Why Single-Payer Health Care Saves Money
nytimes.com
nytimes.com
In the list of nations with the best bang for buck healthcare programs, you will notice that top 20 healthcare programs are mostly single payer.
http://www.who.int/healthinfo/paper30.pdf
But there are single payer healthcare systems with bad health indexes, you might say... Well, combine single payer healthcare systems and add some transparency in healthcare and you now have an unmissable correlation.
https://www.transparency.org/whatwedo/publication/global_cor...
The top 20 bang for buck healthcare programs (mostly single payer systems), have an average ranking in terms of healthcare transparency of 18.7.
Are you from the USA? Notice the countries with universal healthcare, who have a similar healthcare transparency ranking to that of the USA: Luxembourg, Canada, Germany, France, Belgium, Ireland, and Chile. Their bang for buck rankings are 16, 30, 25, 1, 21, 19, 33 respectively. All of these countries have a better bang for buck ranking than the USA's 37.
In one sentence... Universal and transparently managed healthcare consistently gives more bang for buck.
And now to quote the original article... "It is a bedrock economic principle that if we can find a way to do something more efficiently, it’s possible for everyone to come out ahead."
EDIT: Check page 18 in the first source. Check chapter 11 in the second source.
If the US switches to mostly single payer, but still allows for private insurance and private doctors to exist, the wealthy will probably have to pay more to access them, but they'll still be able to access them.
BUT we could go back and forth all day with conjecture... Give me some apples to apples numbers; that's what I joined HN for.
This is directly analogous to private primary education: the wealthy still pay taxes to fund public schools, while paying addition for private schools as well.
Incidentally, "level of care" is almost meaningless in most first-world systems. The difference I experience, due to my private health insurance here, is not in outcomes, but in time to service for elective procedures, and access to private facilities (most notably a private room for overnight/extended hospital stays). And that time-to-service difference vanishes for emergency care.
EDIT: additional insider tip. If you have private health cover in such a system, and are being treated for a major medical issue, ask for a private room in a public hospital, because that is where our clinicians spend most of their day-to-day. If you are in a room in a private hospital, there are often no specialist clinicians on site. Whilst this may make no difference for most cases, any sudden complication may be dealt with much more quickly. This is possible in our hybrid system because the hospital is a separate institution from the state and happily does both public and private billing.
Our system (the USA) maximizes rent seeking, thru obfuscation, disjoint regulation, spotty oversight and enforcement.
You're going to have to provide a lot more support for that claim. All you've really provided is the implication that "most expensive" = "best". But expense is also a result of inefficiencies, and we "undoubtedly" have a less efficient system (more administrative overhead.. I can cite sources if anyone doubts it).
Other single-payer systems, for example, also provide complementary or supplementary private options.[1] And since these private options have to compete with a baseline of quality public care, they may be more affordable.
In such a hybrid system the public hospitals also experience competitive pressures. I can confirm pretty much first-hand[1] that this is why pathology turn-around times in a major metropolitan Australian public health service are measured in hours, whilst in the UK they are measured in weeks.
[1] I am married to the medical director of this service.
It simply does not follow that, because single payer systems offer better value in terms of benefit gained for the dollars spent, those efficiency improvements mean it's possible for everyone to come out ahead. Those last few iotas of healthcare improvement are a lot more expensive than the lower-hanging fruit.
The NHS does not assess cost-effectiveness of treatment in the UK in that fashion, and does not deny it on that basis.
Cost-effectiveness by QALY is one factor included in assessments by a separate body, NICE, which a) is not part of the NHS and b) does not inhibit NHS bodies from offering any particular treatment. If NICE gives a treatment option the green light, then the NHS trusts are obliged to offer it in applicable circumstances. If NICE does not, then individual (local) NHS trusts can make their own assessment. If there is a local cost constraint, that is considered as a matter of simple necessity.
It is a common falsehood often repeated by opponents of single-payer systems that doctors in such systems are directly prevented from offering treatments by faceless beancounters. It simply isn't so. Quite the opposite. The assessors may say "you must offer this treatment". They do not say "you must not".
However, QALY itself is IMO a terrible metric mainly because it is sufficiently describable to non-practitioners to become a political football.
At best, requiring a treatment rejected by NICE leaves your fate up to a postcode lottery where your location determines whether you have access to it. At worst, nowhere will cover it. Also, cost per QALY is one of the main factors NICE uses, and the ACA means it and similar measures cannot be used as any kind of factor at all in the US.
I like the incentives that NICE creates instead. Over time, it's a strong net national benefit.
The failure to include such a mechanism in the ACA seems more to do with US politics than any intrinsic characteristic of single-payer systems.
The NHS has apparently been under-funded for decades, far too long a period to call it a "crisis". I would maintain it is simply grossly inefficient at spending the money it does receive, due to horrible management. Again, this is not an intrinsic characteristic of such systems.
This.
And lets put it in concrete terms.
If you are 40 and get cancer you get treatment.
If you are 82 and get cancer you get pain meds.
And there is no US politician that is going to fall on that grenade.
Compare with the current system, where any given user is still effectively dealing with a single payer -- their insurance provider. Their insurance provider is one level of removal from the health system that has to be paid.
Now, the idea of transparency? That's lovely, and would force accountability and that sort of thing which could potentially have impact. I can't disagree with that. I'm not sure that just putting the government in the middle fixes that either, though.
As /u/frgtpsswrdlame points out, we have the most expensive health care, which seems like the bigger issue that isn't addressed. If we lessened the cost of health care in the US, that would probably be a better start, imo. Does single payer fix that? I would think that private, competing companies would seek out better deals vs a single government entity who couldn't really negotiate, but perhaps I've got that backwards.
I'm not disagreeing with the thought on the whole, I just don't see how single payer fixes these problems.
You're right that costs need containing though, and it's not quite as simply as "just" switching to a singly payer system.
That's the biggest advantage of single payer, one buyer can negotiate better deals with suppliers because there are no other buyers. It's basically a reverse monopoly.
Transparency in healthcare + Single payer (by the government) = Efficiency
(see sources and explanation in my original comment)
So yes, putting the US government in the middle is what I'm suggesting. Or is the US government not a leading force in fighting corruption anymore?
But wait, is this not conjecture, since it doesn't currently exist? Sure, you have sources where it has worked, but the proof would only be implementing it here.
> Or is the US government not a leading force in fighting corruption anymore?
What? I don't understand what you're getting at here. My point isn't that the government is corrupt, it's that it's inefficient.
Universal and transparently managed healthcare consistently gives more bang for buck. Note that I said "consistently", not just in a few places.
Yes, obviously you can't know what's going to happen in the US until you try it. But if it has consistently worked around the world, the best guess is that it will work in the US as well. Surely your argument, can't be... "how can I know this ball is going to fall into the Earth, if I haven't dropped it yet".
> What? I don't understand what you're getting at here. My point isn't that the government is corrupt, it's that it's inefficient.
And my point is that transparency in healthcare + single payer makes the system efficient.
For example (according to the first Google links for "usa/uk average doctor salary"), the average doctor salary in the UK is $128,500, compared to $189,000 in the US. How are we going to cut salaries by 32%?
My guess is that there are salary discrepancies across the medical industry.
I did not look this up. But I know one thing, eventually you will save money. I don't suppose that it would take longer than 20 years to save money, but I frankly don't know. Maybe you could look it up to expand on your point:-D
> average doctor salary in the UK.. Compared to... In the US.
That is not apples to apples. There are countries with lower and higher pay, both overall and relative. Plus you have think of differences in cost of living, taxation, malpractice insurance, and even their own medical insurance.
Here's a link I found covering a bit of that. The chart would be the tldr. https://www.forbes.com/sites/theapothecary/2013/05/28/are-u-...
Um...
https://www.transparency.org/news/feature/corruption_percept...
But in the context of the conversation, I think #18 is good enough to make the cutoff for single payer. After all, other countries with lower healthcare transparency are still more efficient with their universal systems.
krupan - I don't have the data for what has happened with transparency when countries implemented universal healthcare. So I don't have the answer for that.
Was it ever?
http://www.pnhp.org/single_payer_resources/health_care_syste...
Plus a good dash of capitation, to incentivise wellness thru prevention, vs fee-for-service.
That's a really important "possible" though. It is a near certainty that if were to transition to single payer healthcare we would not do the transfers to hold everyone profiting from the current system harmless (e.g. health insurance employees). In any realistic scenario there would be winners and losers which is why you see fierce lobbying on both sides of the issue.
It's the difference between Pareto and Kaldor-Hicks (See this prior comment for the definitions: https://news.ycombinator.com/item?id=14605477 )
You can set a cap of how much tax someone pays for healthcare, such that rich people don't get screwed.
The question here is what's more efficient... And the numbers are there. Single payer + Healthcare transparency = Efficiency.
(see sources and explanation in original comment)
But I'm not here to answer that question.
https://ourworldindata.org/the-link-between-life-expectancy-...
The US is pretty divergent... and not in a good way.
Enough already, guys.
Yeah, it's just annoying, and it'll take a loooot of time to fix these small annoyances.
Yes - and I actually prefer shopping at places that don't use manipulative ($x.99) pricing or if they do, at least tax has already been included in the price (a local card shop does that). If something is $0.99 I should be able to buy it if I only have $1.00 with me, but after tax it comes out to $1.08. Infuriating.
I just tack 10% onto everything mentally, actual rate is 8.25% but 10% is easier to do mentally.
Most people do that. They just assume that it will be some multiplier above the advertised price.
[0] Everywhere I can remember purchasing gas, that is.
With the federal government unable to act, turning healthcare back to the states to test a number of different solutions seems entirely reasonable. Let California try single-payer and Texas try something different -- after a few years see if we've found a solution that could work for the whole country.
Why would you imagine that?
Regardless... You must also then ask the question, whether a "truly free market health care system" would be ethical.
A free market would look something like this:
1) everybody buys their own insurance in a genuinely free marketplace (this is ENTIRELY not the case now and would probably require significant gov intervention to defeat cartel-seeking behavior from insurance co's. There are good reasons insurance is so highly regulated, only the first of which is that insurance companies are highly incentivized to not pay out since they already have your money, and you can't go elsewhere with your claim.)
2) if you can't pay, you die in the gutter.
It wasn't before, so it probably wouldn't serve as one in the future. The issue is that people aren't very good at estimating risk.
I'm young, healthy, and no one in my family has been in a serious car accident/gotten cancer/had a heart attack in the last 15 years. Obviously that happening is a low risk compared to the financial penalty of maintaining insurance today, so why should I worry? Besides, I'm sure I can get some kind of plan from an insurance company if something bad does happen[1]
[1] I'll be sure to look into the feasibility of this statement as soon as I finish all the other important things on my todo list...
I'm really not a socialist, I promise. I just don't see how you'd do it any other better, and it's pretty clear to me that the results are definitively in for our free market experiment.
It's funny how we all pretty much agree the govt should be in charge of stuff like roads, schools, military, police, fire dept, courts, quite a long list of stuff, but adding anything to that is marketed as creeping socialism.
No. It is simply false. Even a 100% free market does not exclude charity.
Lotta people talk about charity as a replacement for government services, but folks give around 3% of their income to charity (tax deductible) in the US. That ain't gonna get it done. Not even close.
People would have you believe they would give more if they didn't pay as much in taxes, but there is not one shred of evidence that is the case based on variations in local tax rates. And that's a hell of a gap to bridge based on a such a dubious promise.
Occam's razor, and the available evidence, suggests that people would just pocket the difference and the poor can go to hell. They're happy to argue the point until they're blue in the face, but if the past year has taught us nothing at all, it's that people are more than capable of crafting any number of passionate arguments around their self-interest, truth be damned.
Why do you imagine it wouldn't!? The portions of health care universally not covered by insurance are not subject to the same cost disease of the industry as a whole. Lo and behold, the real cost of eg. breast augmentation is declining (total cost of about 4K)! The cost of lasik has decreased ~50% over the last 15 years, current results are better, and the surgery has the highest rating of patient satisfaction in the entire industry! A similar result anywhere else in medicine in the US is completely unimaginable.
> Regardless... You must also then ask the question, whether a "truly free market health care system" would be ethical.
Nonsense. The important question is: 'would a "truly free market health care system" be more ethical than the current system'.
In addition to not being covered by insurance those procedures are all elective. For elective procedures a free market is more likely to produce better results.
There is no way to make money insuring or treating poor, sick patients. The free market just can't do it.
The inherent problem here is that the math behind traditional free market economics breaks down when it comes to life saving goods and services. There is no equilibrium to be had, because of a combination of issues.
First the answer to how much will you pay to access this live saving drug is "anything" for 99% of the population. Second, life saving services are time sensitive--customers often can't choose a different supplier except the closest one. Third patent law ensures that there often isn't an alternative supplier.
> Nonsense. The important question is: 'would a "truly free market health care system" be more ethical than the current system'.
If you want to be overly semantic, which you clearly do, that's actually not "the important question" since it actually tells you less than my original question. You care about "a truly free market health care system's" relative ethicality not just in relation to the current system, but also in relation to (all) other potential alternative health care system (like a single payer system)...
Dental work is only semi-elective, and prices are driven down thanks to transparent pricing.
Likewise, one can argue that vision services are also non-elective (e.g. people need to see), and prices go through a very large range.
Many medical conditions are not "emergencies". And even so, I often get referrals from my doctor to external imaging services. If those prices were transparent, I imagine a downwards pressure on prices would happen quite quickly.
To give an example, ultrasounds for pregnancies cost ~$250, ultrasounds for almost anything else are 50% to 100% higher in price. In a similar vein, x-rays at the dentist are next to nothing (despite involving a cool robot that rotates around my head, and a digital x-ray sensor that lets me look at images right away!), x-rays for anything else can end up in the hundreds.
Hospitals would also benefit from transparent pricing, if there was a legal mandate that all suppliers be open and honest, prices would drop for everyone. When a hospital sees that other hospitals in the area can offer the same service at a lower cost, meeting the same quality standards, then they can start pushing their vendors to lower prices.
If California implements a single payer system, it would make people in other states more likely to choose not to get healthcare; if they get sick, they can just move to California.
This is the reason the ACA has the 'individual mandate' to go along with preventing the denial of care because of pre-existing conditions - without some coercive force, there is no reason to buy health care until you get sick.
This is why a national single payer system is the solution.
Surely you could require an newly established resident who wants treatment to pay a portion since they hadn't been funding it directly via taxes, and then add a further penalty if they move back out of state within a certain period of time (to discourage moving in-state just for treatment).
I'm confused by your question. Countries with single-payer have the same policy everywhere in the country, so there is no freeloading involved.
Unless you're talking about people coming from other countries, in which case it's handled by their immigration policy.
However, it is really hard to do it in a fair and humane way; to deny care to people trying to freeload but not deny care to people who aren't.
The whole point of universal, single payer, healthcare is to avoid having to make this determination.
This isn't an issue for a country because the number of new residents (immigrants) is not a large percentage of the total number of citizens. If it was a state, though, that ratio might not work out; there is a VERY large pool of possible 'freeloaders' who are legally allowed to move to the state whenever they want.
Countries like Germany don't have this problem because they have the power to control their borders. Accessing Germany's healthcare system requires being a German resident. That, in general, requires applying for immigration, which the government may or may not grant. EU citizens can, of course, become German residents without applying for immigration, but every EU state has universal healthcare so there is no incentive to free-ride.
And there's a push within Germany and other countries to limit access to welfare benefits for new residents, even ones from other EU countries: https://www.theguardian.com/world/2016/oct/12/german-governm.... U.S. states don't have the power to do that.
The reasoning goes, it seems, that only bona fide citizens of (say) California will consume welfare in California (you don't move to California to consume California welfare benefits in Ohio). But college education benefits are "portable"; you could conceivably move to California solely for the purpose of accumulating the benefits of a UC education, then take it back with you to Ohio.
Further, the way in-state tuition benefits are structured, the residency requirement is (supposedly) carefully tailored to address just that scenario, by imposing relatively short durational requirements on residency, rather than evidence of permanent residency.
It's tricky to piece out how health care would fit into this rubric. Depending on the condition, you might move to California to benefit from their health care and return to Ohio when you're cured, or you might need to stay in California indefinitely to treat a manageable illness.
But you are of course right, it's not possible to simply move to Germany just to receive treatment under health insurance. To become member of a health fund you need to fulfil certain conditions, e.g. by starting employment. This applies even to German citizens moving from abroad.
In Canada, generally you have to be a legal resident (i.e. hold a valid immigration status, not just limited to permanent resident or citizen) of the relevant province, and actually living there for a majority of the time, before being eligible for coverage under the province's health plan.
See e.g. http://www.health.gov.on.ca/en/public/programs/ohip/ohipfaq_...
California would probably have to add a waiting period since not all US residents would otherwise have coverage, as in Canada.
I don't think the US has the same demographics as the other countries where this currently appears to succeed. There are way more people who can't pay in the US, we're far too big for this.
The old "America is just different to everywhere else" argument... we see this from the gun nuts too.
In all seriousness, state run healthcare is a great idea, but the government is just such a big stakeholder in having a healthy population that I do not see a good reason for it [at some level] to stay out of that line of business. Single payer works, so much better than the current setup...why not start there and try iterate?
ORRRRR....you do what you've done 27 times before, and you amend the 200 yr old document :) We all make mistakes, sometimes the best option is to own up to them and do something different.
right, as long as you ignore 200 years of legal precedent in which it has...
The federal government already pays for 64.3% of healthcare costs http://www.pnhp.org/news/2016/january/government-funds-nearl.... In a centralized managed system this would likely cover the cost of all healthcare. It's roughly what other industrialized nations pay, per person, for single-payer.
Our current system is seriously inefficient. Look at how much we spend compared to similar industrialized countries that have single-payer systems. These numbers include the ~13% of the population that didn't have health insurance at the time this chart was created. So we currently pay roughly twice as much to cover 87% of our population. If we had a system similar to Germany we could do it with $600/capita/year in private money added. I would gladly split an additional $50/month in healthcare costs with my employer.
Let's say I'm in the business of selling normal goods (say, backpacks). Now, instead of just people going to my website or looking at crowdsourced backpack reviews, there's some cartel that has figured out how to dominate search engines and other sources so that almost all the customers see their middle-man stuff and buy through them instead of directly (even more extreme, maybe they spend massively on lobbying to achieve real rent-seeking via outlawing direct purchases by consumers, although that's not necessary for my argument).
These middle-men charge much higher prices than we'd see if everyone bought directly. But dominating the search-engines while the algorithms constantly change is ENORMOUS work, so these cartel companies pay almost all their revenue to a huge number of employees who work constantly to update their systems and maintain their middle-man dominance. You could say they "barely make a profit!"
So, in that scenario above, it's painfully obvious that the system is horribly wasteful and all-around negative for the economy aside from all the bullshit work of the cartel employees directly providing them income. The room for efficiency improvements are, in this case, nearly the entire REVENUE of the middle-men, minus only the costs of the goods themselves, not just their profits!!
Insurance companies do TONS of bullshit economic waste that is both necessary to the system as it is today yet unnecessary in a single-payer system. All of that waste is NOT profit but IS available margin for efficiency improvements.
But really, insurers are just one aspect. There's also total craziness in the core pricing that providers set and lots of other complete insanity in the status quo.
P.S. the middle-man issues described above are potential market-failures for any market system and just one of many reasons that dogmatic "free market" ideology is bullshit. That said, there's cases where actions to fix market failures only make things worse. Recognizing that free-market dogma is bullshit does NOT mean the opposing dogma is correct.
Risk selection is a very driver of prices in health insurance. If you can spread the risk between healthy and sick people, the price goes down. If you can't, the price goes up.
Secondly, having a population that has no health insurance means less prevention, i.e. worse health problems down the road, again driving the costs up
See, this is what I don't get. I'm fairly inexperienced with this stuff, but it's starting to become relevant in my life. Despite my new employer offering insurance, I'm staying on my parents' until I'm 26 (this was part of their policy even before Obamacare).
However, this is the question I've been asking ... why do I even need health insurance? Why can't the money I pay in the form of premiums just be used to pay for my health care? The answer: well, it can be really expensive, so this way the cost is shared. But why is it expensive? Why don't I ask how much something is versus whether my insurance will cover it?
Again, like I said, I don't have a lot of experience, so go easy on me. But I think my questions are valid.
This is a great deal for you. $55 is no big deal and now if your house burns down you don't suffer a tremendous financial loss.
Similarly there is a really low chance you'll get cancer next year. But if you do it could cost a ton (millions of dollars possibly) to treat. So insurance is a good deal for this too.
Now, in the US 2 other things get lopped on to health insurance that make things a bit more complicated:
1) For a lot of people health insurance covers cheap and predictable expenses like an annual checkup. There are a lot of people that think using insurance for this is a bad idea. But some people think it's a good idea. It's complicated.
2) Health insurance (especially after Obamacare) can be a form of social insurance where healthy and/or rich people pay more than they otherwise would so that unhealthy and/or poor people pay less. This reduces economic inequality. There is a lot of political disagreement about whether this is a good idea.
Did this help? I've glossed over a ton of details but maybe it's enough to get started.
I'm mostly with you in that I don't necessarily think this is a great idea, but that's the general thinking.
1. Though there is less evidence than you might think that this actually works.
Also, skipping your annual health check ups is bad for your insurance company in the long run, so this, at least, they have a huge incentive to make sure you go.
Most people are interested in health care and not health insurance, meaning, we know we are going to use the doctor for something...it isn't a big surprise when your wife gets pregnant (well...I mean...). It isn't a big surprise when you start breaking down toward the end of your life, which is why ~40% of our health care is already socialized via Medicare.
That story needs to come with a caveat that Medicare's anti-fraud efforts are covered by law enforcement budgets, namely FBI https://news.google.com/news/search/section/q/medicare%20fra...
https://ourworldindata.org/the-link-between-life-expectancy-...
Anti-fraud measures can be evaluated for cost-benefit in isolation, but when the fundamental cost structures are so completely out of whack then we should prioritize discussion of the fundamental problems - which is lack of single payer universal healthcare in America.
https://www.theatlantic.com/health/archive/2014/10/why-ameri...
"The researchers compared data on infant health and mortality in the U.S.; Austria, whose rate of 3.8 is roughly average among European nations; and Finland, whose rate of 2.3 is one of the lowest in the world. One of the biggest differences, they found, was in the definition of what could be considered a live birth. “Extremely preterm births recorded in some places may be considered a miscarriage or still birth in other countries,” they wrote. Although the chance of survival for babies born before 23 weeks is low (the American Academy of Pediatrics recommends that doctors don’t resuscitate babies born before that point), they’re recorded as live births in the U.S."
Edit: Absent more aggregated numbers, it looks like Canada records similar to the US, while also having some similar issues with a higher pre-term birth rate, and US rate is still 50% higher than Canadas.
"This difference in reporting, they found, accounted for around 40 percent of the U.S.’s relatively high rate compared to Austria and Finland, a result supported by the CDC report—when analysts excluded babies born before 24 weeks, the number of U.S. deaths dropped to 4.2 per 1,000 live births.
...
When the researchers broke the statistics down by age, they discovered that neonatal deaths were actually less frequent in the U.S. than in Austria and Finland."
It's like a grim logic puzzle where one gets a pile of facts and try to discern the answer.
Country A has higher infant mortality rate than country B. Country A has higher preterm birth rate than country C. Country B has a higher neonatal death rate than country A. etc..
In other words, if it costs you $500 in administration costs and one patient has care that totals $5,000 and another has care that totals $10,000, then their administrative costs are 10% and 20%.
And yet we think that if we shifted more people onto a Medicare-like system, we'd save money.
https://www.amazon.com/Healthcare-Fraud-Auditing-Detection-G...
> The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers.
If there are no other options for clients, it's essentially the government telling doctors how much their services are worth.
Another issue here is termination shock - if a provider comes up under the current system, getting into massive student debt in anticipation of a highly remunerative medical career, how will price controls effect him?
Edit: Here's a deal, lets pay for doctor's educations, implement universal healthcare and call it even.
Consider it the physcians version of labor globalization. Or workers labor negotiations vs ever larger corporations. Only this time its for a public good.
Look at other countries, where taxes are higher, but total income expenses (tax, plus healthcare costs) are lower (with better level of care).
Also, doctors aren't the only thing we should be talking about. That's probably the easiest subject to think about.
It's much, much more difficult to talk about drug and device prices. Should the government dictate how much a new drug or device costs? What are the risks and downsides of doing that?
On a more serious note - education and skills tend to pay off.
Around here, doctors with their own practice are reimbursed by the state via several mechanisms, the two most significant ones are probably a fixed sum for each patient they are responsible for (they get this regardless of whether the patient sees them or not) and a fixed sum for each treatment, prescription filled &c.
Anecdotally, an MD with his own practice earns approx. $100k-$150k annually before taxes; this is 2-2,5 times the national average. (Very roughly speaking, but in the right ballpark)
There's already so many factors distorting the health care market that it is imho hardly an argument against single payer that doctors would have to negotiate compensation against a powerful customer. (It would, after all, at the same time remove a number of other distortions from the mix - while unlikely to leave doctors in the gutter in the process.)
External circumstances change in a lot of professions all the time; for instance, I do not expect the government to help me out (working in the petroleum industry) now that oil prices are more than halved from their peak - that's life. Better adjust to it.
Part of this loan (methinks ~30%) is converted into a scholarship once you pass your exams, thus leaving you (very roughly) $50,000 in debt after six years in med school.)
To me what we have already doesn't feel like a market. It's not like I feel doctors are being paid net/15 and that is why they get a discount. Or that they invest in their health care networks so costs are reduced for them in the long run. Insurance company hedges their bets so that they have the money to pay, but then when you get to a certain age you are chucked to the curb and then society has to pay for it. I just don't see where insurance companies are being fantastic middlemen or support networks for medical professionals or linking those who need care and appropriate medical professionals and producing value above and beyond what a single-payer system provides elsewhere. They just seem to complicate the costs significantly and do not create a market where resources feel distributed efficiently.
To me the biggest weirdness of health insurance is why they are a for-profit industry or largely for profit in the non-competing model they have right now. I want the employees of a insurance company to be smart, paid well and distribute all the resources in a smart way, but instead the goal is making money. If the market was competitive like it is for car insurance and other insurances that is fine because there are actual competitors but the whole equation doesn't work because most individuals making health insurance purchasing decisions have effectively the same amount of choice as whether or not you have Comcast.
A more useful comparison would be the average cost of coronary bypass surgery for someone with a employer-provided health plan versus the cost that Medicare, Medicaid, or the VA pays. And then compare the average wait times of each along with recovery time/effectiveness.
Out of pocket is only one "cost" in this picture.
The vast majority of the savings come from government price fixing. This is what the article means by "large government entities are able to negotiate much more favorable terms with service providers." It's not really a negotiation; at least not like it is in the private sector. When the government controls an entire market, they set prices. They can (and should) take input from providers and drug/device developers, but at the end of the day, whatever they say goes.
There are incredible risks when the government sets prices for a good/service. We should not take on those risks lightly.
Aside from "negotiation is not negotiation in the private sector", you aren't adding much to the discussion. Yes, government negotiation is still negotiation and yes it is not like in the private sector but it doesn't make it any less legitimate.
> Yes, government negotiation is still negotiation and yes it is not like in the private sector but it doesn't make it any less legitimate.
When the government owns an entire industry (as is being proposed in this case with the health insurance industry) I'm not sure if there is any meaningful difference between the sentences, "the government will set a price" and "the government will negotiate a price with providers."
We are talking about price controls as a means of lowering prices. It seems to be about that simple.
I'm a bit confused by what you mean when you say that when the government does it, "it doesn't make it any less legitimate." I'm not arguing about it would be illegitimate or unlawful of the government to set prices. I am, however, suggesting that there are known negative consequences of government price controls.
The general criticism of price controls, as I understand it, is that when the government sets prices too low, it causes shortages. Applied to healthcare, I would imagine that we risk slower development of new drugs and devices, lower quality service from doctors and nurses, and shortages of drugs and devices.
I hate to be the conspiracy theorist, but I can't help but think that's the truth.
This is not a secret, and not really a conspiracy; the groups that make money from the current system are always the ones opposed to change. It just sucks because there aren't nearly as many of them as the rest of us, but they just have more to lose than the rest of us have to gain - a classic example of concentrated benefits and diffuse costs.
Also, scramble out of the country.... where? There are very few places they can 'run off to' that don't already have a single payer health care system. People don't seem to be 'fleeing' those countries.
That's economics 101.
Some taxes maybe? The whole "mandate vs. tax" argument was at the core of the opposition to the Affordable Care Act. I would argue that this issue is not decided by a long shot and a great deal of people are still upset by this.
Further, this article addresses aggregate costs but doesn't acknowledge that costs of the change to single payer will impact people in much different ways. Some folks will be asked to pay a lot MORE, and some will be asked to pay LESS, and it may settle out to be cheaper in aggregate, but cheaper to whom? These impacts (especially felt in the short term) need to be considered and mitigated.
I would argue that this issue is not decided by a long shot
No, there's no perfect solution, but there must be a balance of market forces and semi-trustworthy regulators to make it work.
If I understand correctly the biggest savings come from the mandatory nature of the coverage - everybody is covered at least partially by the State, + employees by their employers, + private offers for the others + universal coverage for immigrants and the most destitute. Risk is shared between the healthy and sick people, and prevention can be maximized.
There are pretty well graspable differences.
Germany has both private and public krankenkasse-s (sick people funds, so healthcare insurance providers).
The UK has NHS, a big public insurance system.
And so on.
The economics are pretty well understood, so like climate change, it's not 100%, because it's big and complex as fuck, but a lot more certain, than a 50-50 coin flip.
Of course people will have to still pay. The question is, what's the fair amount to ask from people. And it seems a progressive healthcare tax would be fair.
If you have no work, there is an universal healthcare to cover you, but you cannot get fancy glasses or good tooth implant.
The prices are regulated by deciding the amount reimbursed by the national healthcare for each medical act. The private healthcare reimbursement are based on these prices. Doctors are free to ask more money, but you are going to pay the delta.
Savings are mainly achieved by having both sick and healthy people paying. Also, the fact that any medical treatment is basically free encourages you to see your doctor everytime you are beginning to be sick, preventing complications leading to a stay in hospital.
Note also that many private healthcare are mutual insurance which are lowering the rates if there is a profit.
http://www.latimes.com/politics/la-pol-sac-road-funding-prob...
Plus if I don't play well with others the government will take away my license so I can't drive anymore. I don't want the government standing between me and healthcare in any sense of the term. If they are the ones in charge of a limited resource that means they are also the ones that have to say 'no' when there isn't enough to go around.
>California’s reliance on gas taxes to repair its transportation network is becoming less and less tenable. Increased fuel economy standards have led to less spending on gasoline
Why stop at saying it's a funding problem? (Allegedly) Obstructionist Republicans won't allow the government to react to changing conditions to update laws needed to fix the funding problem.
CA infrastructure doesn't have a funding problem. It has a spending problem.
https://itunes.apple.com/us/podcast/common-sense-with-dan-ca...
> The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers.
I agree these objections are not relevant for the overall system. But certain individuals and groups within the current system will get screwed.
The wealthy and upper middle-class will oppose any tax increases, as it will decrease their take-home income. Plus the resentment of having to pay for someone else (the moochers).
Providers will oppose any haircut that comes with single-payer rates and price controls. No more millionaire doctors, specialists, or dentists.
And of course the overhead of health insurance middle-men and the huge administrative bureaucracy costs.
This is the crux of the problem. We could have a reasonably good system for everyone. But it requires a lot of people with heavily vested interests into a less ideal situation.
Of course, having to pay taxes is itself a mandate of a sort, but it’s one the electorate has largely come to terms with. Apart from fringe groups that denounce all taxation as theft, most people understand that our entire system would collapse if tax payments were purely voluntary."
Seriously? This is the argumentation from someone that has absolutely no idea what the other side is thinking.
Highways? Defense? Education? National parks?
Why would single payer health care be the exception?
It blows my mind that health is treated differently. It seems to me a lot of middle-America mistakenly assumes it's socialist, which single provider is. Single-payer is similar to most systems we already enjoy. It's the only way prices will come down. You need negotiating leverage and a single-payer system that a majority of your population uses is the only way to have that kind of leverage over drug companies and healthcare providers.
Single payer universal healthcare with more expensive private plans (for those who can afford) is the only system that can come close to fixing the broken healthcare system in this country.
> Voters need to understand that this cost objection is specious. That’s because, as experience in many countries has demonstrated, the total cost of providing health coverage under the single-payer approach is actually substantially lower than under the current system in the United States.
Not a valid comparison. They literally give examples of three liberal states where there were cost concerns. And the response? It is not to compare to states where single payer actually worked, bit compare it to different countries with widely different budgets and levels of centralization from medical research, medical school to employment of doctors. Just not a valid comparison at all.
> It is a bedrock economic principle that if we can find a way to do something more efficiently, it’s possible for everyone to come out ahead.
Useless fluff statement
> By analogy, suppose that your state’s government took over road maintenance from the county governments within it, in the process reducing total maintenance costs by 30 percent. Your state taxes would obviously have to go up under this arrangement
How is this an "obvious " point? Need some justification for this very important point !
Hence this statement doesn't follow as the premise is not established
> Likewise, it makes no sense to oppose single-payer on the grounds that it would require additional tax revenue.
.
> One is that administrative costs average only about 2 percent of total expenses under a single-payer program like Medicare, less than one-sixth the corresponding percentage for many private insurers. Single-payer systems also spend virtually nothing on competitive advertising, which can account for more than 15 percent of total expenses for private insurers.
Finally, some relevant fact and justified points. These are good points in favor of single payer.
> The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers
Ah this is infuriating. The link compares USA to other countries. Why not given evidence of Medicare compared to private insurers? That would be such a strong point in favor of Medicare. I just don't think you can compare the entirety of the American healthcare system to other countries without controlling for the wide disparity in the systems as mentioned above.
> In 2012, for example, the average cost of coronary bypass surgery was more than $73,000 in the United States but less than $23,000 in France
Sad reality but again this comparison is meaningless without controlling. Why not compare states with single payer with states that don't have it? Or why not compare Medicare bypass surgeries with those of private? If none of those support the argument for single payer, then at least control for the variables when comparing countries... Otherwise the comparison is just lazy (or worse, just narrative building ).
> In short, the evidence is clear that single-payer delivers quality care at significantly lower cost than the current American hybrid system. It thus makes no sense to reject single-payer on the grounds that it would require higher tax revenues. That’s true, of course, but it’s an irrelevant objection.
I agree with this point, I am willing to take a higher tax hit to support single payer but the tax question is not an irrelevant object at all!
Anyway, sorry if I sound bitter. I really want to see the US have a robust single payer system that respects it's ability to innovate with drugs and provide great healthcare to everyone. I just hope defenders of single payer (especially economics professors like the author ) can build a better case for it. I hope.
If Medicare covered the same set of people as private insurers it might be a good comparison. However in the U.S. Medicare currently covers certain groups (elderly, disabled) that have very different profiles from most private insurance customers.
There's also the tough questions, such as who gets access to the best doctors, at the best hospitals?
[1] https://www.usatoday.com/story/news/nation/2013/06/18/unnece...
I'm talking about sinuses so collapsed they couldn't be scoped so the ENT Dr just assumed they were fine.
Another point: health care outcomes are better in Canada. There may be more than just health care working there (ie, lower obesity), but it's worth noting.
Once my mother in law was given nitro and told to come back in a week, we went to a different hospital later that night after symptoms reappeared and then they did a test and she had open heart surgery that night.
I have no idea how life is when you rely on an insurance company to approve of your level of care. That sounds like a nightmare.
Wish there was something in the middle where you paid a little bit but had choice.