bit, not a large amount. And that is a one-time savings.....since healthcare costs have been skyrocketing in recent years, it's not administration skyrocketing the costs
I think there are a few more i'm forgetting right now. I genuinely don't understand why a national healthcare plan is thought to provide THE SAME level of healthcare service our nation currently enjoys, AND be cheaper.
Also, please bear in mind that emergency health service is provided to individuals without insurance. It's extremely common. I have people in my family who have racked up $10k plus in expenses that have been never been paid because they didn't have insurance.
What are the arguments against this kind of model?
Mainly that people will NOT be willing to live with their choices. Nobody will just lay down and die because they chose a cheap plan with lousy cancer coverage, or tolerate a permanent disability because their orthopedic coverage is less than optimal.
Our culture (and tax code) have fostered two beliefs with respect to health care: 1) I should have the very best care available with no compromises, and 2) I should not have to pay for it. (If you doubt me, see Freddie directly above). These beliefs are not prevalent in the auto-insurance industry, so the "get what you pay for" model is prevalent. But people are simultaneously unwilling to get what they pay for and pay for what they get in health care.
Hence, a "crisis" requiring government intervention, the government being the only body on Earth capable of giving everything to everyone for free.
Freddie, I'll ask the same thing I ask whenever you say something similar: what means "necessary"? We can probably provide 1980-level healthcare to everyone pretty cheaply, but that would be considered malpractice by today's standards. Is that good enough for you, or do you insist on better?
Conscience doesn't put food on the table, and we need our economy to provide us with a few other things besides health care.
That will have to be fought out, and it will often be contentious. But it has to come in the context of a guarantee of a certain, publicly-defined (through representation) minimum level of care. We don't even have that yet. Let's enshrine such a minimum guarantee with the knowledge that the minimum can't be everything but must be many things, and do what we do in democracy, hash it out.
We already had that -- it was the Oregon Health Plan. It's awfully expensive and not very well-supported, even in a deep blue state like Oregon.
If a Republican President and Congress passed a plan that just gives everybody a voucher for a five-minute exam by an LPN a year, would you consider that sufficient, given that it's what the political system had hashed out? After all, it would be a "a certain, publicly-defined (through representation) minimum level of care". Not a hell of a lot, but you're the one who's refusing to specify any level.
Indeed, a guarantee of none already is "a certain, publicly-defined (through representation) minimum level of care". It's just lower than you like.
In order to "hash it out", you're going to have to actually say what level you want. So, again, how much health care, and what types of it, does there have to be before it ceases to be "unconscionable"?
Going through the budget process to get healthcare reform means the public plan would disappear within a decade unless re-approved. So if it sucks, it will go away.
I would appreciate it if you could name one government program that has ever gone away (civil war pensions don't count).* Or do you take the position that no program ever created has sucked?
Once somebody--anybody--is on the public plan, then any move to change it at all will be vilified as "THEY'RE TRYING TO TAKE AWAY YOUR HEALTH CARE!!!!"
*(OK, OK, they abolished the Board of Tea Appeals. But that wasn't exactly a major driver of government spending, and to the extent that Customs is going to regulate tea imports, it really ought to have a fair appeals process anyway)
would appreciate it if you could name one government program that has ever gone away (civil war pensions don't count).*
Resolution Trust Corporation.
Good one! Now, name a government program which, unlike RTC and civil war pensions, didn't have clients who were either dead already or eventually going to die.
Works Progress Administration (1935-1943)
Resolution Finance Corporation (1932-1957)
Civilian Conservation Corps (1933-1942)
Civil Works Administration (1933-1934)
Aid to Families with Dependent Children (1933-1997)
The peacetime draft (1926-1973)
And, of course, depending on how you define "program", there's FDR's restrictions on ownership of gold, Nixon's price controls, etc.
WPA > ObamaJobs Summer 2009
RFC > TARP
CCC > WIA
CWA > higway department, utility commission, water department
AFDC > TANF
draft > selective service registration (still required of males 18 and older)
Seriously dude, these things all still exist. Some are exactly the same with just a name change.
If the public plan can (a) offer Medicare rates and (b) require providers to accept the public plan (either directly or as a condition of accepting Medicare), then it can probably price compete with the private plans.
Medicare rates are often significantly below providers' costs of production, which the providers cover by passing those costs onto their patients with private insurance. By offering Medicare rates and forcing providers to accept the public plan, the PP gets to (1) pay less than cost for the health care it provides, (2) pass those costs onto the private plans, and (3) save itself the cost of negotiating face-to-face contracts with all of the health care providers in its network.
Here is what any plan requires first and foremost: that every American have access to necessary health care regardless of their financial or employment status. Anything less is an insult to conscience.
Freddie, I think we all agree with your principal: that "every American have access to necessary health care regardless of their financial or employment status." I cannot find one single person, left-wing or right, conservative or liberal, Rep. or Dem., that disagrees with you. This is simply not a controversial position, and it's silly to pretend that if, for example, somebody prefers private health insurance to government-rationed care, then they somehow don't want everybody to be covered.
There are lots of things in this life that are 100% necessary for everybody, but which, for various reasons, the government cannot or should not provide. Food is, one could argue, even more necessary day to day than healthcare. But I do not receive -- nor do I wish to receive -- my daily bread from a Washington bureaucrat. It would probably be stale, bad-tasting, and not custom made to fit my tastes. But when I say that I do not wish for the government to feed me, I am not saying that I do not wish to have food.
This is to say nothing for the deeper issue of positive vs. negative rights. You say that everybody has a right to health care; somebody else interprets this as you saying that you have a right to other people's money and the fruits of other people's labor. To be precise: most positive rights violate other peoples' negative rights. I am hungry for lunch and will become weak if I do not eat soon, but that does not mean that I have the right to go take food away from my colleagues who brought their own.
I am not automatically against socialized medicine. But it's difficult to hammer out the most efficient and rational ways to expand quality health care as broadly as possible while politicians and journalists keep insisting on pretending that the debate is a moral rather than a practical/economic one. (It would be a moral issue -- like abortion, for example -- if people disagreed on whether or not health care should be universally available; but nobody argues otherwise, so that's a straw man.)
(Besides, the disagreement is not whether or not to cover everybody, but how to go about providing that coverage. And, as TreeJoe already pointed out, we already do provide "necessary" health care to everybody regardless of their ability to pay, if you define "necessary" as "ER." The debate is over how broadly to define "necessary.")
"it's silly to pretend that if, for example, somebody prefers private health insurance to government-rationed care, then they somehow don't want everybody to be covered."
That's a disingenuous statement. If you prefer that private health insurance ration care in the truly horrible way that it does right now, you do indeed not "want everybody to be covered."
You and I receive our health care coverage from a nameless, faceless corporate bureaucrat in a state we probably don't live in. He or she could care less if we die, but is very concerned about whether his insurance company makes a profit. There is no defense for that stance.
Mark,
And that's a completely disingenuous response.
You say we receive private health insurance rationed out in a truly horrible way. Do you say that because of a health insurance claim? The way we receive standardized treatment? Or because of the way the claims process is handled?
Because I feel our health insurance companies are overly generous in many instances of STANDARD care (not unique care).
The people who run insurance companies are often agonizing over their need to maintain a modest profit margin while providing care that is appropriate and helpful. None of them are making huge profit margins.
And let's be clear: any successful business (including government) needs to operate in a way that makes a profit. Otherwise, you are operating at a loss and/or you have no protection against downtimes in the market. Ensuring a steady and robust profit is not an evil act.
On the contrary, there is no defense for your stance.
The private health insurance system is supposed to cover people aged 0-64, which largely lets it avoid the massive costs associated with the last year of life. It then dumps the poorest and the sickest on the government, and leaves 15-20% of the remaining largely healthy without insurance. It wastes *our* money on a bureaucracy that would put the federal government to shame. And it fights tooth and nail to stop any effort to repair the system.
It's one thing to say that neither a public nor private system will solve all of our problems. But it's a whole other thing to defend our pathetic excuse for a private health care system as something that's overly generous. But hey, only 9 out of 10 doctors think you shouldn't smoke, so clearly some people don't get it...
Mark, you didn't answer TreeJoe's questions.
Mishu,
His "questions":
"You say we receive private health insurance rationed out in a truly horrible way. Do you say that because of a health insurance claim? The way we receive standardized treatment? Or because of the way the claims process is handled?"
Don't make any sense.
Mark, I really do want everybody to be covered. I know you may think you can look deep into my soul, but you are wrong. I know it may make you feel good about yourself to imagine that, since we might (but not necessarily) disagree about the best and most efficient way for health care to get delivered, that means that I actually desire for people to go sick and untreated. But that is moral infantilism at best, Bush-like "with us or against us" reasoning at worst.
Beyond that, you did actually make an arguable statement, so I'll reply (and -- gasp! -- without piously impugning your motives). Here's the difference between the "nameless, faceless corporate bureaucrat in a different state" and the nameless, faceless HHS bureaucrat in DC: if I don't like how the nameless, faceless corporate bureaucrat is doing his job, I can choose a different one. When it's Washington, it's one-size-fits-all.
That doesn't mean it might not be a better alternative. But please don't pretend there aren't opportunity costs at work here. You have to give up certain things -- flexibility, on-demand medical attention, innovation -- in order to nationalize health care. The debate should not be about who are the evil ones who "want" people to die in the streets; it should be about which tradeoffs we are prepared to accept and which we are not.
"if I don't like how the nameless, faceless corporate bureaucrat is doing his job, I can choose a different one."
If that was how the system was going to work, we'd have that choice right now. And it's possible some of us do - I once had an employer that offered a choice between Blue Cross and Kaiser. That was a long time ago. I'd love to ditch the bureaucrat who screws up the claims every time I see my doctor, but there's only one insurer for my company. I have no options in this market, aside from dumping my company plan for individual insurance, which is a pretty frightening prospect that I hope I never face.
And while we're on the subject of moral infantilism, suggesting that improving health outcomes for the nation as whole or that making sure cancer does not lead to bankruptcy is akin to stealing the fruit of someone else's labors betrays a deep lack of compassion for your fellow man. But it fits right in with the Republican Party.
Mark,
Could you point out where I said that "improving health outcomes for the nation as a whole" and "making sure cancer does not lead to bankruptcy" is the same as stealing? Or are you putting words into my mouth because those words are easier to argue with than the words I actually said? What I said is that, in a government-run system, somebody else has to pay for my healthcare with a) their taxes, b) their time (i.e. waiting extra to see a specialist), c) their inability to choose their own doctors, and d) the new medical innovations that would go undiscovered. It may or may not still be worth it, but is the fact that socialized medicine has costs really in dispute? You may find these opportunity costs objectionable and inconvenient, but when I merely point out that they exist it doesn't mean that I want people (like my mother) who suffer from terrible chronic afflictions to be thrown out on the street. (I should say here that my experience with her on Medicare has been quite frustrating -- think, "we only see Medicare patients before 8am" type crap. When you cap prices for a thing, you get less of it.)
Likewise your ad hominems: they illustrate why it is so hard to make any progress in some of the more complex and difficult debates today. What makes you think I am a Republican? (I am not.) Why do you need to caricature anybody who challenges you into the cartoonish Mr. Burns villain of your own imagination? As I said before, I am actually quite open to government healthcare; as a graduate student contemplating several years of unstable postdoc work, there are many ways that I would benefit immediately.
That being said, you make a good point that the employer-based system is the broken relic of a past age, from when people stayed with the same jobs their whole lives. I also remember that when some (like John McCain) suggested getting rid of it, they were accused, once again, of wanting cancer patients to go bankrupt or something. Because, I guess, they hate people with cancer.
Did you not write: "You say that everybody has a right to health care; somebody else interprets this as you saying that you have a right to other people's money and the fruits of other people's labor."?
Is that not your opinion? Are you merely listing potential opinions held by someone, but not ones you agree with? If I say that our system should provide cancer treatment to the level of what's provided in Canada regardless of an individual's ability to pay and you say that "violates someone else's negative rights", what conclusion am I supposed to draw?
I also don't see how paying into an insurance plan where the government sets reimbursement rates is "taking food from colleagues who brought their own lunch," while paying into an insurance plan where a private company sets reimbursement rates is something else entirely.
As to the Argument Ad Hominem, if you don't like it, then don't use it as much as you do. You are no enemy of logical fallacies, particularly the "Appeal to Free Markets" and the Appeal to Authority - John McCain's "health" plan? Everybody saw through that one.
People keep forgetting the free health care at the public health department. There's lots of basic routine health care going on there. No ER needed.
The uninsured person who gives their real name in the ER and ends up with a big bill is stupid. Give a fake name like the illegal immigrants do.
An empirical question indeed. But there must be some projections, right? Well, maybe there's not independent projections.
If the cuts in administration costs (and, in spite of the additional administrative apparatus you mention, these costs are still much lower in all other countries with a public plan, even the ones with private competition from insurers), plus the cost reduction in bargaining power are not enough to make health care available for everyone, by all means, let's ration care. People who aren't satisfied with rationing can buy a private plan. People who can't afford a private plan may now at least get some form of medical care they didn't have before.
It's hard to see is how can anyone by opposed to some form of public plan. Probably the most important question is: do you make it mandatory to have some form of health care plan?
- doing so would reduce the per capita costs of the state plan by preventing the last-minute insurance cheaters.
- on the other hand, a non-mandatory plan may be politically more viable, to avoid the inevitable bunch of idiots going around screaming "OMFG, the government is forcing people to buy insurance! Have you ever seen anything more blatantly Socialist? I never felt my liberties more violated than right now.", etc.
Nimed -
I wonder if Medicare can be adopted to allow those under 65 to buy-in for a certain premium (maybe allow this to be slowly ramped up by age group to allow for Medicare to assess enrollment and up-size accordingly) and then graduate into 65+ care.
Or maybe the federal-government-employee plan can be expanded to everyone and allowed to buy-in.
For me, it's not a matter of a opposing a public plan. I'm not at all opposed to it. I question the wisdom behind giving the plan to all and paying for it by some/all.
It's a form of robbing from the rich to give to the poor, absolutely. But the rich in this case is a HUGE amount of u.s. citizens, not just the "wealthy elite".
There comes a point in which you rob to the rich to give to the poor, and you simply create more poor.
Government expansion is a big driver of that process.
TreeJoe,
Your concerns are all valid. But none of them argues against the principle of a public plan.
Suppose you come up with a "consensual" fair price for a government plan, and that this plan has a lower price than current private insurance plans (otherwise there wouldn't be any point to its existence). Let's categorize the ways in which the plan can cover the difference:
- it can be more efficient, mostly by reducing administrative costs.
- it can be cheaper due to the superior government bargaining power.
- it can have some form of care rationing.
- it can be subsidized.
It seems there's no agreement as to the relative size of these 4 cost-reducing components. But you do accept that the only wealth redistribution component is the last one, right?
Suppose further that the last component is zero. Does it still make sense to have a public health insurance option? The answer is yes, unless you are convinced that government inefficiency at providing this service would increase costs so much as to offset the government advantages as a provider.
Now, you may very well say something like "Come on! Do you really believe that a government plan, once in the hands of Washington politicians, could ever would be subsidy free?". Well, maybe I'm being naive on this, but I would say that it can. This system exists in Switzerland since 1994, with pretty good results in terms of health care outcomes.
One problem - Switzerland is the 2nd country in the world with the greatest health care costs as a share of GDP - 11.6% vs. 15.3% in the U.S. So the problem of costs would have to be addressed again 10 to 15 years from now. But meanwhile, it would accomplish a wider coverage with smaller costs, and all with a relatively small expansion of government.
Ugh. You had already enumerated cost reduction sources upthread. Oh, well...
I'd just like to note that these two:
- it can be cheaper due to the superior government bargaining power.
- it can have some form of care rationing.
are roughly the same thing. "Bargaining" like this is a zero-sum game. If you force providers to take less money for services rendered, there will be fewer providers. Some of them will have to shut down because their revenues no longer cover their costs, others will retire early because it's not worth the trouble for such a small return, some will quit practicing medicine to be professional expert witnesses, still others will decide to be come finance-industry quants instead of going to med school.
Fewer providers means longer waits and probably some number of people who get no care at all.
Rob, you're assuming that all cost reduction from bargaining power comes from cutting doctors and nurses pay. Government can also negotiate, for instance, drug prices. In this case, the likely negative effect would be a reduction in research (as well as marketing and advertising, but I think we can live with that), and a slower pace of progress in drug discovery.
This is all, of course, dependent on the elasticity of the supply curve in each of these goods or services. How much doctor hours do you lose for each dollar you cut in medical pay? How much research is diminished by each dollar that is cut in the price of a drug? We don't know the answer to these questions.
But I disagree that it is a zero-sum game. Or at least you didn't pose the problem as zero-sum. What quantity are you referring to that always adds up to zero?
I think we're talking about maximizing (or at least increasing) the elusive quantity called aggregate utility, and this is not exactly an objective, value free quantity. It's not even consensually treated as a cardinal quantity.
Suppose that government suddenly ends Medicare and Medicaid, and dumps all the money on doctors salaries and medical research. Lots of poor and elderly people would die earlier as a result of this policy. On the other hand, waiting times for people who could afford health care would decrease, and we could expect development of new drugs to increase. Do this gains perfectly compensate the increase in population mortality? It would be a remarkable coincidence.
Zero = change in provider's revenue + change in government costs.
I don't disagree with anything you've said in your most recent reply. My point was that "bargaining power" can never really cut costs. It can only either 1) shift them around (If I drive a hard bargain with a car dealer, either he takes less profit or he negotiates harder with the next customer, who must then pay more), or 2) buy less of something (as in the drug case, less research, and hopefully less marketing, or in the doctor case, where some doctors quit because of lower payments). In that sense, bargaining power is a disguised form of rationing.
We may wish to make the tradeoff, but a tradeoff it definitely is.
In short, the public plan is an OPTION. If it sucks compared to the oh so great private cos who haven't bothered to reform since making promises in the early 90s, people will not go for that OPTION.
But it's only one option among many if the government doesn't subsidize it. Otherwise, the subsidies allow it to undercut all private plans, and the private plans mostly disappear (except for the very wealthy).
In most industries, profit motives of private companies bring about competitiveness and efficiency. How do you improve profit in a health insurance co? Easy. You do everything you can to deny claims, categorize treatments in an obscure manner so they are paid at lower reimbursement rates...
But these same arguments would apply in equal force to all forms of private insurance: auto insurance, homeowner's insurance, business liability insurance? Why don't insurance companies pull all kinds of stunts all the time to avoid or minimize payouts? The obvious answer is reputation. If customers don't trust that their insurance will pay when it is needed, in a competitive market, the customers switch to a different insurance company. A company with an ever-shrinking customer base can't improve profits by screwing over those few customers it has left.
Do you want an insurance company that pays all claims cheerfully and willingly and without giving it a second thought? Yes and no. Sure, you want them to do that for *your* claims, but you also want them to check carefully for fraud and unnecessary expenses with everybody else because otherwise your premiums (or your taxes or both) will be much higher.
yes, perhaps you are. (wrong) We don't get to decide whether to "enroll" in Social Security. "Universal" health insurance means just that--there are no opt outs!
In the end, reasonable actors here will line up for mandatory participation--public or private. Even the President, despite his campaign position to the contrary. And social security starts when you first go to work, so several of your assumed government overhead expenses would not be as high as in the private sector. And marketing goes away.
You conveniently(?) forget to mention that a large component of private insurance cost is due to their large investment in figuring out what they will pay for and which customers they will or will not insure. With a universal plan, a lot of that expense goes away.
The real, and as yet unaddressed problems with our system relate to over-treatment--too many overpriced testing procedures, treatments, etc. And how to end our lives in dignity, without costing the system way more than we ever put into it in premiums over our lifetime. Hope this helps.
You seem to be under the impression that the government does not make a large investment in figuring out what they'll pay for. They do--indeed, have an entire agency that does just this.
I agree with you that they spend administrative effort getting rid of poor risks, which the government wouldn't. But how big is that administrative effort compared to, say, collecting bills? Single payer advocates simply assert that it is large, and perhaps it is. But from what I know about how companies are usually structured, I've no particular reason to believe that the administrative effort of denying claims or vetting customers dominates the administrative effort of paying them, or billing customers. Indeed, it seems very probable that the latter two are much larger.
The implication is that private insurers are leaving 20% or 30% on the table if they only knew how to get it? And they are proposing that government bureaucracy is going to provide that smarter guy and do it better than the guy looking for a profit? I'm skeptical.
When you say "places like New York have made cat coverage effectively illegal", what does "cat coverage" mean? Something to do with continuity of care?
catastrophic
Mark,
Are you quibbling about the word "give"? If you are found desperately ill by anyone who calls the police or an ambulance or 911, or come to an emergency room, you will be treated. (In fact, I think if you come to an ER you'll be treated whether it's an actual emergency or not, though if it isn't you may be waiting for some time.)
What you're saying, I think, is that if you are judged unable to pay for the care, you don't have to; if you're judged able, you will. Or at least will have it treated as a debt that you ought to repay if you can.
Freddie,
OK, here is what I think any plan that would be better than the status quo requires first and foremost: That every American have access to insurance against catastrophic medical expenses. By "catastrophic" I mean the sudden $200K bill for the car accident or the brain tumor or the bullet lodged in the lung or the leg-severing or blinding industrial accident.
That's what "insurance" is. That's what it's for. And it's possible (nay, easy) to design plans that insure against this sort of thing, but leave lesser, smaller medical matters uncovered. All you need is a highish deductible. If it's minor, you pay for it. If it's major, and rare -- you know, the sort of thing people tend to insure against, like flood and earthquake and fire -- you pay the deductible and the insurer pays the rest.
I repeat that I really don't see what's so dreadful about such a system. There must, obviously, be some recourse for people who are gravely hurt, have been treated, and really can't pay the deductible, and indeed for people who just need a prescription medicine and can't afford that. Well, no reason why we can't have one; in fact, of course, we do, and while no one seems willing to say a good word for Medicaid (not the doctors, not the patients, certainly not the pharmacists), at least it's there. If it's inadequate, then beef it up already.
What a stupid idea. This is like having car insurance that doesn't cover oil changes!
Wait, we don't do that...?
I've thought that if we have to have government-provided health care, the best way would be to provide some sort of catastrophic coverage with fairly large deductibles, and let the existing market provide the remainder. The moral hazard isn't as high with health care, because people don't choose to become ill. (Though they do make choices which increase their odds.)
For instance, the USG could offer a plan which would cover most expenses, at the following rates: 0% for the first $7,500/year, 80% for the next $12,500/year, and 100% above that. Reimbursement rates would be based on private insurance rates. Nobody would pay more than $10,000/year for their medical expenses, but the risk of getting stuck with $10,000 in medical bills would act as some check against the moral hazard.
Well said. Government should have a catastrophic plan available to everyone regardless of health status, and the premiums should be higher than similar private plans for healthy people but not outrageously so. So if you have a chronic expensive condition you'll pay more, but you won't go bankrupt. The government plan would still need subsidies because it wouldn't even try to avoid adverse selection, which is fine. It's the same model as food stamps: let the free market work and just help those who need it directly.
And of course we should get rid of the link between employers and health insurance. That will be much easier to do once everyone is guaranteed to be able to get some level of insurance on an individual basis.
/agree.
Medicaid does a pretty good job.
To Freddie, and to all single payer advocates I offer advice to make this happen - do what Canada did. Despite what everyone things, Canada really doesn't have 'national' healthcare. They have provincial healthcare. Yes, the federal government has some overall guidelines (though they didn't in the beginning). But the entire system started when one province created a universal health plan for its residents. People liked it, and other provinces started copying.
So why, in federalist America, can we not do the same? If this is such an obviously good solution, certainly some liberal (relatively small) state could provide a single-payer system and show the rest of the country how good (or bad) it works. I might nominate Oregon, Rhode Island, Connecticut, Vermont... I'm sure there are others.
Is there something preventing this? If there is, how will this be different nationally? And if there are federal laws that make this difficult, wouldn't it be much easier for the Obama administration to focus on removing those barriers to state-run single payer plans.
(Note: I do not want this post to suggest I support or reject single-payer healthcare)
Doesn't Mass. already have something like this?
I agree, let the states decide.
Maybe I'm missing something - I don't understand the argument that the public plan will suffer from adverse selection. If everyone must purchase insurance (which is what most proposals call for and Obama seems to be warming up to) why would the public plan attract a riskier pool of members than private insurers?
Even if there is no requirement to purchase insurance you need to make a stronger case that the public plan would attract less healthy members. If benefits offered are regulated by government, and the public plan truly has a cost advantage then it will be selling the same product as the private insurers (in other words, benefits will be actuarially equivalent betweeen public and private plans) at a lower cost. I think this product would be attractive to both the healthy and unhealthy alike.
Let's enshrine such a minimum guarantee with the knowledge that the minimum can't be everything but must be many things, and do what we do in democracy, hash it out.
I think we need to rephrase that: "Let's enshrine such a minimum guarantee with the knowledge that the minimum can't be everything but lots of politicians will be elected by promising to make it everything by "taxing the rich," and lots of Pulitzers will be won by people dramatizing the fact that it isn't everything, and that any limits we attempt to place on it will gradually be overrun by those same politicians with the support of those journalists."
Nobody--NOBODY--wants to take responsibility for making the hard choices. Nobody really wants to admit there are any hard choices, just "false choices," to use the President's favorite phrase. And even if somebody was actually serious, that guy would just lose his reelection bid anyway because of the twin beliefs I outlined above.
SoV and RW have advocated--rightly--designing a financial system around the assumption that some people will do stupid, irresponsible things, because that's the way the world works. Well, I'm concerned about building a health care system around the assumption that politicians will do stupid, shortsighted, and corrupt things, and voters will lionize them for it, because that's the way the world works.
It wastes *our* money on a bureaucracy that would put the federal government to shame
So on the one hand, evil private insurers only care about profits. On the other hand, they don't mind seeing those profits vastly reduced by a monstrous bureaucracy which is apparently entirely unnecessary. Right.
Our Host wrote:
The current plan in Congress does not give you that option. If you don't have insurance, paid for by you or your employer, you pay a tax set by the government board that will oversee all this. So no opting out by the young and healthy......
This has been described by Keith Hennessey on his blog:
The experience in Mass indicates that a lot of people who "have" to buy insurance, don't--and they're disproportionately young and healthy.
MBP,
Well, it won't, providing that private insurers are mandated to cover everything the public plan does. But the public plan is likely to cover (or at least discount) everything down to the smallest expense. A private plan that had a high deductible and therefore covered only sudden, large financial shocks would attract people who are young, generally healthy, and confident of being able to pay smallish medical bills out of pocket or put them on a credit card, the same way they would buy a new refrigerator if the old one died on them.
The question is whether such plans would be legal, or count as "purchasing insurance" in Obama's terms. As has been pointed out up-thread, some states already demand that all private medical coverage cover a certain bunch of expenses. You might possibly want only catastrophic insurance, preferring to pay a doctor or dentist directly for minor needs, but you may possibly not be allowed to do it.
As has been hashed out over and over again on this site since before Megan joined The Atlantic, if you let the young and healthy buy only the insurance they need, there's no one left to pay for the older and sicker, since they have no intention (and often no ability) to pay for what the current state-of-the-art treatment for the conditions that start to afflict them costs.
So the answer to your question is that any plan that comes up for a vote will probably not involve an adverse selection problem, or at least will have done its best to obliterate it. But if you just let everyone design their own plans, no preconditions, the public plan would lose nearly everyone young and healthy -- so long as they were able to switch plans if/when they got seriously sick.
Michelle - I'm not advocating for a public plan. But i think we should discuss/analyze it on the terms that are likely to be considered by Congress. A public plan is not likely to suffer from adverse selection because Congress wants to force us all to buy coverage. And all plans are likely to be forced to offer an equivalent minimum package of benefits, based on proposals i have seen. Therefore Megan's discussion of adverse selection is not as illuminating as it could be. And your idea for catastrophic coverage is unlikely to qualify as "coverage".
My real point is - there is no possible way to set up a public plan that competes fairly with the private sector. the question isn't whether it needs a subsidy, as Megan asks it. The questions is, is there anyway to prevent the public plan from being subsidized??
My answer is no. It will have a lower cost of capital for starters and may be able to dictate prices paid to providers. Therefore, i see the public plan as eventually taking a majority of the market. And then, since Obama and Congress are unlikely to do anything about slowinbg the growth in spending this time around, the government will use the public plan to exert more control over spending sometime down the road.
All providers will be required to accept the public plan. This alone will provide the government with extraordinary bargaining power - because the only alternative is to leave the field completely.
Remember that Medicare gets away with collecting premiums (i.e., payroll deductions) for upwards of 40 years before spending a dime on health care for most of the people it covers. It's hard to see how this economic model will work for people who expect coverage the moment they begin to pay into the plan.
People need to be absolutely clear what it is they are complaining about when they complain about the rising cost of health insurance. What do you suppose auto insurance rates would look like if your collision coverage promised you a brand spanking new car, one step up from your present model if you totaled it?
What could healthcare dollars purchase 25 years ago? What can they purchase today?
Mark says in part...
"You and I receive our health care coverage from a nameless, faceless corporate bureaucrat in a state we probably don't live in. He or she could care less if we die, but is very concerned about whether his insurance company makes a profit. There is no defense for that stance."
I don't understand why people think a "corporate bureaucrat" doesn't care if we live or die, but a government bureaucrat (the implicit comparison) inherently does. Does anyone who becomes a corporate employee foreit their humanity? Do you understand you are claiming scores of millions of Americans are sociopaths? However did you arrive at this utterly bizarre belief? Why do you feel so comfortable sliming the people responsible for most of the production in this country?
These comments also betray a fundamental inability to understand institutions. Any system dependent on an institution (or the people in it) caring more about you than itself is doomed to failure. This is true no matter the organization type. Anyone who thinks any of your government officials care more about you than they do about themselves is a fool. This is not to criticize them, but to recognize reality. This is a fact we have to live with. Well run institutions recognize this and organize themselves to ensure the interests of the groups align as much as possible. But the idea that this type of problem is unique to corporations is simply wrong. Believers should try to understand why they have been sold such obvious propoganda and what this says about their ability to discern right from wrong.
I believe we were talking about health care here, not widget manufacturing. Private companies have had their chance to provide every American with access to health care and they have failed. We spend more of our own money on health care than any other country, and we have worse outcomes that most of the western world.
The key here is that the government has proven itself capable of setting reimbursement rates and paying for health care with good outcomes that people are by and large happy with it relative to the alternatives offered by the private marketplace. I'd buy into Medicare in a second if I could - my premiums would go down, and I wouldn't have a lifetime maximum that would be quickly exhausted by cancer or a car accident.
Again with "access." Private companies deny nobody "access," they merely decline to give it away for free. Just as private companies selling food, clothing, shelter, transportation, and the other necessities of life. I don't see how you can fault them for that.
Private companies most certainly deny people access. Unlike Medicare, most policies impose a lifetime maximum, for example - and we have no freedom in the present marketplace to buy anything else, not at a price that realistically reflects the likelihood of running up those costs.
There's a reason more than half of American with HIV are on Medicaid - partly it's poverty, but a big chunk of it is the unwillingness of private insurers to cover AIDS drugs.
What's the point of having a health insurance system that bows out when something actually goes wrong?
Cite? The WHO study from 2000 has us as the most expensive AND the most responsive with near best distribution of that responsiveness.
"the overall health status of the US population, as reflected in
variables such as life expectancy and potential years of life lost, appears to rank among the lower third of
OECD countries, despite much higher health expenditure per capita than in any other country."
HEALTH CARE REFORM IN THE UNITED STATES, Carey, Herring, Lenain, Feb 2009.
Americans spend a lot more health care $$$ on Botox and boob jobs than the rest of the world, too.
I advocate the "Rotating Blind Proxy Payment" system, a model in which everyone pays for a different person's insurance every month, never knowing who might be enjoying (or suffering) the company and benefits they've chosen.
We WOULD, however, know who was paying for our insurance on any given month - an item of information easily retrieved via the web. So, for instance, if your insurance carrier refused to pay for your cancer surgery, you could go online in order to ascertain which s.o.b. had denied you the potential of an additional decade with your loved ones . . . "Your insurance proxy partner for the month of April, 2013, is John Richard Birch, 147 Elm Street, Peoria, IL 56789."
This would, of course, eliminate the "lemon problem," as no one would want to risk a close friend or loved one landing on their crappy insurance square in the midst of a critical health event.
Just a thought.
But I think that in many places, at least, the state system is going to find it hard to attract low-cost patients.
Time for a basic economics quiz:
When you subsidize something, you get ____ of it.
This entire system is piece meal. It a recipe for mediocrity at best. Single payer systems work but they inevitably result in the demise of private insurance companies. These insurance companies have plenty of clout and employ plenty of people. Furthermore the employees that have these plans don't want to give them up for a anemic government option of insurance.
The biggest increase in corporate costs is health care. Health care increases are double digit every year. Something is going to give. Companies have to cut back, they do not have a choice. Employees will have to pay more and ultimately if costs continue to increase companies will stop offering health care insurance. It is already happening. As fewer people have employer based insurance and as coverage becomes more expensive, a single payer plan will begin to look much more appealing. Soon we will be at the tipping point.
The United States is under the illusion/delusion that it has the best health care in the world and that its system should not be messed with. That may be true for those who can pay but for most Americans it is a fallacy. We are in love with companies controlling essential services, banking, real estate mortgages, health, food, energy, gasoline etc. After all these companies would never do anything to hurt their business right. Just like cigarette companies would never sell anything that kills off there clients would they. Or bankers would never make ridiculously risky real estate loans. We can trust health insurance companies to do what is best and fairest and most noble for the health of all Americans. They are not like the car companies that had to be forced to put in seat belts and airbags and catalytic converters kicking and screaming all the way.
I think we all agree with your principal: that "every American have access to necessary health care regardless of their financial or employment status." I cannot find one single person, left-wing or right, conservative or liberal, Rep. or Dem., that disagrees with you.
This is a quasi-libertarian blog. You will find no shortage of posters who disagree with that statement, and vigorously so.
I'd be happier with a car insurance model that doesn't put too much interference on the insurers.
And that's a great system, except for people who actually get sick. So it sort of misses the point, unless you earnestly believe that sick people shouldn't have health insurance.
The solutions to this are fairly clear to anyone who puts economic rationality above political ideology. One of the most obvious things to do would be to control the high cost components, such as labor. Labor costs can be controlled by shifting more work onto lower-cost workers (a greater division of labor to pharmacists and nurses, and relatively fewer doctors), by controlling pay and by introducing mechanisms that can reduce some of the costs that may motivate some to seek extraordinarily high pay, such as tuition reimbursement or federal malpractice insurance.
The most expensive component of health care is the payroll. Cut the labor costs, and you can accomplish a lot. If we can do that with blue collar grunts, then we should be able to do this with the educated and one of the most powerful guilds in America, the AMA.
Sounds like a plan. We should do this to teachers as well in order to make education more affordable.
Right?
And we need to do this for attorneys, right? Large numbers of people die without a will because they can't afford one.
And that's a great system, except for people who actually get sick. So it sort of misses the point, unless you earnestly believe that sick people shouldn't have health insurance.
What are you trying to say about the model? People who get in accidents have god-awful coverage?
Labor costs can be controlled by shifting more work onto lower-cost workers (a greater division of labor to pharmacists and nurses, and relatively fewer doctors)
Good point, and easy to address: eliminate requirement that MDs 'supervise' basic medical care that only requires a nurse (or less) to perform. Ease up on licensing.
by introducing mechanisms that can reduce some of the costs that may motivate some to seek extraordinarily high pay, such as tuition reimbursement or federal malpractice insurance.
So by paying their tuition, we'll somehow reduce net costs? Taxpayer subsidized malpractice insurance will reduce net costs? Bizarre-o idea of cost-cutting.
My best RW impression: "Labor costs are the problem, and I'm determined to bring them down no matter what the expense!"
"The United States is under the illusion/delusion that it has the best health care in the world and that its system should not be messed with. That may be true for those who can pay but for most Americans it is a fallacy."
Roughly 12M Americans are chronically without insurance. This is 4% of Americans. Even a 50% increase in this number to allow for the current crisis gets you nowhere near "most".
"We are in love with companies controlling essential services"
No, we recognize that over the long term government control results in worse outcomes.
The relevant statistic being 45.8 million, or 15.7%, uninsured at any time (in 2005, most likely higher now). Non-chronically uninsured individuals don't get their medical bills covered because they had insurance 6 months ago.
Then there is Medicare, 44.7 million, 42.9 million, and the underinsured, 16 million.
Why am I adding Medicare and Medicaid? Because you also said
Well, if you only count the people who are covered by private insurance without government aid, you get 149 million. It's still not "most Americans", but it's pretty close. Granted these numbers can't be simply added up (for instance, there may be many elderly who could afford private insurance and are covered by Medicare), but even if you take 10% to 20% of this number, it still leaves you a lot of people for which the current model doesn't work.
All of these without exactly exceptional results, to put it generously, and the whole thing costs 15% of the GDP, almost 4% more than the second most expensive health care system in the world.
So I'm interested to know what mental gymnastics do you perform to "recognize that over the long term government control results in worse outcomes."
Let me give you an example of 'guvment' in the medical market place. Let's say I have a Medicaid patient. Since I have other patients as well, I probably won't know that that patient has Medicaid. If I decide that Abilify is 'best' for their bipolar or schizophrenic condition, I will prescribe it. If that were prohibited by reason of expense, I might use a relatively cheap older generation 'antipsychotic' and add cyproheptadine which has a serotonin 2 receptor blockade which makes the combination a 'new' atypical.
When I eprescribe Abilify, had they private insurance I might be told that Abilify is not on their formulary, and we thus might move to a cheaper selection. I will not get this notification with the Medicaid patient. Instead, a day or two after sending the Rx, I will get a notice that I have to provide a written Rx since this exceeds the Rx price limit for eprescribed drugs. Furthermore I will have to provide a new Rx in 6 months when I might have been happy with a year f/u in an stable insured patient. The public health plan aims to save money by bureaucratic pain.
We should do this to teachers as well in order to make education more affordable.
We've been slashing wages and benefits across the country. You'll have to enlighten me, but I'm unclear as to why this profession would somehow be immune.
If we can target the cost of union labor, even when the expense load is relatively modest, then surely we should be able to tackle these costs when they really are a substantial burden.
American physicians are among the highest paid in the world, even though our system is largely mediocre. I haven't seen a compelling argument yet that explains why we should pay Cadillac prices for Pontiac outcomes. (And appropriately, Pontiacs are being phased out as we speak.)
Most teachers work for the government. Show me a government worker who has taken a wage cut recently. I suppose perhaps CA, since i think they are required to take unpaid furlough days due to their budget crisis. But in general wages and jobs in government have been immune from reduction or elimination during this downturn.
I agree that US docs are best paid in the world. But how will we cut their pay by 30% (assuming Medicare rates) at the same time that we ask them to provide healthcare to millions more people who are currently uninsured? Pay docs less and we will get fewer docs, exactly when we need more.
I'm just pointing out an inconsistency in standard liberal ideology. Low pay causes teachers to be of low quality, but the same won't happen with doctors?
By the way, we pay Cadillac prices for Cadillac levels of treatment. Treatment bears almost no relation to outcomes, so I'm not sure why you bring outcomes into the discussion.
Incidentally, we can target the cost of union labor because unions extract above-market prices for their services. We can pay them anything between market wage and their current wages, and union employees will stick around. The same is true of any monopoly.
RW, I'm a libertarian, and I don't disagree that "all Americans should have access to quality health care." The emphasis is on "access." There's no law preventing people from purchasing insurance, and there's no shortage of quality care for purchasing. What mediates it is ability to pay, and there's the rub (and therefore the debate).
Where we libertarians are likely to dissent is when you make it my "right" -- backed up by government force -- to steal other people's earnings to pay for my own health care. What someone like Nozick might say is that, on the macro level, as you expand government interventionism more and more, at a certain point the marginal costs to individual rights get too high (to say nothing about the quality and quantity of the government-rationed care itself). Tragically, this means that some people will go uncovered -- as is the case with many of the young, immigrants, and slightly-too-wealthy-for-Medicaid in the US today. But that doesn't mean that the point of limiting government was to hurt those people. This is the tragic reality of a world of unlimited needs and limited resources, no different in economic terms than the fact that my old truck (which is on its last legs) may break down at any time but I can't afford a new one --and have no "right" to expect the government to force you to buy me a new one: a bad situation with no easy solution that doesn't create other problems.
I was making a distinction between the moral and practical aspects of this problem. The debate should be framed in empirical terms, weighing the pros and cons of this system vs. that system. A lot of people, however, are intent on pretending it to be a moral issue analogous to abortion or capital punishment, but that would only be valid if you could find a sizeable faction out there that actively "wants" people to not have access to care. As it turns out, this faction doesn't exist, because (and I'll say it again) believing that the pros and cons of the private sector lead to better results than the pros and cons of government-provided care does NOT mean that you desire people to go untreated.
When people imply otherwise, it's a red herring designed to appeal to emotions so "compassionate" people will vote to relinquish more control and power (and money) to politicians and other non-productive parts of the economy. By converting what should be an empirical debate into a moral one, we are prevented from hammering out an effective consensus on how best to reduce the number of people who can't/won't purchase their own insurance.
To illustrate with a very crude, off-the-top-of-my-head example: we are both hungry for a burger, and you say that the best way to the In-N-Out Burger is down Wilshire (a practical point about the most effective way of achieving our shared goal). I believe the best way is to go down Santa Monica Blvd, but instead of arguing why this would be a better, quicker route, I accuse you of wanting to go down Wilshire only because you hate gay people and want to avoid West Hollywood (a non-sequitor that changes a debate over method into a moral one about your character). Then we begin arguing about whether or not you are actually a homophobe. In the end, we both go without food.
We've been slashing wages and benefits across the country.
"We"? Has the government been strong-arming companies (other than TARP recipients, I mean) to slash wages and benefits?
You'll have to enlighten me, but I'm unclear as to why this profession would somehow be immune.
It isn't, is it? Existing insurance providers could cut reimbursements anytime they like, right? Which would of course force wages downward, while improving insurance company profits and allowing them to lower premiums somewhat.
If that's not happening, it suggests that we have found the market-clearing price, and it's pretty high (not surprising given the considerable human capital involved and the scarcity of people with the brains and training to be doctors.) But then the only way to achieve the labor cost reductions you suggest would seem to be price controls or some kind of monopsony arrangement. Neither is normally considered to be a good idea.
This would be surprising. The U.S. has the best paid doctors in the world relatively to country average income. Of course, other countries' doctors also have a very long and expensive training.
It frustrates me to no end that I can't find this, but I saw - about a year ago - a fairly thorough comparison of physician income around the world. The US did top the list, but not by much when compared to other countries with similar roles: physicians make less in countries where they are government employees, more in those in which they are expected to deal with running an office themselves. We also have a longer and much more expensive - to the student - course of medical education - most countries require six years of postsecondary education, at no or minimal tuition charge, prior to getting paid, while most Americans pay for four years of college and four years of medical school (the latter often costing $100k just for tuition at public medical schools) prior to earning a salary.
That sounds about right - there are pretty high barriers to enter medical school. I'm not sure about the six years in other countries, though. In most European countries I know (Spain, France, Portugal, Holland), you're required you have a model of 4 years college + 2 years working in an hospital in general medicine + 4 years specialization (or, I think, about half of that if you want to be a general practitioner). But yeah, it's all subsidized.
In the rest of the world you don't make the kind of money you do here, but you're also not buried in debt until you're 40. Taxpayers pay for medical education but and pay less for treatment later. It's all pretty much the same, except that in the U.S. patients also have to pay for the interest on the loans of medical students, which kind of sucks.
This is reply to you, Nimed; the European countries enter medical school directly out of high school and receive, generally, a bachelor's (or possibly master's) degree in medicine at the completion of the education unless they have chosen to do a thesis to receive the MD (in at least some of these countries, the MD is an academic degree only; the bachelor's or master's degree in medicine is sufficient to practice).
My point is that postsecondary education generally takes six years to produce a physician ready to pursue specialist training (and therefore earn a salary) vs eight years in the US, with a generally longer course of postgraduate training - totally independent, consultant-level practice is achieved at roughly the same age under both systems, but the Europeans have minimal debt and have been earning at least a modest salary for several years before Americans. They also have the possibility of living in university housing before the completion of medical school, something that isn't on offer at any American med school I know of.
It was a few years back, but I knew law students, aged 23-24, from respectable but not top-ten schools who were earning during summer internships roughly as much per month as I did as a senior resident, age 30.
Handouts didn't work for the auto industry and they won't work for healthcare.
We can't subsidize some crooked insurance company executives.
We need a two-tier heathcare system:
1) a public tier, where certain services are guaranteed for all citizens, and all citizens must participate.
2) a private tier, with supplementary insurance policies to pay for elective, experimental, and other treatments. The private system can exist outside, or in parallel to, the public system.
This is the system in Britain, France, Denmark, the Netherlands, Germany, Switzerland, and Singapore.
It's time for the United States to catch up with the rest of the world. The Singapore system is best.
You're right - what works in a small, homogeneous, authoritarian island state will definitely scale up to the US.
Of course, other countries' doctors also have a very long and expensive training.
True, but many of them subsidize that training more heavily than we do, so that there are no student loans to pay off. That is, part of their "health care" budget shows up in their education budget. RW suggests that we try the same approach upthread. It's an indirect form of subsidy.
As to whether we have found a market-clearing rate, any hospital can cut salaries, and any insurance company can cut reimbursements. Nothing is stopping them except the threat of doctors leaving. That sounds to me like a good path to price discovery.
I suppose there may be some price reductions to be made by increasing doctor supply (say, building more med schools, easing up on licensing rules), but I must say that it is far from obvious to me that this will actually result in better care. There are only so many people in the world actually smart enough to be good doctors, and lowering their wages might encourage the smartest to seek other opportunities.
Once again, I'm snarked at and derided-- and yet, my side is winning. Universal health care is coming to this country, and you can't stop it.
Freddie, If you'll look at my comment at 5:51 above, I think you will get some idea of the problems of 'winning.' One of the reasons I voted for McCain is that I thought the price mechanism was a better way to distribute benefit. He called for a $15,000 tax credit or voucher if you will for the purpose of buying insurance. The company that would figure that they can deny Abilify as part of the formulary but allow the other Rx I mention would provide a cost effective benefit. As my comment and the next suggest, your 'winning' amounts to kick the doctors. What you 'win' in such a plan is psychic income, not efficient healthcare.
But then the only way to achieve the labor cost reductions you suggest would seem to be price controls or some kind of monopsony arrangement.
That's not an uncommon arrangement in nations that secure lower costs, provide greater access and deliver better results.
there's no shortage of quality care for purchasing
Sure there is. Try getting insurance with pre-existing conditions. Some can't be insured at any price.
we can target the cost of union labor because unions extract above-market prices for their services.
In a market system, buyers and sellers negotiate. Labor wages aren't above-market, but reflect the benefits of superior negotiation leverage.
You're showing your biases when you begrudge one party's negotiation effort while accepting it from others. You just don't like the idea of blue-collar workers negotiating; I suppose that they should be quiet and know their place.
In a market system, buyers and sellers negotiate. Labor wages aren't above-market, but reflect the benefits of superior negotiation leverage.
Huh? The fact that labor laws exist is enough to demonstrate that it's not a free labor market. If the laws requiring employers to deal with unions don't result in higher (nominal) wages than would otherwise exist (read the market price for labor), then what would be the point? I suspect even most economists who are in favor of unions wouldn't argue that that they don't extract above-market prices.
That depends on your definition of market. Should threatening to fire or otherwise intimidating a worker acceptable market bargaining? It comes awfully close to the supreme libertarian rule of "no coercion". It doesn't exactly break it, because there's no use of force, but it's pretty close.
Most of the times, it's in the worker's self-interest to join a union, because he's stands to gain a bigger paycheck. If the worker doesn't join a union in spite of this, it's likely because he's either ideologically against unions, and his ideology makes him act against his self-interest, or he his intimidated by the employer.
Also, I invite Rob Lyman: tell me what you would say to a sick American who is incapable of getting adequate health care. What would you, Rob Lyman, if you looked a sick, uninsured person in the face, tell them to do? You're so sure, Rob, about the deficiencies in everyone else's worldview, and yet you never actually have to confront the victims of your proposals. So I would love to see you have the guts to tell someone who is in pain and lacks the resources to get themselves out of that pain, "Sorry! I don't want you to have health care. Too complicated. Too costly." But of course you won't, none of you will. You'll hide in comments sections, behind anonymity and distance, and drop your snark and your derision for people who have committed the sins of being poor and sick. You have no actual stake in their lives, you take no risk in saying what you're saying, your position is entirely intellectual. You're cowards, all of you, and I think you know it.
So, Freddie, do you donate all your spare income to pay for other's healthcare? If not, then you need to get down off that high horse before you fall on your ass.
your position is entirely intellectual
God forbid. Wow, you really are an infant.
Freddie, I suspect I agree with your position in this and, for what I've read, most other issues. But is this really necessary? You're snarked at and derided because this is a libertarian (or libertarian leaning) blog and you tend to have a pretty vehement writing style. As to "my side is winning/ you can't stop it", do you remember how much you loved to hear that argument when Bush was in office?
There's no lack of good political and/or economic blogs out there that share your (our) views. I don't know why you read and comment here, but I presume it is to expose yourself to, and discuss the opinions of, reasonable people who don't agree with you. That, and because libertarians are usually much more sensible people than your regular insufferable self-proclaimed conservative.
Just as coward as people who eat beef but are not willing to kill a cow themselves, or are in favor of the wars but would rather not fight them personally. Personally I'm against the war, love beef and I'm for universal health care. Sometimes it's a bit disturbing to see people casually defend care denial to the destitute. Oh Jesus, I just remembered the latest torture/foreign policy posts. There were some f-ing ridiculous comments on those ones. God damn, the sheer amount of crap on those threads.
Anyway, what I'm saying is that you should be able to make you case without calling people cowards or otherwise insult commenters. Except if you are in a torture of foreign policy thread. Or... hmm... if you happen to be arguing with TallDave. Ok, but just in these cases, and no others. Certainly not in this case.
I had a point here, but I lost it. I'll just finish by saying there were some unbelievably stupid commenters in those torture and foreign policy threads. If those guys didn't deserve to be insulted, no one does.
Freddie, I'm sure your intentions are good, but you need to get past the idea that you can solve the human condition with policy prescriptions. Neither you nor single-payer healthcare is going to forestall suffering.
Someone like, say, Mother Theresa gave all of a very long lifetime over to the poor, and yet the poor remain among us. However, a good many people were made better by her personal intermediation in their lives, and therein was a difference made. If you're looking for an unfulfilled niche, start with your next door neighbor and move outward from there, one person at a time, and help those you can while accepting that many will remain beyond your reach. It would make the world a far better place than showing up on commment forums calling people "cowards" for recognizing the simple and irrevocable fact that there are not unlimited resources available to solve any problem you can identify.
Freddie, drop the drama queen schtick, for heaven's sake. You've been asked perfectly fair questions, and your answer is misdirection a la Goulsbee and GM. Pathos is not a substitute for policy.
What I would tell a sick person getting "inadequate" care depends rather strongly on what they have and what you mean by "inadequate." If we're talking about somebody who will die because he can't come up with enough money for tea and a slice, why, I'd hand him 5 bucks. If we're talking about somebody with a bum hip who who wishes he could afford a new one but can't, I'd tell him "too bad." If we're talking about somebody with non-Hodgkins lymphoma who doesn't have the $25k or so that the new monoclinal antibodies cost, I'd tell him to mortgage everything he had to pay for it and work to pay it off later. How much is your life worth?
I fail to see what is wrong with expecting individuals to pay for their own needs, including health care (supplemented by appropriate insurance). And I'm open to the idea of a public catastrophic high-deductible plan, given that most people lack the foresight to buy any sort of insurance except when somebody else makes them. But the current "give me top notch care for free" expectation that you're pushing as a moral right is a recipe for disaster.
Try getting insurance with pre-existing conditions. Some can't be insured at any price.
It's strange how you can't buy money for less than face value, isn't it?
"If we're talking about somebody with non-Hodgkins lymphoma who doesn't have the $25k or so that the new monoclinal antibodies cost, I'd tell him to mortgage everything he had to pay for it and work to pay it off later. How much is your life worth?"
Wow. So you do think people who have cancer should go bankrupt!
Actually, I think it would be nice if nobody ever got cancer. That's a nice thought, but nice thoughts are unable to prevent it from occurring, and when it occurs, nice thoughts are unable to pay for a treatment regime that might send it into remission. At that point, the money has to come from somewhere. Is there any good reason the afflicted party should not turn in at least a sizeable portion of his fungible assets before requesting that everyone else turn in theirs?
You seem to be arguing against the concept of insurance.
Not really. Insurance, properly structured and defined as insurance, is a perfectly acceptable transaction to engage in a small forfeiture of assets now, in exchange for protection against the small but extenuating possibility of a large forfeiture of assets later. AIG's trading shenanigans and the convoluted state of healthcare notwithstanding, insurance was first produced by the private market and has been pretty good at finding ways to turn smaller individual contributions into a viable pool of investments and redistribution to payout recipients.
Insurance, defined as some large and vague, indemnifying benefit everyone is entitled to, is not insurance at all, it is a welfare program. Indemnity welfare may be a fine social goal, but at that point the question of "Your money first, then mine" is legitimately raised. Is a hungry man entitled to food aid if he has, say, a $3500 entertainment system gracing his living room? If not, why would healthcare be more exceptional than food?
Given the choice between bankruptcy and death, I personally choose bankruptcy. YMMV.
Logical fallacy: False dilemma.
I am insured and when I was starting cancer treatment, the hospital social workers were falling over themselves trying to arrange charity care for me, that I didn't need. Why assume you have to go BK? Talk to the disease association and the hospital social workers and the public health department. And you can negotiate with hospitals and providers. Never pay retail. Y'all give up too easy.
Freddie: ...my side is winning. Universal health care is coming to this country, and you can't stop it.
A very eloquent and persuasive argument for the superiority of public healthcare! Covers all the bases: how to pay for it, how it would work, and who would run it! And answers all the naysaying and doubts about quality and rationing, etc. I don't see what there is left to talk about.
You have no actual stake in their lives, you take no risk in saying what you're saying, your position is entirely intellectual. You're cowards, all of you, and I think you know it.
It really does take a lot of courage to advocate for the completely politically correct position, to err on the side of pretending that there are no costs and that we could all have everything for nothing. What's easy and cowardly is to take the unpopular position that, as much as we may hate it, TANSTAAFL. And it's AWESOME to be accused at every turn of wanting sick people to die. No wonder it's so easy to get elected by reminding voters that they can't have something for nothing, and so hard to get elected by promising them more and more of stuff paid for by someone else (the "rich").
I refer you to the old PJ O'Rourke bit about Santa Claus vs. God:
God is an elderly or, at any rate, middle aged male, a stern fellow, patriarchal rather than paternal and a great believer in rules and regulations. He holds men accountable for their actions. He has little apparent concern for the material well being of the disadvantaged. He is politically connected, socially powerful and holds the mortgage on literally everything in the world. God is difficult. God is unsentimental. It is very hard to get into God's heavenly country club.
Santa Claus is another matter. He's cute. He's nonthreatening. He's always cheerful. And he loves animals. He may know who's been naughty and who's been nice, but he never does anything about it. He gives everyone everything they want without the thought of quid pro quo. He works hard for charities, and he's famously generous to the poor. Santa Claus is preferable to God in every way but one: There is no such thing as Santa Claus.
The reason you're being accused of wanting sick people to die is that you are defending the American private medical system: high costs, poor outcomes, and poor people dying of preventable diseases.
You call yourself a libertarian, and your complaints are typical of your ilk: you are defending unfettered capitalism against all of us weak-brained socialists. But as a group, libertarians didn't stand up against any of Bush's wild spending and money-printing, or his destruction of our civil liberties, or his corruption of the marketplace. So now your viewpoint is extremely unpopular because the people you aligned yourselves with disgraced themselves and wrecked no end of American institutions. The rest of the country is in no mood to go back to the gold standard or have a flat income tax or introduce "true, unfettered capitalism." In fact, the country wants a little empathy for its citizens, which is why universal health coverage is so popular.
Actually, there is. Saint Nicholas of Myra was a fourth century bishop honored in both the Eastern and Western churches. He gave away his family wealth to the poor. He left gold coins in hung up laundry (stockings) so poor families wouldn't have to sell their daughters into prostitution. He was beloved of the people.
The key is, he gave away his wealth voluntarily. The government didn't take it from him by force and give it to other people.
So the "real" Santa Claus wouldn't be on the side of forced government redistribution efforts. Just sayin'.
Freddie: "...my side is winning. Universal health care is coming to this country, and you can't stop it."
Get used to this attitude, people. "Your treatment is denied, and there's nothing you can do about it." Let the rationing begin.
I owe my life to not being on UKNHS.
It's strange how you can't buy money for less than face value, isn't it?
You're absolutely right about that.
This actually illustrates the problem. The person who needs care can't get it because there is no economic benefit in providing it to him. If the goal is to provide resources to those who need them, that isn't a very sensible model.
There just isn't any free market logic that works here. The poster Melwrc above described the economic problem quite well -- the path to returns comes from denying and stalling payment, and by avoiding selling policies to sick people.
We have to decide what we want. If we want universal care, then it won't work with a purely private system, because it doesn't make any economic sense. If we reject a universal care system, then we need to accept that some people will not receive the help that they need.
The question with a private system is one of how many will be denied car and to what extent, not one of whether it will happen. Some denial of service is inevitable.
RW, well said. On the fundamentals, I agree with everything you've said here. The next step is to acknowledge that there are tradeoffs in adopting a universal system (flexibility, rationing, innovation are big ones). Then we can begin a truly constructive debate and start to fix our very messed-up system.
RW,
"We need to accept that some people will not receive the help that they need" regardless of what system we choose, do we not?
Yancey, not necessarily. We could cover 100% of everybody if we settled for very crappy universal service. But you're probably right in the broader sense.
Grundles,
Just because one has insurance doesn't mean he will get what he needs, it just means he gets what the system will provide.
The fact that labor laws exist is enough to demonstrate that it's not a free labor market
We have plenty o' laws regulating medicine. Yet you're trying to argue that the heavily licensed and regulated medical industry is some anarcho-capitalistic gem while unions just ruin everything?
Please, you guys should at least attempt to be consistent. If you don't like regulated markets, then you should be just as belligerent about the AMA as you are about the UAW. Both groups seek to protect the veteran members, support their incomes and create barriers to entry in the supply pool. Same stuff, different industry -- the only real difference here is your attitude about it.
We have plenty o' laws regulating medicine. Yet you're trying to argue that the heavily licensed and regulated medical industry is some anarcho-capitalistic gem while unions just ruin everything?
Why, no, I'm not trying to argue that at all. Of course medicine is heavily regulated. In fact, I think the only point I made above argued that it be less so. Certainly never held it up as any "anarcho-capitalist gem." Confusing me with someone else?
Who are "you guys"? Not quite sure where I have been inconsistent. Criticizing national health care is not tantamount to endorsing the present system.
RW,
The supposed guild-like nature of the AMA is part-and-parcel of the libertarian critique of US health care, along with the "over-regulation" of the FDA. If you're unaware of that, methinks you don't spend enough time in the blogosphere.
As for barriers to entry, if the AMA is so powerful, why are there so many foreign-trained doctors in the US? Are they not powerful enough to prevent this intrusion into their labor market?
Any comment about the AMA is entirely useful, Klug, as it reveals that the speaker is repeating things they've heard rather than being intimately acquainted with the situation. (I'm not dogging on anyone who does so; you can't afford to be really well informed on every subject, and it is a very plausible idea until you realize it's wrong.)
The AMA speaks for relatively few physicians in the US (only about 25% are members, last I checked), does essentially nothing to prevent foreign doctors from coming here, and absolutely does not prevent Americans from going to medical school anywhere on Earth they choose.
The chokepoint for doctors is at the residency level. If you want a residency in psychiatry, you can get one with a third-world medical degree and a minimal command of English - because the field has a large number of low-paying institutional jobs, and the Powers That Be have authorized plenty of residency spots to make sure they can be filled. By comparison, orthopedic surgery requires extraordinary medical school grades and test scores to get into, yet its practitioners often joke that it's high-paid carpentry. Why is it hard to get into? Because many more graduating physicians want to do it than there are residency spots to do it. New residency spots are restricted to keep the supply low.
My specialty, anesthesiology, is a textbook example of supply and demand. In the 1990s, there was a strong concern (inspired by Hillarycare) that the government would establish a universal coverage scheme that would declare nurse anesthetists equivalent to physician anesthesiologists, and that there would therefore be no jobs in the future. At the nadir of this trend (1998), there were only 89 US medical school seniors who applied for the residency match in anesthesiology, out of almost 1200 training spots. Obviously, those few could choose almost any program they wanted.
In short, job prospects are a huge matter of concern to senior medical students looking at specialty training, and the prospect of working for the same amount of money (or only slightly more) than you would have gotten had you gotten a job straight out of college and enjoyed your twenties (and the income) instead of spending them in a hospital is not a happy one.
Devilbunny: Thanks! So to clarify, who ARE the Powers That Be? I suspect that teaching hospital adminstrators are some of the culprits, but what do you think?
yet its practitioners often joke that it's high-paid carpentry.
When I shadowed a pediatrician as an undergrad, he told me that to be an orthopedic surgeon, you needed to be "strong as an ox and twice as smart." I thought that was funny. Now I'm an organic chemist -- and I think ours is the field that gets those jokes!
Clinical Psychiatry News announced that there were 9000 slots in psychiatry here, 99% filled; I believe half with foreign medical graduates. The theory on the ortho slots is that, like Singapore does with it's postgraduate slots, the politically appointed board decides what the need will be and provides the slots that would meet but not exceed that need. The benefit to society is supposed to be that the ortho doctors need sufficient volume to keep up their skills. Lower their volume and the skill delivered goes down.
Klug: the various Residency Review Committees approve the slots, while funding comes primarily from Medicare.
The next step is to acknowledge that there are tradeoffs in adopting a universal system (flexibility, rationing, innovation are big ones).
Undoubtedly true. There is no free lunch. Both sides have a tendency to pretend that there is, when no system will be free of flaws.
That being said, some lunches are cheaper and tastier than others. I'm not pleased with what is currently on the menu.
"... it's an empirical question though ..."
Yeah, so -- especially as to cutting administrative costs, all that needless screening, which is supposed to produce all those savings -- we should look at currently existing actual government run health care in action.
First do no harm, right? When the government shows it can control costs in its existing programs better than this, we might consider the idea, eh?
Before constructing fantasies of what gov't run health care would be like, let's consider what it is like.
Your link says that the inefficiencies of the NY State health care system consisted in covering people who were no longer residents. Somehow, I don't think this would be a big problem with a federal program.
Yes, let's consider how this fantasies work out in the rest of the civilized world. Look, it's way cheaper! With comparable results! And it covers everybody!
Aahhh, forget it. We're too special to achieve that kind of results...
Special? Sure. The U.S. has a disproportionate rate of serious physical trauma (we're more violent and we drive more miles in cars, thus getting in more accidents). Why does that matter?
First, physical trauma is itself a cause of health care costs. No national health plan is likely to reduce those rates to, say, British levels. Shall we reduce spending on emergency services and rehabilitation of survivors to British levels anyway?
Second, normalized for rates of physical trauma, Americans actually do have the longest life expectancy of any OECD country. Sure, we pay more . . . but we actually do get superior results. So, how much life expectancy should the government force Americans to sacrifice in the name of cost-cutting?
God, why?
Lunatic, I'd normally call that bulls**t in a short post, and that I'd find it hard to believe that physical trauma could have to much influence. But this argument in particular comes up so many times that I'll address it now. Hopefully it can be linked to later when others make the same argument.
So, let's look at 2006 data for this:
Total deaths in the U.S. 2006 - 2,426,263
Deaths by assault - 18,573
Motor vehicle deaths - 47,000 (source)
Now, adding the by far 2 leading causes of death by physical trauma, we get ~65.6 thousand people per year. That's 2.66% of the total number of deaths.
But the average age of death of these people is relatively low, right? Well, let's suppose that they age at the tender age of... zero years old. They are born, and they immediately get shot or drive a car into a tree at 80 miles an hour.
In that case, the U.S. life expectancy excluding these deaths gets a 2.13 year boost, from 78.06 to 80.19 years. This would place the U.S. as 11th in the world in longevity, between Canada and Italy (2008 estimates).
So, assuming that people in the U.S. die from physical trauma at birth and excluding these deaths from the population while not discounting deaths by physical trauma for other countries doesn't even put the U.S. in the top 10 in longevity. This is not exactly "the longest life expectancy of any OECD country".
Let's assume that the average age of death by physical trauma is instead the more plausible figure of 30 years old. I have no idea what the actual figure is, but 30 sounds ok. Shall we do some basic math?
0.934*x + .0266*30=78.06 x= 79.37
The U.S. now jumps from 30th to 18th, between Greece and Austria.
I'm still not excluding physical trauma from other countries, (that would take far more work that I'm willing to do, really). But we have seen that the U.S. gains 1.31 years in life expectancy by these exclusion, assuming these people die at 30 on average. Let's say that all other countries, if they do the same, increase their figures for 6 months. This is less than half the reduction I'm assuming for the U.S., which should comfortably allow for countries with less homicides and (especially) safer drivers. If we do this, the U.S. moves just 4 places in the ranking to 26th in the world, between Belgium and the U.K.
So much for the argument of reckless, dangerous Americans driving fast and shooting people. Yet we see this argument repeated many time in the media. The disinformation, of course, is bound to be amplified in blogs.
RW,
I'd really like to know why you find these people so sympathetic?
http://nymag.com/news/features/29723/
In reality nothing has done more to undermine my support for universal insurance than that article. I suggest you read it.
Wow. Although I assume that the subjects are cherry-picked for unsympatheticness (is that a word?), it's still pretty remarkable.
Klug,
No, I actually think the author thought they were sympathetic.
RW,
Long story short if you want to sell universal insurance you need to sell it not as helping the disadvantaged (conservatives will never go for that) - but, as forcing Williamsburg hipster douche-bags to spend their PBR money on health insurance.
And the beauty of it is, you get do both with one policy!
RW and Freddie - is everyone entitled to this care? Or just those that can afford the supplemental insurance?
RW,
But what you actually said was that some people can't get insurance at any price. I doubt that's literally true. It's just that no insurer is going to accept (say) $10K/yr when the guaranteed cost of care is $40K/yr [and up, no one knows how much]. At the point you need the money, of course you're "uninsurable." You don't at that point want "insurance"; you want to pay a small fraction of cost for your certain medical care, and are irritated when someone protests that it doesn't look like a terribly good deal from his side of the street.
This is why we need universal (at least, as universal as possible) catastrophic insurance -- so that people can't get stuck so thoroughly in this bind. And we need to define "catastrophic" in such a way that it includes diseases that are chronic and continually expensive as well as sudden, one-time injuries.
I, for one, have no objection at all to the government running an insurance system against catastrophic illness -- and providing it free to those who demonstrably can't pay for it.
But as for lesser expenses, and especially regular ones, I don't see why they need to be "insured" at all. Again, if you really need medical care and can't pay for it, there's Medicaid. If you really need medical care and can pay for it, you have lots of options.
Nimed,
Exactly! Freddie & Co. have convinced everyone that agrees with them, they now need to convince the rest of America. One way to do that is to concentrate on the 1/3 of the uninsured that make more than 50k and the 1/6 who make more than 75k.
If Freddie paraded some 60k a year Brooklyn/Cap Hill/JP/Misson/WeHo hipster bartender and said that he should be forced to buy heath insurance - many conservatives would be lining up to force him to do just that. In fact, I bet many conservatives would be willing to subsidise insurance for the low income, as long as they were sure liberal hipster douche was made to pay.
Why they don't use this technique, I will never know.
Nonsense. This applies only to a competitive market. Once workers unionize, the market for labor ceases to be competitive. It becomes illegal to purchase labor from competing suppliers.
Nonsense. When did I ever accept monopolistic behavior in other markets? For the record, the same thing I said about union labor is true about any good provided by a monopoly. This includes sugar, cable TV, M$ Windows, etc.
Most of the times, switching costs in union-employee negotiations are high enough to make it a bilateral monopoly, which works with very different rules than a normal monopoly.
That depends on your definition of market. Should threatening to switch from Windows to OS X or simply do without be acceptable market bargaining? It comes awfully close to the supreme libertarian rule of "no coercion". It doesn't exactly break it, because there's no use of force, but it's pretty close.
Don't be a smartass. You force me to point out that there's no such thing as coercion of objects (or operating systems), and I'm sure you were smart enough to figure that out on your own.
Don't be a smartass. You force me to point out that there's no such thing as coercion of an hour of labor, and I'm sure you were smart enough to figure that out on your own.
This is a false assertion. There is such a thing as "coercion of an hour of labor". People call it forced labor, you might have heard of it. On the other hand, you can't force an object to do something involuntarily, because objects lack a will.
But you see, here I'm being a smartass, because I'm telling you something that, while addressing you reply in strict terms, it's completely irrelevant to your point.
Now, I told you that "threatening to fire or otherwise intimidating a worker" comes awfully close to breaking the rule of no coercion. While there's no use of force, in the real world negotiations between a worker and its employer are frequently extremely unbalanced. The worker stands to lose his income and the ability to support himself and his family. The employer stands to lose a worker, which very rarely is essential to a business. The ability to join a union corrects this imbalance by increasing the worker's bargaining power. Labor laws transform what is frequently a de facto monopoly market (because of the often prohibitive costs of switching jobs) into a dual monopoly.
Many of you here have repeatedly argued for a choice in schools -- vouchers for opting out of the government-run schools.
If we don't have the courage to disconnect jobs from insurance, removing that boondoggle off the shoulders of employers, at least giving people the option for a not-for-profit insurance seems reasonable. Because my experience is that the profit-motive and good insurance are a constant conflict that puts me on the short end of the stick. I'd really like to see those profits go to more health care.
zic,
So, I'll say it again. 40% of the private health insurance provided in the US is provided by non-profit insurance companies. Ever hear of Blue Cross or Kaiser Permanente? They are non-profits.
Such plans are not available to all consumers. They certainly aren't for me; I have one choice. And it leaves a lot to be desired; rationing my health care while not ever having paid a single penny for it.
They have no problems taking our payments; they have a big problem with paying.
Um... if the alternative is having the govenrment control these, then YES! I am most emphatically in favor of companies cnotrolling them. Though they don't actually control them, they provide them for a price. In a market regulated by the government.
One thing that has been mentioned but I want to emphasize is that what we all "health insurance" is not insurance. It would be a lot more sensible to discuss insurance, as in a plan that people pay into to provide money in the case of unexpected and high medical bills, separately from this "health maintenance plan" thing we have where you pay a monthly fee and it covers routine care and minor costs.
Anyone with a long-term condition is most likely the victim of a "catastrophic unexpected high cost" condition that would be covered by insurance (though congenital problems may happen before someone can effectively have insurance.
I would love to see a market for catastrophic insurance, health savings plans for routine care, and maybe government subsidies for people with conditions that are long-term and too expensive for anyone to pay for. The latter category could have a sliding deductible that depends on ability to pay. Right now we mix all three of these categories up into one thing and then try to regulate it as one thing.
RW: I agree entirely with the caveat that "universal" care will also result in denial of care, albeit on different grounds.
And I join MDT in thinking that universal high-deductible catastrophic care makes substantial sense (few people will buy it for themselves, so we might as well pay for it with a rational tax rather than a random system as we currently have). I also really want to break the American habit of thinking that routine medical care should be free. If we hope to rationalize the system, the first thing we need to do is think rationally about it rather than treat it as some kind of golden goose.
It's an uphill battle, one that I'm still trying to explain to my sister in the dental industry. She thinks it's horrible that my company doesn't have dental insurance to pay for my routine cleanings. I try to explain that I do have dental insurance, in that I have coverage to offset the cost of unexpected events. Meanwhile, routine cleanings are coming around twice a year and are a normal item I should budget for just like toothpaste, and therefore "insurance" coverage would be akin to hiring a personal accountant who would, one way or another, take enough money from me to cover said routine services and pay for his services.
I don't think she quite understands the concept yet, but I have high hopes.
Guys, there's a whole world out there. In that world, health care is close to universal, and people think of it as, well, not free, but also not something that might bankrupt them if they are unlucky. Or even if they make bad decisions.
And by "world" I presume you include e.g. Africa, India, and the whole of China, comprising over 1/3 of the world's population?
Or we can delimit that to western-oriented nations, and then sure, it's true(r). But that means there's Cuba's healthcare, which gets good outcomes that may or may not be abbetted by a temperate climate, reduced access to the global processed foods industry, and government opacity, plus the quality and cleanliness of the facilities themselves would be scandalous in the US. And then there's the UK/Canadian option, which is essentially modern, but sparse in that it holds costs by rationing care and cutting you off after your threescore and ten (and, in the case of Toronto, had difficulty adequately addressing a pandemic condition).
And then there's the continental European systems, which seem to be fairly balanced but are also somewhat limited in their broader lessons by having largely homogenous populations and having arisen and succeeded in a bare template form from the 1940s, during the same time period in which US healthcare was evolving into the employer-tangled mess that it is today.
And so forth. Lots of different quality and outcomes, and lots of different attitudes toward the value of paying high taxes for high levels of public services. Just because the "rest of the world" has some sort of social healthcare option does not mean the results are comparable to each other, or that we would get comparable results here. Plus we have Medicare, Medicaid, VA, and several universal healthcare attempts by states, to provide lessons on how the Grand Experiment might turn out when applied here, and so far the results are very mixed.
Mouse,
It's even worse than that. I have a friend who got laid off from her job as an accountant and got an offer for a one year contract job paying $90/hr. She wasn't sure if she wanted to take it since it didn't come with benefits. I'm like, "They are paying you 2x as much as you were making, you are currently unemployed, you live in Mass - just pay the $400 a month." But, to her, the whole concept of even having to buy her own insurance out of her more than comfortable income was difficult to understand. She felt much more comfortable when it was provided "free" by her previous employer.
It's quite a strange realization. I left one company with an insurance plan for another one that didn't have one, but paid twice as much. Naturally I was more than happy to pay the $3500 a year (at the time, now its about $5k) in premiums.
Now the company I work for has a company plan and offered for me to enroll in their plan for $9k a year in premiums. They thought it was strange that I turned down "the company" plan.
So apparently there is a strange attitude toward job-insurance that the country has to get over.
Guys, there's a whole world out there.
True; one which depends to a greater or lesser degree on the US for physical security, financial stability (oops! bad bet there), medical innovation, etc. Much of the rest of the world can be the rest of the world because the US is the US. We can't hope to just copy them and have everything be OK. Experiments in reforming health care in places like Tennessee and Massachusetts have not gone as proponents claimed; I hesitate to jump right in with both feet.
But what you actually said was that some people can't get insurance at any price. I doubt that's literally true. It's just that no insurer is going to accept (say) $10K/yr when the guaranteed cost of care is $40K/yr [and up, no one knows how much]. At the point you need the money, of course you're "uninsurable."
You're being just a tad pedantic, don't ya think?
Here's the point -- if you're sick and either lack or are otherwise denied coverage, then your pre-existing conditions won't be covered because nobody wants to pay for them. In real world terms, the patient is uninsurable for the things that count most to the patient.
As Mr. Lyman points out, it makes no economic sense to expect a profit seeking entity to purposely subject itself to losses that it can otherwise avoid. Expecting the free market to address this segment on its own makes no sense whatsoever.
Any comment about the AMA is entirely useful, Klug, as it reveals that the speaker is repeating things they've heard rather than being intimately acquainted with the situation.
If you are "intimately acquainted with the situation", then you should know that you're being disingenuous to deny that the AMA is a political lobby that fights to preserve a cost structure and insurance system that benefit members of its profession.
It also serves doctors to have legislation that tends to push work up the chain to them that could be delegated downward to lower paid workers. Guilds are all about preserving exclusivity, and the AMA makes an effort to promote what serves their own interests, at the expense of the patient and, in the case of Medicare, the taxpayer.
40% of the private health insurance provided in the US is provided by non-profit insurance companies.
As I've already indicated to you, "non-profit" is a tax status. Profits are taxed. Non profits don't earn "profits" as defined in the Internal Revenue Code, and therefore don't pay taxes.
That doesn't mean that they are not operated out of self-interest or that those who run them don't use them to make money for themselves. Two of our most famous "non profits" are the NFL and ETS, the testing company that makes gobs of cash selling SATs and other exams to American kids. If you think that the National Football League is a charity as is the Salvation Army, then think again.
Once workers unionize, the market for labor ceases to be competitive. It becomes illegal to purchase labor from competing suppliers.
By definition, the suppliers of labor have agreed to allow a third-party negotiate for them. The competing suppliers stop competing, and unify in the belief that they will get a better deal collectively than they would individually.
The union has to compete in the marketplace against management to prove that it is worth joining. Management can compete by offering a deal that is good enough that collective bargaining is rejected by the workforce.
Companies tend to get the unions that they deserve. Find a workforce that clamors to join a union, and you're bound to find failed managers in the offices down the hall, who fail to see how their own behavior impacts the outcome.
And I join MDT in thinking that universal high-deductible catastrophic care makes substantial sense (few people will buy it for themselves, so we might as well pay for it with a rational tax rather than a random system as we currently have).
I actually could see this happening, given the desire of the politicos to preserve the insurance companies' role in the system, and the need for businesses to lower their costs. But this sort of system will not be very effective in controlling overall expenses. It would certainly help the insurance industry and it would be superior to what we have now, but the costs would be crippling, insurers will continue to suck overhead out of the system, and deferred treatments will turn more minor problems into expensive ailments treated at taxpayer expense.
Eventually, the costs are going to have to be addressed. Since rationing of some kind is inevitable -- we already have it now -- we need to accept that rationing is integral to the issue, and then decide what sort of rationing is acceptable. We also need to tackle costs, including both the labor, given that labor is such a significant cost component, and the cost of heroic measures, which push the extreme ends of the expense bell curve.
I suspect that a more rational system will see lower paid doctors, more nurses, more minor issues addressed by your local pharmacist and less high-tech used to extend the lives of those who are close to dying. That won't be a perfect outcome, but as there is no such thing as a perfect outcome, it's a matter of choosing your preferred lack of perfection.
Oh, I know that the AMA works for its own interests, but those are not necessarily those of physicians at large - indeed, most physicians dedicate their lobbying dollars to their own subspecialty's lobby, because the method by which govt dollars are apportioned is to say "well, this is the amount we'll pay for physician fees this year" and let the specialties fight it out.
Forgive me for reading more into your comment than you may have meant; almost every time I see the AMA dragged into it, it is in terms of restricting medical school admissions. This is not the chokepoint in the supply of practicing physicians in various fields; as I pointed out above, residency is. I wanted to point out something that is not at all apparent to those outside the field.
Nimed:
An hour of labor also lacks will and cannot be coerced. You can however coerce the people selling either labor or software.
But let me address your main point (which you've finally gotten around to). As is apparent from the fact that workers often do change jobs, the labor market is not a monopsony (the word for a one-buyer market).
(There may be exceptions in certain highly specialized fields, such as experts in specific pieces of software or special types of securities.)
The labor market is simply a (moderately) competitive market with some transition costs. These costs exist both on the part of the employer (recruiting and training new employees) and on the part of the worker (searching for a new job). Unionization, as it is currently practiced in the US, turns the process into a monopoly only for workers.
To return to my original point, like most monopolies, one can lower the price of union labor to competitive market price without any corresponding loss in production.
Nimed says in part..."The relevant statistic being 45.8 million, or 15.7%, uninsured at any time (in 2005, most likely higher now). Non-chronically uninsured individuals don't get their medical bills covered because they had insurance 6 months ago."
45M is the irrelevant number. It includes those who can have their medical bills paid because they are eligible to sign up for insurance retroactively. It includes non citizens. It includes people who don't have coverage for very short periods. In short, it's a scare number pushed by people who are more interested in an agenda than discussing the circumstances.
It does include non-citized (20%, which still leaves 12%). I personally think it should include non-citizens, but yeah, this is debatable.
Those who can sign up for insurance retroactively are a tiny percentage, if I remember correctly. I don't have the time to look for the source now.
Very short periods? This is up to a year. But this is irrelevant, because your misinterpreting the statistic. Let's say that, at any given time for the period of a year, 10 people are uninsured. This may mean that the same 10 people are uninsured throughout the year, or that 10 people are uninsured for half the year and 10 for the other half (20 people), or 40 people for 3 months, etc. It's absurd to count just the permanently uninsured, since any of the temporarily uninsured is not covered if something happens to them. The number of uninsured at any given time is what matters in terms of risk of care denial or risk of bankruptcy for the population.
There's also the underinsured.
No... Counting just the permanently uninsured gives a distorted picture of what's going on in the country. People who either don't have access to health care or run the risk of bankruptcy are much closer to 20% than to 4%.
I think the public payor option for health care could be summarized as "from each according to his ability, to each according to his needs." Reminds me of something I read once....
There is no constitutional "right" to health care. There is a humanitarian imperative. But humanitarian ideals don't work well with market mechanisms, and they work even worse with government payment. Just ask anyone who's had to listen to a state-sponsored sermon in Finland. My God, you can't understand a thing they say!
I've had experience with two different socialized healthcare systems (Germany and Taiwan). The plus side is they are very cheap. The down side is that the quality of care was not nearly up to US standards (even in Germany). Even the quality and cleanliness of the hospitals was not up to snuff -- which really surprised me in Germany. Of course, there is a lot of gold-plating in the US that isn't necessary. And for most things, 80% effectiveness at 20% the cost is probably a very good deal. But I don't necessarily want to be forced into that choice.
I would agree with your comment. I was cared for in Switzerland in the '90s, and the hospital was very clean. But all the Dr.s were out on Sundays. God help you if you have a stroke at 3 am on a Sunday.
I had a neurological issue that morphed into an endocrine issue, and I had to come back to the US to get diagnosed. In 5 min at a competent endocrinologist, mind you. After mucking around overseas for months.
You get what you pay for.
And the government is different how?
The NFL is a non-profit just like the National Association of Realtors is a non-profit - they are the non-profit representatives of for profit groups. That same could not be said of Kaiser Permanente - and you're smart enought to know that.
Nimed,
The remainder of your comments are analytically flawed. You appear to believe that because our hybrid system has certain populations under government sponsorship the private sector has to accept this as a failure. This is just wrong.
Your sentence, not mine. But what's this I'm reading about hydrid? Why should you need government sponsorship when everybody could be covered by the superior private insurance market? After all, if government intervention leads to worse outcomes, shouldn't people be dissatisfied with Medicaid and Medicare?
And if I misinterpreted you and you are for a hybrid system, why shouldn't it cover everybody? It already covers the most expensive pations, the elderly.
Nimed,
We have a hybrid system. In discussing current circusmtances this is simply true. It doesn't matter if I advocate it or not. Private markets don't fail to cover these people because they cannot. They don't cover these people because government took it upon themselves to do so.
Government intervention does lead to worse outcomes. Unfortunately, people cannot simply reject it. The outcomes are effected based on the market generally, not on one decision of which policy to hold. And yes, the private companies were perfectly fine accepting this. As they were when the government incentivized employer based health insurance. What you think this has to do with free markets is is not clear. Free markets aren't pro-business, they're pro future consumer. So current, especially large, business lover government interference. You'd have much more success understanding if you thought about health care in a longer time frame, say 50 years.
I'm willing to accept some market interference, if done in the least interfering way. Which means I'd support private healthcare and insurance with subsidies to help targeted groups purchase the coverage. I would also eliminate the employer from the relationship. Insurance would remain regulated to ensure people aren't dropped. I would not choose to worsen the health of future generations so I can tell everyone they can have something for nothing.
By the way, if I argued like you I would say "people are dissatisfied with Medicare" and claim this proves government based insurance is a failure without concerning myself about the circumstances. Then I'd repeat the word failure twice a paragraph. Would you find this persuasive?
Huh? Are you arguing with imaginary friends? It's certainly not with my claims.
Yes, you are arguing with imaginary friends. I never claimed satisfaction "proved" anything. But it certainly doesn't hurt. You, on the other hand, simply state
Without, of course, a shred of evidence. Make that without even saying what a worst outcome is. When I point out that most other countries have comparable or better health results than the U.S., frequently with nearly half the costs, you claim
Again without any evidence. I guess it's a style. Another bizarre sentence is
Ignoring the "something for nothing" straw man, presumably this means that investment in medical research will suffer considerably with an universal health care system. Is it still necessary to point out that you don't advance a single source for this?
Lastly, I remind you that medical research predictably increases health care outcomes, but also its costs. So we can expect that, under a system with the least possible market interference, an increasingly narrower percentage of those future generations you are so concerned with will actually be able to pay for it, and hence benefit from said research.
Pleonasm aside, good for you. I for one am glad nobody's asking you.
That same could not be said of Kaiser Permanente - and you're smart enought to know that.
Kaiser is a non-profit in the same way that Starbucks is a non-profit fulfilling a social mission to keep people awake and provide them with internet access.
It's a tax status. You want to portray them as if they are charities, when they are not.
The average person erroneously believes that "not for profit" means "bleeding heart do-gooders." Often, it actually means "smart business guy who has figured out how to start a business that doesn't get taxed." It's all about creating administrative costs that end up in your pocket.
Good thing we don't have to worry about the government creating administrative costs that will end up in the pockets of it's bureaucrats, unions, and campaign funds!
Rob,
And we reach this blog's Aquilles heel - misconceptions about the rest of the world. So let's consider the countries who have comparable results on health care and manage to cover everybody at a much lower cost (as percentage of GDP). This group is essentially composed of Western European countries, Japan, Canada and Australia.
Physical security - I agree with you on Canada, not for the rest. U.S. membership in NATO provides a mighty deterrent. But would Western European countries be invaded if it wasn't for NATO? Western Europe has two states with nuclear weapons, as well as a joint conventional army much bigger than its neighbors. Japan and Australia are not NATO members, but they don't exactly fear for their sovereignty. Why is that? The U.S. has a bloated national security budget, but while spending the equivalent to the rest of the world combined has is advantages, I don't think the U.S. has enough bang for its buck. What it certainly does is serve a continuous source of military adventurism temptations. And while some interventions certainly have positive outcomes, on the whole I'm not so sure.
Financial stability - This is not a cost for the U.S., it's a source of income, so I don't see the trade-off here. It's hard to think that an universal health care system would put the U.S. financial stability at risk. Nothing did more to threat this stability than the current depression, which I'm sure you agree is not related to health care.
Medical innovation - This is taken for granted, but I have yet to see any data on drug research. Or even the relative share of profit of global pharmaceutical companies due to the U.S. market. I know that most pharmaceuticals release their drugs in the U.S. first, and why wouldn't they, if it's the best market for them? To what extent government negotiation of drug prices would impact research is unknown. You would expect it to slow down, but people around here assume that research would grind to a halt, with really no evidence of this. A critical information I'd really like to have is what percentage of GDP would you obtain if you would sum up the money invested in research by all pharmaceutical companies in the world. This would give us an idea of the numbers we are dealing with here.
In sum, the proposition that other developed countries' universal access to health care is dependent on the U.S. strikes me as rather unfounded.
But suppose it was true. Why on Earth would the average U.S. citizen accept this horrible state of affairs?
I agree with you here (although I think we could, to an extent, "copy" Switzerland system). All I'm saying is that it's no use arguing that an universal health care system can't work in principle when it already does in most of the developed world.
RW,
What you are saying is just not accurate. I know you would like it to be so, but your wish to believe it does not make it so.
RW,
Sorry - that should have read:
"Kaiser is a non-profit in the same way that Starbucks is a non-profit fulfilling a social mission to keep people awake and provide them with internet access."
What you are saying is just not accurate. I know you would like it to be so, but your wish does not make it so. The goals and motives of Starbucks are quite different from those of Kaiser.
I know you would like it to be so, but your wish to believe it does not make it so.
Sorry, but you clearly are uninformed. I've personally done business with these sorts of not-quite-so-charitable non-profits, so I've seen firsthand how they are very much like the rest of us in the for-profit world. They do a gratuitous amount of work to preserve their tax status, but then move the money where it best suits the management.
What's quite funny is that I am acquainted with some NFL employees who didn't even realize that they were employed by a non-profit until I informed them. There was nothing in the management style or daily operations that informed them of what charitable, decent folks they were by serving the football requirements of the American people.
Nimed says in part.."it's no use arguing that an universal health care system can't work in principle when it already does in most of the developed world."
This argument doesn't follow. European systems have something we won't have if we join them, a significant freer market development system to free ride on.
You kind of didn't read the rest of the comment, did you?
I read it. You admit the issue is real and would like to know more, but then somehow conclude that it doesn't matter anyway.
Anything else?
Read it again.
I state that the proposition that Europeans are free riding is taken as granted without any evidence to support it. Which is, you know, exactly what you're doing.
Physical security - I agree with you on Canada, not for the rest.
Can you name any country which can credibly defend oceangoing commerce?
Japan and Western Europe face no threats today, I agree. That is not the same as saying they would face no threats if the US deterrent and implicit commitment to protecting the sea lanes were removed. I do not think we have ushered in some new era a global harmony where China and Japan will never be tempted to attack each other the various European powers wouldn't tilt towards military adventurism given a chance. As for Europe's "joint conventional army," well, I'm dubious they could depend on anything resembling joint action without US involvement, their logistic capacity sucks (airlift virtually non-existent), and they can't operate for very long without the US Navy protecting their merchant shipping.
This is taken for granted, but I have yet to see any data on drug research. Or even the relative share of profit of global pharmaceutical companies due to the U.S. market.
True, it would be nice to have more data. Keep in mind that drug research is not the only kind of innovation; medical and diagnotic devices and surgical techniques also need to be be invented. Orthopedic surgery, as an example, has actually gotten cheaper in the last 20 years (also more effective and less invasive) thanks to profit-seeking companies.
I don't think that universal care is impossible in principle, I think it's very likely to be a disaster in practice. And, while RW frames the issue as one of costs and benefits of universal care, I also see the issue in terms of the individual's relationship to Leviathan, the preservation of freedom, and the damage that dependency does to one's moral character. That does bias me somewhat.
Also: It's hard to think that an universal health care system would put the U.S. financial stability at risk.
Borrowing and spending like we are doing right now--and at an increased rate, should be go bananas on health care--will put it at risk.
Listen Rob, I more often than not I enjoy reading your comments, but, as I said upthread, I believe foreign policy is the Achilles heel of this blog. Specifically, I think there's a number of misconceptions about other developed nations.
Well, France and England have a combined navy size of 25% of the U.S. I would imagine Greece, Norway, Netherlands, Spain and Portugal to have navies of a significant size.
Most importantly, piracy is a relatively small problem, and it will always remain so as long as it's not supported by powerful states. There's a reason people who want to make piracy seem a serious problem usually present statistics in absolute numbers instead of percentages. If you compare the cases of piracy with the world sea traffic with, it's tiny. It's a small problem even in the most problematic areas (East Africa and Southeast Asia). It's hard to imagine that the world maritime transportation would paralyze without the U.S. navy.
Let me restate that. Of course, if the U.S. Navy would suddenly disappear, we could expect piracy to rise, probably dramatically in the short term. Just as if the U.S. military was greatly reduced, you would expect the remaining NATO powers to increase its military.
But this is all common sense. There's no point in everybody having a gigantic navy if your military allies already have one. But what are you saying, exactly? That Western Europe, Japan and Australia couldn't have universal health care and a navy?
As to defense, you can't be serious if you think that EU couldn't coordinate a response to a territorial threat. Interventions overseas are, of course, another matter.
I think we are in fact in an era of global harmony between developed nations. Mostly for one reason: trade. First world nations don't stand to gain anything by attacking other first world nations, and there's simply no political support for the idea.
Similarly, China and Japan don't have any reason to go to war. And if they have any reason to go to war, the most effective deterrent would be economic, not military. Intervening in such a war would imply reinstating the draft, as well as costs in blood and treasury in a very different scale from Iraq and Afghanistan.
Sure, couldn't agree more. I mentioned drug research because frequently those other kinds of innovation are at least partially funded by the government.
I think you mean any data. The cost of research keeps being used as an argument, but I've never seen any actual numbers on this, even a very rough estimate. The difference between U.S. spending and Switzerland, the second country that spends the most on health care, is almost 4% of GDP. That's 553 billion dollars. NIH budget is 29 billion. NSF budget is 6 billion. Drug development, specifically clinical trials, are one of the most expensive types of research, but how does it compare to this?
Yeah, this is not the best time. Hopefully, a health care reform would cut costs in the long run, but it increases them immediately.
Well, we all have our biases. Actually, this is a very interesting topic that deserves an entirely new comment.
There was nothing in the management style or daily operations that informed them of what charitable, decent folks they were by serving the football requirements of the American people.
The fact that some people get to sit in skyboxes and others have to settle for watching on ESPN shows that the NFL has failed to deliver universal football access. Somebody get Ted Kennedy to write a bill.
I've personally done business with these sorts of not-quite-so-charitable non-profits, so I've seen firsthand how they are very much like the rest of us in the for-profit world.
So, please tell me how the government is different?
Does anyone think it possible that other western nations spend relatively less on healthcare because their populations are healthier?
Well, they are healthier, if you think life expectancy is a good proxy for health. The big discussion is if it's attributable to health care, or other stuff, or a mixture of the 2.
It's hard to control for these other things. For instance, when it comes to the 2 leading preventable causes of death, obesity is more of a problem in the U.S., but on the other hand Europeans tend to smoke more.
But I don't know if healthier populations diminish health costs in the long run. In other western nations, partly because they live longer, partly because they have less offspring, population age is more of a problem than in the U.S. And the older the population, the more you spend on health care..
Nimed,
Almost all the countries held up as exemplars actually spend less on the elderly as a matter of policy, so an aging population will make the US look worse, everything else being equal.
What I am getting at is the assumption that Canadians/Western Europeans live longer because they have universal care- care that actually costs less. I think it more logical to think the causation direction is entirely wrong. Canadians and Western Europeans would live as long, and longer than Americans, even if they were "burdened" by the US medical system, and I think it 100% certain that universal care in the US won't change US outcomes/trends in any measurable way for the better.
Americans live less healthy lifestyles than Canadians and Europeans, and this fact is one of the reasons that Americans have to spend more on healthcare, and why the others get to spend less. These difference lifestyles are not going to change with the adoption of universal care in the US. Americans will continue to have lifespans a few months to a few years shorter than Canadians and Western Europeans for the forseeable future.
Most importantly, piracy is a relatively small problem
It is now. But 1) there's no reason to expect it to remain so permanently, and 2) the sea lanes are not threatened only by pirates, but also, in wartime, by foreign navies. Control of the Atlantic has been important in intra-European conflict dating back to the mid-18th century at least; control of the Indian Ocean would be the difference between victory and defeat in most conflicts involving China. Can France and its single carrier hope to contest either of those absent US help? Britain, maybe, but do they care enough to get involved in France's problems?
Right now, the US rules the waves, and pretty much everyone benefits.
Intervening in [war between China and Japan] would imply reinstating the draft, as well as costs in blood and treasury in a very different scale from Iraq and Afghanistan.
Intervening in such a war would involve sinking the navy of the side we didn't like and then seizing oil tankers bound for their ports, which would be cheaper and easier than Iraq or Afghanistan. Game over.
As to defense, you can't be serious if you think that EU couldn't coordinate a response to a territorial threat
I am very serious in doubting their ability to operate jointly on a tactical level, and also their willingness to do so on a strategic level. How many Italians would die to defend Germany? How many would prefer to merely reinforce Alpine passes and hope for the best?
I don't really believe we're on the edge of war here, but when you remove the relatively benign 800-lb gorilla, who knows what kind of trouble the less benign 100-lb gorillas will get into? Right now, nobody, anywhere, has any reason to worry about their nation starving because the US isn't going to blockade them, and nobody else can blockade anything without tacit US approval. So nobody, anywhere, needs to worry about building a blue-water navy. But if Germany decided in needed to be able to credibly contest the Atlantic, then one suspects France might feel the same way, along with perhaps Poland and Russia. Which in turn might get Britain more itchy, etc. And that's just the relatively sane parts of the world. And that would put strain on budgets which are already struggling.
Is it enough to break them? I don't know.
I think we are in fact in an era of global harmony between developed nations. Mostly for one reason: trade. First world nations don't stand to gain anything by attacking other first world nations, and there's simply no political support for the idea.
Right now that may very well be the case. But, in 10 years the picture could be entirely different. Look at the world in 1787 vs 1812, 1909 vs 1917, 1929 vs 1936 the geopolitical stage can change dramatically in a very short period of time.
you can't be serious if you think that EU couldn't coordinate a response to a territorial threat
Bosnia and Kosovo pretty much proved that they can't. The Serbs came close to running death camps of their own, but even that couldn't inspire many people to act. (To be fair, Bush 41 didn't bother, either; a lot of trauma could have been spared had he intervened earlier, rather than leaving it to Clinton.)
There is no political will in the EU to fight, the people don't want it and there is no unified foreign policy. The EU is closer to being a confederation than a republic, and there is a reason why the US dumped the confederation model early in the game. It can work for a country such as Switzerland, but for a proactive nation-state with an agenda for growth like the United States, that form of government just doesn't work.
I think we are in fact in an era of global harmony between developed nations.
That's true, but there are the usual traditional behemoths of which to be wary (China, Russia), plus potential hot spots that will come and go. For the moment, good fun is brewing in Pakistan, Iran has some potential and some of the Soviet breakaways, particularly those located close to oil and gas, could become reliable sources of entertainment (such as Georgia, and I don't mean Atlanta.)
You can't run a policy on the assumption that everything will always be OK or just as it is now. On the other hand, if we're going to wage war, then we have to be sure to wage ones that we can win, and win quickly. The ability to engage in prolonged conflicts is no longer in our nature.
Well, Bosnia, Croatia Servia and Albania are not EU nor NATO members (yet). By territorial war I meant a war that attacked an EU member.
And I disagree with you analysis. Remember, there is still discussion, until today, if that was a civil war or a (much more serious) war of aggression. People were not sure what the hell was going on for some time. NATO entered the war with baby steps, and only when the International Court considered that there was proof of genocide and crimes against humanity, did NATO forces start bombing the Serbs. Several countries, not just the U.S., participated in the bombing and one French fighter was even shot down.
Yes, but that was the objective since the beginning. Every European would be horrified at the perspective of losing the sovereignty of its country and become the United States of Europe. There is no master plan: EU started as coal and steel trade agreement.
Well, Russia is not that much of a behemoth, really. At least militarily (if you don't count the nuclear warheads, of course). If there's any danger from Russia, it's the temptation to swallow it's former republics (which is a pretty lousy thing, but no large scale threat), and the secret selling of its nuclear arsenal. The best thing to do with Russia is to sign a disarmament agreement. The less of those babies hanging around in a relatively poor country, the better.
That is serious, indeed.
Iran has the most modern and secular roots of the Middle East (except for Israel, of course). It has, I have to say it, some justified grudges with the U.S. and to a lesser extent France, who had a part to play in every war and political upheaval over there for the last 50 years. If the U.S. and E.U. play their cards right, Iran could be a stabilizing force in the region.
Well, that's the thing. If everything is not OK and the conflict involves some serious player, like China or Russia, attacking a neighbor, the U.S. almost certainly will do nothing alone. Which is a good thing. The idea that the U.S. may police the world is not just bad; it's a dangerous illusion.
Health care costs are accelerating, and will continue to accelerate, merely due to the fact that the population is aging and we are all living longer and expecting (demanding) more medical care.
Nothing I have seen debated does anything to control costs, other than by a wave of the hand assumption that the docs will suddenly be willing to take a 30-40% pay cut. What a joke. Usually it's people from the so called "reality based community" who are the prime offenders.
Unless we tell people to stop getting old, costs are going to escalate.
We know how to really control costs: put the docs on salary and make them work in a Mayo Clinic-like collaborative environment. Nothing else works and nothing else will work.
In the longer term Medicare needs to be phased out, coincident with mechanisms to help people accumulate substantial assets during their working lives.