Medicare for All – How Can We Pay for It? | Hacker News Reader

Medicare for All – How Can We Pay for It?

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On our current trajectory, "who pays" isn't the most pressing issue. Suppose Medicare for All does save 10% as the article claims, if the cost just keeps rising then it only buys a little more time before no entity can foot the bill.

100 million people in the US have diabetes or pre-diabetes according to the CDC.[1] Diabetes costs $14,000/yr(?) and people are getting it at an earlier age and living longer. Of all the threats to the US, this one is particularly insidious.

There is also the concern that big pharma (along with big-sugar/corn) has too much influence over congress. The U.S. is the only country besides NZ to allow direct to consumer drug advertisement. That fact alone makes me lose faith in the government. Is it prudent to give more power and money to our government when they appear to be complicit and bereft of root cause solutions to address the rising cost ? Bloomberg, as NYC's mayor, seemed like the only politician who was willing to pass unpopular and extreme legislation by way of banning or limiting certain foods.

[1] https://www.cdc.gov/media/releases/2017/p0718-diabetes-repor...

But the US current system has afiak by far the highest rate of healthcare cost inflation. Single payer systems tend to inflate at less cost than the US one, so it is a win win.

As a tangent, I do think it's increasingly obvious that T2D (and metabolic syndrome) is a disease that's specific to the modern western diet and that lifestyle interventions are very effective at stopping or reversing T2D entirely.

Here's a recent publication on a controlled study being done by Virta Health et al. Of especial interest will be Fig 3 showing just how effective carbohydrate restriction was vs "usual care": https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6194375/

IDF has also recently published case studies on the effectiveness of intermittent fasting as T2D treatment for those that can't/won't carb restrict: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6194375/

To expand on the costs a bit, the ADA has similar estimates, and in their 2018 report [1] estimates $16.75K/ppy costs (also cited by the CDC [2]), with direct+indirect costs estimated at $327B/yr, and that 1/7th of every health-care dollar is spent on diabetes-related costs. The Milken Institute [3] recently published a report on American Obesity [4] that gives even bigger numbers: "chronic diseases driven by the risk factor of obesity and overweight accounted for $480.7 billion in direct health care costs in the U.S., with an additional $1.24 trillion in indirect costs due to lost economic productivity."

[1] http://www.diabetes.org/advocacy/news-events/cost-of-diabete...

[2] https://www.cdc.gov/diabetes/diabetesatwork/plan/costs.html

[3] https://en.wikipedia.org/wiki/Milken_Institute

[4] https://www.milkeninstitute.org/publications/view/944

> So we say by shifting everything to a single-payer system, with the government being the Medicare equivalent for everybody, we’re going to get about 9 percent savings for the whole system. Then we say, well, in Europe, on average they pay 50 percent less for drugs than we do. And we say, OK, well, we’ll take a more conservative number. We’ll say 40 percent less as opposed to 50 percent less.

Cutting reimbursements for drugs by 40% is going to have impacts on everything from R&D to what drugs are available. Drug companies median profit margin varies widely but its about on average 12-14% [0]. I don't think you can just wave a magic wand and say now you get 40% less and you'll just deal with it. It's also naive to believe you can just export some reimbursement model from another country to the US and just plug and play.

> That gives us 6 percent total savings in the system. Then we say Medicare rates for all providers, all doctors, hospitals, dentists. Everybody gets the Medicare rate. And that saves about 7 percent savings for the system cost.

Same problem here. Paying doctors and hospitals 7% less will have an impact. Prices aren't just some arbitrary number you can change on a whim and have no effect.

> And then finally we have high levels of inefficiency with so-called doctor-induced demand, where there’s too many procedures using high tech when you don’t need it, because they can charge more.

This is just a change from bottom up (doctor) to top down (some medicare committee). I agree that there is a problem with over-treatment but I'm skeptical that a rule based system would be the ideal way to address this problem.

> And there’s fraud. And so there’s a lot of estimates at very high levels of fraud and excessive costs. We took that service delivery savings as modest, maybe 1 to 2 percent. Add them all up, you get 19 percent savings.

Traditionally government services are more susceptible to fraud as there is less of an incentive to address fraud. I'm not sure why a single federal agency would be more effective at rooting out fraud than smaller private insurers.

Overall I'm skeptical of a top down approach primarily because they mainly address the problem by lowering prices by fiat rather than addressing the systematic issues of high costs.

[0] https://yourbusiness.azcentral.com/average-profit-margin-pha...

If you're the only customer for their businesses, yes you can waive a magic wand and say now you'll get 40% less and deal with it. Especially if you're the government and it's a law. It's like Walmart with their suppliers. If you're the biggest baddest around you can kinda do what you want.

Certainly it will have impacts on R&D but are you suggesting that new drugs won't get created anymore? Don't drugs get created all throughout the EU?

Big drug makers sell internationally so you can't just segment the research like that, EU manufacturers are taking the US market into account when they make investment decisions.

Of course it would be easy to fund drug research publicly, I'm pointing out a flaw in your argument rather than arguing either way on the issue.

Yes, we'll have the Walmart of healthcare. Very inspiring.

We already have that, we’re just paying Whole Foods prices to get it.

Exactly. We're controlled by a handful of pharma/healthcare companies currently. I'd put more faith in the government being on the other side than those companies.

I believe drugs cost significantly less in other countries. I see no reason why research would fall. Companies are not the only ones capable of doing drug research. The Jonas Salk’s of the world mostly do research because it interests them and not because they are looking for millions of dollars in recompense.

I’m not a health care economist and have no expertise in the area but I do know that the following two facts suggests that we can implement a universal single payer healthcare system that is cheaper than our current system.

1. Per capital spending on healthcare in the U.S. far exceeds that of any other nation.

2. We currently have a national healthcare system for members of the military and the elderly.

Is it really hard to imagine that we can implement of a single payer healthcare system that is government run?

> "We currently have a national healthcare system for members of the military..."

I know quite a few veterans of all ages. it's amazing how utterly screwed up in bureaucracy the VA can be. Hiring a lawyer to get treatment isn't uncommon, and I think two acquaintances have have ended up bringing their US congressman in.

While healthcare in the US is way too expensive, I don't think I'd trade my current setup for the VA.

The VA is not military. I specifically said military to avoid talking about the VA. Government sponsored healthcare can certainly be bad but it doesn’t have to be. People on Medicare like it for the most part. They certainly don’t want to be taken off of it.

They like Medicare a lot, actually. More than people with private insurance like their provider.

Yes, but doctors hate Medicare. They have to charge non-Medicare patients more in order to subsidize their low paying Medicare patients. What happens when all patients are Medicare patients?

Doctors (specialists specifically) take a reduction in pay or leave the country for another healthcare market that would maintain their current inflated pay (which doesn’t exist).

They can do what our more courageous laborer brethren did back in the 20th century: Organize and engage in collective bargaining. It's the only way out for the lot of us.

Are we still all supposed to pretend that giant pharmaceutical companies aren’t raking in money hand over fist? Is this like how we have to pretend that if game publishers don’t batter us with always-online, microtransaction-laden cash-grabs, games wouldn’t get made? R&D happens in other countries which don’t run a pump and dump scheme on their citizenry for the benefit of oligarchs. Maybe they’re just more efficient?

Or maybe they don’t have the marketing budget American pharma does. Maybe they depend on America subsidizing global R&D? Maybe it’s time for China to take a turn, if they’re so intent on being top dog.

I think the point is that we can in fact quantify what "money hand over fist" is, exactly. It is a 12% cost increase over zero profit, according to GP. Not the sort of cost savings anyone's looking for.

It's like the oil companies. With the exceptions like Aramco and other national oil companies all have margins something like 6% to 8%. That's the maximum price drop outlawing all that "hand over first money" can bring.

> Maybe it’s time for China to take a turn, if they’re so intent on being top dog.

1) if there's one great example of a closed and fully regulated market, it's the drugs market.

2) They're doing it illegally already (which also means they're poisoning thousands of Americans to death, of course mostly with full permission of said Americans). Also when it comes to widely known drugs people really want ... it's not ibuprofen we're talking about, it's strong pain meds and illegal drugs.

> Maybe they’re just more efficient?

How about you answer a question of mine: your solution to the problems in the most regulated market on earth failing to perform is just-a-little-more regulation. Wanna bet it won't work ?

Second: save money on healthcare ? Easy ! Here's your choices:

1) don't cover really old age and/or exceptional problems (let's call this -for unspecified reasons- the European approach). Sucks for quite a few patients in total, but not that many, really, let's say 2% or so. Outlawed in the US. Generally speaking, this sucks pretty bad if you've got an uncommon cancer, and if you get to 80 years old or so, this becomes more and more likely to happen to you. Also you could consider outlawing a few your-own-damn-fault treatments (like lung cancer for chainsmokers).

2) don't cover everyone, and by not everyone at the very least include everyone who won't take care of themselves very well (effectively more or less the poor). Also we don't mean 1%, we mean like 20-40%. You can cover them for trivial problems without issue, but not in general.

3) don't take responsibility for patient outcomes. This one is more complex, but it is another great and costly difference between US and European health systems. Essentially a doctor fucks you over in the EU ? You've got zero recourse, unless the doctor was actively trying to kill you (and even then). Medication solves your headache but kills your liver ? You don't get treatment for that paid, again EU rules.

4) there are many things you can do to make healthcare cheaper. Starting with making becoming a doctor cheaper. Fix the education problem the healthcare system has. (e.g. https://news.ycombinator.com/item?id=18831524 on this very site seems to indicate there's a problem here)

Without a combination of the above (with 1) the clear champion of cost savings), there's nothing to do. So which do you want to do ?

Simplifying this to yet another communism/capitalism discussion ... I mean sure ... everybody does for everything these days ... but not going to get us anywhere. Those are organizing systems, they direct which of the above cost saving measures we take. By themselves they mean nothing. Capitalist systems can be much cheaper than communist systems as well as the other way around. It depends on the market they operate in. I mean to say, this is not the problem.

Everything-covered unlimited healthcare for all is not something we can do. Sucks, but it just isn't.

I don't understand why there's so much resistance to having everybody save a huge amount of money while at the same time allowing everybody to be healthier. Boggles the mind.

It's not as lucrative for some people that way.

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

Part of it is distrust of government. Part of it is status quo. Part of it is belief they will be worse off in the new system. Part of it is not wanting to have to supliment other's heath care. Those are the real underlying reasons, as far as I can tell.

For me, it's that I can't think of anything the government really does a good job at while also controlling costs.

Really? For the most part, the government is pretty functional at all levels and while costs generally rise it seems like they do less so than compared to the privatized version.

I'm sure there are many cases where they do a bad job and costs rise, but I'd imagine the things government has done well and that keep costs somewhat okay far outweighs it and I also imagine you never hear about 99% of the stuff where things are humming along.

The good news is that government only needs to keep costs lower than the private system. That doesn't require a good job of controlling costs.

Because nobody credible is claiming that everyone will save money. Reports vary, some show savings some show cost increases.

I don’t understand the reasoning / appeal of a new national sales tax for half of the new funding, as opposed to making this financed through payroll taxes exclusively. Maybe it’s to emphasize the 8% cost savings right off the bat to get private companies on board, but man, solving the escalating cost problem is a gift on its own. And we have already done the dance of trickle down, how about we directly deliver cost relief to the worker one time...

I don't really wanna defend it but I'll try. If it's payroll taxes then it's only workers paying, but financed partially by sales tax broadens the base to include trust fund babies as well as retirees and public aid recipients.

There is no problem paying for Medicare for All. The US federal government does not face an affordability constraint in dollars. It can pay for anything it wants, the only real constraint is inflation.

https://www.forbes.com/sites/francescoppola/2018/04/17/every... https://www.nytimes.com/2017/10/05/opinion/deficit-tax-cuts-...

MMT is largely nonsense, sorry. Inflation would be the immediate result of such a policy and would largely destroy the spending ability of such money printing.

No such thing as a free lunch.

"MMT is largely nonsense, sorry."

You have not rebutted any content in either of the articles I posted.

"Inflation would be the immediate result"

I said that inflation is a risk, as does every MMTer. The conversation we should be having is "how much inflation is really at risk here?" And inflation has been, in fact, quite elusive for a long time. A bit of inflation would be a good thing.

"such a policy"

What policy? MMT is not a policy, it's a description of the way the economic system already functions. It's an explanation of why the Federal Reserve can engage in $4 trillion of QE and not cause inflation to budge. It's an explanation of why the US federal government can run $1 trillion annual deficits and not cause interest rates to skyrocket. It's most definitely not nonsense.

"No such thing as a free lunch"

It's not free. The government is paying for it, and will later collect that money back in tax revenues. That's the way the government buys anything.

The first is just saying you can borrow as long as nominal growth exceeds the interest you need to pay. Sure, but that doesn't mean you can borrow an infinite amount, since as you borrow more interest will rise.

"What policy" you're advocating for printing money to spend regardless of the cost, which means costs will certainly rise.

If you want to have the "is the current inflation target optimal, or should we have a higher one" debate, don't pollute it by implying that spending doesn't matter. I agree the with the second article that the risk is inflation, not bankruptcy, but that doesn't mean it's not a real risk or that we should have larger deficits.

Of course spending matters. MMT is in agreement. Here's the main public advocate of MMT tweeting that:

https://twitter.com/stephaniekelton/status/10443137336008744...

Before we continue this discussion, you need to define "printing money". Because I will provide the definition: in the MMT worldview, printing money is synonymous with government deficit spending. Can we agree on that definition?

Ok, then inflation is a controllable problem. Because what I'm suggesting is increasing government spending to pay for Medicare. That's like... pushing on a gas pedal. It can create inflation. Now, there are 2 ways to deal with inflation:

1) Stop pushing on the gas pedal. Cut spending. 2) Raise taxes. That's like pushing on the brakes. Because my definition of "printing money" is "deficit spending", and raising taxes lowers the deficit.

So we shouldn't be afraid of inflation, because it is something we can control. And if we start by spending first on Medicare, and then taxing later to control inflation... then we've stabilized the size of the deficit while growing the overall size of the federal government budget. And there's Medicare for All.

No, you can print money without spending. Central bank is independent.

I'm not sure what we are really arguing about at this point.

I'm claiming that the government would increase deficit spending to pay for Medicare For All.

If you want to discuss the impact of having a larger government deficit, I would agree with you that inflation is the potential risk. We can have that discussion. I'm probably more optimistic about the risk of inflation and the effectiveness of mechanisms for controlling inflation.

If you want to discuss government debt default risk for a country that prints its own currency, MMT and many mainstream economists says it is zero.

If you want to discuss technical constraints on the size of the deficit for a country that prints its own currency (through mechanisms like bond vigilantes, etc) MMT would say there is no constraint. There is plenty of evidence to support this. Just look at what's happening with the US federal government deficit right now.

If you want to discuss what fraction of GDP is appropriate for government spending, that's an interesting conversation and would be curious to hear your thoughts.

Central banks are a necessary mechanism, as you point out, and need to do their job well. But the main questions in this debate are around fiscal policy, not monetary policy.

That's a little better explanation than, "The US federal government does not face an affordability constraint in dollars. It can pay for anything it wants..."

Are we supposed to believe a report issued at the Sanders Institute Gathering represents an unbiased evaluation of Bernie Sanders' health plan?

Would it be that hard of a stretch to convince people that a healthy population is more important and productive than how much you trust your neighbor’s work ethic and role in a darwinism nightmare?

It's pretty simple, through taxes. Most of the tax we would pay would be akin to the premiums we pay for private insurance... remember that we already pay medicaid and medicare taxes now.

The US pays more as a percentage of GDP for Medicaid/Medicare/Veterans healthcare than the UK spends on the entire NHS (which covers 100% of people).

This is often overlooked in the health care debate. If the US paid European prices for health care, the government could give everyone free healthcare without raising taxes at all.

I think they could lower taxes. [1]

1: Citation needed

Defund the military.

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