This article is a breath of fresh air that I'm glad is now on the record at SB. It's long been exhausting to listen to broad, vague, pie in the sky demands for universal healthcare, without covering sufficient details as to how it's going to happen given the current facts on the ground.
Obviously, as this is coming from me, the rent seeking much be attacked, including via the avenues Matt listed. Steadily expanding the fringes of public coverage is also sensible. A public option to opt into would be more ambitious but I think doable if that ambition starts off limited. Bore slowly, but nonetheless bore.
The public option is the key. If insurance companies are bloated rent seekers, the government can beat them on price and quality. If the government can’t beat insurance companies on price and quality, then private insurers are useful.
I would be curious to see how things work in those states with my concerns about how taxpayers would handle bailing them out, so I'm glad they're trying it - the good side of federalism!
If the Democrats want "like a health insurance company, but run by smart, humane, well-intentioned people like us" they don't need to wait for a Democratic trifecta. They can set up that non-profit insurance company right now. Get some of the millionaires and billionaires who were on stage at the DNC to give the seed money. Put Elizabeth Warren and Ocasio-Cortez on the board and dictate that a majority of board members need to have been elected in D+10 districts to make sure only moral people run the company. Start the business in a few blue states where patients are smarter and wiser, y'know, like us.
Because there are no profits -- the scourge of the American health industry -- this company will blow everyone else out of the water. They'll grow like gangbusters and get more patients and go to more states and just repeat the cycle until everyone else is just out of business.
I'm really interested in Cuban's Cost Plus Drugs model and wonder if he or that approach could expand to insurance. But totally with you on the general idea --to just to build it. I've been in a 4 year argument with Jesse Itzler over his cereal additives "activism". Just go start a company and win share. He's started like 8 other ones.
The main attraction of government employment is stability. The main attraction of joining. start up is a punchers chance of being rich. Asking people to invest their heart and soul in a startup and not want to get rich is naive.
Well, this company is run by well-meaning moral people, so they can just create worker protections like civil-service protections.
And, obviously, the workstaff would be unionized. Not that it's necessary, but we wouldn't have it any other way.
The company is basically guaranteed to last forever, since there's no CEO cutting a bunch of costs in one quarter to get a bonus only to blow up the company the next quarter. It's run by the best and the brightest, with no Wall Street greed. The people who provided the seed money weren't doing it to get rich. They will get it back in 5 to 10 years at a modest rate of return. They are Democrats, not greedy jerks trying to profit off other people's suffering.
There is a place for this type of thinking— government should pay for med school and pay med students a reasonable stipend in exchange for X years of work at whatever salary military doctors make. The key is offering the stability of government employment.
Only to avoid paying taxes. The ones that continue to exist and don’t fail or merge are usually the ones who have built up huge reserves on their balance sheet or in small communities are subsided by wealthy donors.
The market success of a health insurance company is almost entirely tied to its dominance: how many patients does it have, so it can force price changes on providers. You could reach into Plato's Cave and create the most efficiently-run small insurer possible tomorrow, and it will still get destroyed by a highly-inefficient competitor with gigantic market dominance.
My big concern would be, what if the public option starts losing money because it over promises? Will that force them to raise prices or it will it start getting tax support and having hidden costs?
Do we mandate that it has to maintain a profit (but give it a pre-set buffer fund in case there's a rash of claims one year before it raises prices?)
How about we mandate sufficiently transparent accounting from government-funded medical service providers so that we, the tax-paying public, at least know where the money is going and can develop ever more targeted regulations to eliminate rent-seeking?
Moreover, the investment industry would love to know where unreasonably large margins are accumulating (i.e., rent-seeking). Similar to Walmart’s and Amazon’s disruption of insufficiently differentiated independent retailers, we can count on ever more innovation to manage out the waste. Eg, I've heard that the private equity industry is currently attempting to roll up various general practitioners in medical, dental, and vision so that they can get increasingly more leverage over their fixed costs; notably by introducing technology to substitute for inefficiently allocated resources.
My concern isn't rent-seeking, but I think moral hazard.
If the state insurer knows it will be bailed out it can of course undercut the private insurers, but it won't actually be cheaper. (If it charges 9% lower premiums, but the insurance normal profit margin is 9% then it doesn't have to worry if something goes wrong)
That said, I would absolutely support that transparency, and especially if that happens in a few states trying it it lets all of us, even those not in those states, look into it.
Yes, but at least taxpayers would know how much is being spent through taxes versus individual contributions for consuming the service. Additionally, academic-like research could use privileged data on consumption patterns to identify cases of moral hazard. This could help establish regulations similar to those for pre-existing conditions. Moreover, instead of fully excluding individuals from treatment, we could simply limit publicly funded options to those deemed sufficiently beneficial based on certain decisions.
These regulations could evolve through political processes to reflect voter preferences. For example, fewer lung cancer treatment options might be offered to smokers than to non-smokers, with these options narrowing further over time. Cutoff dates based on birth year could also be introduced, especially as public awareness grows about the risks of certain lifestyle choices.
"These regulations could evolve through political processes to reflect voter preferences. For example, fewer lung cancer treatment options might be offered to smokers than to non-smokers, with these options narrowing further over time."
I had not thought about that as an _advantage_ of the public option given complaints about rationing etc in other countries. If the public option isn't the only one then I'm legitimately not sure whether it will be an advantage or disadvantage.
"Stop nannying me" vs. "Stop wasting money on poor decisions"
Maybe the transparency will at least improve our debates on this.
"How about we mandate sufficiently transparent accounting from government-funded medical service providers so that we, the tax-paying public, at least know where the money is going and can develop ever more targeted regulations to eliminate rent-seeking?"
We don't do that now. The Pentagon (i.e. military) has failed every financial audit that has ever been attempted on it.
Yes, but private providers are already incentivized to get the accounting correct. Moreover we already have regulations that require sufficiently sophisticated accounting from sufficiently large companies. Eg, GAAP.
We could mandate a sufficiently detailed and rigorous accounting for any medical service paid for by public funds. Moreover, we could also ban price discrimination and thereby ensure we're not getting a subsidy by simply charging private insurance more. I believe that such a subsidy is already alleged.
I think that its unlikely that the government will be able to do both. They are very likely to be able to win on price simply because they can use price controls as Biden started with certain drugs. But that is usually going to decrease the quality of experience.
We already have examples with the VA and Tricare. Tricare, for example, saves a lot of money because it is an insurer of last resort and it has medical providers that are not paid via a fee-for service system. And uniformed providers are also legally insulated from malpractice and other types of lawsuits.
I’ve tried, unsuccessfully, to find accurate per-beneficiary numbers. The Tricare program cost is about $6k per covered beneficiary, but that doesn’t include a lot of spending such as provider salaries for those the government directly employs, nor does it include copays.
The success of the public option is going to depend on its market dominance. Single-payer national healthcare works well at keeping costs low, because it has the market power to force providers and pharma companies to accept lower revenue. Medicare works well because it's enormous. A tiny public option is going to get systematically outcompeted in the market: private insurers will dump the least-profitable patients onto it and providers won't change their prices. This is health insurance 101.
I’m amazed at how surface-level the discourse about this topic is, and I’m glad Matt is noting some of that.
On the left, M4A is basically the counterpart of DOGE on the right. Surely, it’ll make things cheaper by eliminating “waste,” right? And “anti-competitive” practices? (Ok fine, this isn’t quite as stupid, but I do think there’s some magical thinking here.)
We should instead start with an accounting of why healthcare is so expensive. Do insurers have a ton of market power? Do hospitals? Is it just labor costs?
Absent evidence that insurers/hospitals are making huge profits, I’m starting to suspect that it’s just that doctors/nurses cost a lot. Even if they don’t “deserve” it, if the government steps in to curb wages, the doctors will just go be lawyers instead. Skilled labor in the US is going to be expensive absent a communist revolution.
Wanted to add two other things to the "why is it so expensive?" list.
1) Health care inflation is partly a function of genuine innovation, by which I mean that over time you pay more money AND you get better outcomes for your more money. Like, you can just straight up spend extra money today on treatments that didn't exist fifty years ago, and those treatments really will improve your health, but they really do cost money.
A great example is Hepatitis C. The course of meds for Hep C is billed at tens of thousands of dollars, but they really will cure you, and Hep C really can kill you. No amount of money spent by the richest person in the world fifty years ago would have achieved that outcome. BUT that doesn't mean that Hep C treatment should cost tens of thousands of dollars--the price of the meds is a function of all kinds of other aspects of our system, some number of which are dysfunctional.
2) A lot of the dysfunction in health care pricing is downstream of the plain fact that healthcare does not actually make sense as a service provided in a traditional market. Like, just to take some obvious examples, no one should ever treat (1) dying people--they are really bad about not paying their bills--or (2) old people--they die with unexpected speed, becoming (1)...or (3) people with addiction issues.
Of course, if you eliminated those three categories of people, you would reduce the population of my own critical care unit by 95%.
I'm not necessarily saying this as an argument for M4A or communism or whatever. I think that in some ways markets are really good tools for managing scarce resources, and our whole system is constructed in the larger context of a capitalist system. I don't think you can escape those realities.
But health care is just a square peg that we are trying to fit in the round hole of our larger economy, and that is necessarily going to produce a lot of dysfunction. If you can't recognize that at the outset, your attempt to solve the problems is going to be pretty badly handicapped.
Health care economics is a genuinely wicked set of interconnected problems.
"BUT that doesn't mean that Hep C treatment should cost tens of thousands of dollars"
New drugs need to make a LOT of money. Those new drugs don't just have to pay for all the R&D and testing for themselves they need to pay for ALL the drugs that don't pan out. I'm a biotech investor myself. I've had a number of companies go to zero. That means the few that works need to deliver massive returns.
Not that I necessarily agree with them, but there were particular beefs specifically about who paid for development of the Hep C treatment and then who got to monetize it.
I said on a different substack that if there's any place we should waste health care dollars, it's on pharma research. Every new molecule adds to humanity's knowledge. I don't know what molecules we'll have 50 years from now but they're going to be pretty awesome.
Yeah. In my perfect world (which does not and never will exist), we would actually blow a lot more money on pharma research, but the process would be less market-based. Historically speaking, a lot of pharma / molecular research is quasi-luck-based; you really do benefit from brute-force throwing more spaghetti at the wall.
But some of the areas where we should be throwing more spaghett just don't make much sense in the context of a market-based approach. Malaria is the classic one, but you can basically insert any disease of poverty, here: the defining quality of poor people is that they don't have money, including for your malaria treatment. It makes no economic sense to treat them. But it also applies to a lot of public health questions; the reason mRNA vaccine tech wasn't adopted until Covid is that it was a total loser, from a sales standpoint. There is very little money in vaccination, even though the societal benefits are enormous.
So if anyone ever makes me king of the world, we are going to blow an incredible amount of money on pharma research, but realistically speaking, a lot of that spending just doesn't pencil out, in a pure market-econ 101 sense.
Agreed. I would spend a LOT more money on pharma research. But I also I'm also fine with outsized monopoly profits due to patents (for a limited time of course).
for example, I would drop 100 billion a year on anti-aging research where we focused on increasing healthspan not just lifespan. We need people to be able to live and work longer so Medicare/SS doesn't go broke
I mean, yes and no: yes, drug development requires funding, but no, therapeutic pricing is not the only way to do it.
You could imagine a lot of alternative ways to fund drug development--just as one example, I would point you to Tyler Cowen and Alex Tabbarok's advocacy for a prize-based system; if you got a billion dollar payout for bringing a Hep C treatment to market, a lot of people would be incentivized to attempt that activity.
I'm not saying this is the "best" way; there are a lot of proposals floating around in this space, and I think several of them have merit. But the bottom line is that there are multiple ways to achieve innovation. I wrote about nuclear issues back when I was an academic, and here's the thing about fission bombs: the R&D was not amortized by selling fission bombs on the market. It is absolutely possible to pay for innovation in lots of different ways. Those are policy decisions. We argue over and make then in the context of politics (and economics, and culture, and a dozen other things), just like everything else.
But assuming that the system "has" to look or work this way or that way is silly. The price of Hep C drugs was not handed down by God on tablets of stone. It was the product of a bunch of complicated negotiations and choices within a system that both arose organically from and was created by the choices of humans.
The cost of labor is definitely a big piece of it. Skilled labor is extremely expensive, as we all know, and medical care is extremely labor intensive. I think that any successful effort to bring down costs in the U.S. is going to involve tackling the labor issues, and it will be very thorny.
I'll sign onto any proposal to force down doctor wages, but it's likely to be a political loser. Just a week ago an attempt to force down anesthesiologists got whiplashed so hard people are scared (maybe even for their own personal safety) to try again.
But what I don’t get is that even if the government somehow managed to put a cap on wages, won’t would-be doctors just go and become quants or lawyers instead? It seems to me like there would at least be a decline in doctor quality (which people may or may not be willing to accept, I don’t know).
And the things associated with artificially constrained supply are the things that make life hell for young doctors (insanely long shifts during residency, etc.).
Right. But suppose supply is constrained at X and wages are suppressed. The quantity supplied will stay at X, but won't those X doctors be different, lower-quality candidates? (Assuming talented doctors could go do something else that makes a lot of money, which seems likely to me.)
Nobody is going into medicine just for the money anyways, you spend your 20s in training and your 30s paying off loans. I guess maybe your actual worry is current doctors deciding to retire early, or just opting out of insurance altogether and only taking rich patients that can pay out of pocket (I feel like this might be happening in some countries with public health insurance).
This, plus the other objections raised below, plus some other stuff, are what I mean by "very thorny." I think it will be a genuinely difficult problem, both politically and economically.
I think the mistake is thinking this is largely a problem that the right "experts" in government can manage and fix.
Instead I think the solution is two fold, making sure there is competition, and focus on increasing supply faster than demand. Then you let the magic of markets and competition bring down costs (just like it does for elective stuff like plastic surgery)
To ensure competition, you need to mandate pricing transparency. IMHO, that means not letting providers charge different prices depending on who's paying. Cash, insurers, and government should all get the same price. Next mandate that you post it online.
Now you have price transparency, so consumers can actually shop around.
Then focus on increasing supply, removing residency caps, making it easier to doctors trained elsewhere to immigrate and practice. Making sure rules on who can provide care aren't just protectionist rent seeking. Get rid of certificate of need requirements etc.
Are they? When I google it looks like hospitals really aren't making profits. They have tiny or negative profit margins.
It's certainly possible they pay exorbitant salaries and then have tiny profit margins.
Medical offices typically have profit margins around 45%(also from a quick google), which seems huge. But... if those are owned by a doctor and most of that profit is actually the doctor's "salary" then it's hard to say whether that's actually vastly more profit than a hospital or not.
Here's some data. The largest publicly traded hospital network (HCA) is running 7% net margins. UnitedHealthcare (UNH) is running at 4%. Walmart is running at 2.4%. So IDK on either account. I don't think anyone is making "huge profits" anywhere in healthcare. If they did, it'd just attract competition.
maybe. That said being a larger hospital system is a huge help in negotiating with insurance companies, presumably there is a flywheel effect where you need to get a good reputation to get good payment rates but can;t afford to pay highly regarded providers without already negotiating the good rates.
This statement, as a global claim, is not true in any meaningful sense of the word.
Some hospitals are making okay profits. Rural hospitals are making no profits. Some actors within hospitals are making enormous profits, insofar as their salary is de facto a "profit" for the individual who receives it (which I think is how you should think about it).
But any attempt to fix health care by attacking the "huge profits" of "hospitals," as a general class of entity, is utterly doomed because it simplifies the problem to the point of incoherence, producing nonsense solutions.
Yes. Also, some nice old school healthcare wonkery warms the cockles of my heart.
EDIT: I'll add (not to be Debbie Downer, but it needs to be said), that turning any such discussions into legislation awaits the next Democratic Trifecta. When's the earliest that could possibly happen, 2029 if things go better than expected for Democrats? 2031? Sigh. The lessening of my worries about the state of American democracy under Trump is directly inverse to my growing disquiet regarding the likely policy awfulness of the next four years.
oh, another chance for me to remind people that Democrats should be thinking about their plan for taking the SENATE. People talk a lot of abstract smack, and I want to see the states they plan to win to get to 60 and the party platform they think will get them there!
You don't need 60 senators for anything. You need 50 senators with a full commitment to abolish the filibuster. The latter is not easy to accomplish, but it is way more plausible than the former. Plus a 60D senate with a filibuster will accomplish way less than a 50D senate without a filibuster.
This is probably true, but it is a nuclear option from the point of view of a lot of Democrats. You get your policies pushed through, but you open it up for Republicans to do the same. I tend to agree with Ezra Klein's take on it that that's good. If you believe in a program or policy, you should be willing to risk your opponents running against it!
I do really like your last point there: 60D with a filibuster will be fractious and milquetoast. 50D without is more unified!
I also want to argue against the idea that abolishing the filibuster would purely make the Senate more partisan. The existence of the modern filibuster means that the opposition party can costlessly sabotage whatever the democratically elected majority of the Senate wants to do. Without the filibuster, if there are 50.5D or 50.5R votes to pass *some* kind of bill on a topic, then the opposition is incentivized to help craft better bipartisan legislation, rather than oppose everything for purely partisan reasons.
And finally, the filibuster doesn't just result in legislative gridlock, it also leaves a power vacuum that gets filled by the other two co-equal branches of government. So the filibuster doesn't even necessarily prevent partisan overreach, it just means the overreach comes via executive actions or jurisprudence, rather than via legislation. (With the fall of the Chevron doctrine, the relative balance will tilt towards jurisprudence, rather than executive action.)
Why do you find it more plausible? I've seen 60 Democratic Senators but I've never see either party eliminate the filibuster, so my simple logic is that getting to 60 is easier. You don't think there are likely 10 Dem holdouts who would keep the filibuster, meaning you'd need another 50 (aka 60 total) anyhow? Filibuster protects a lot of wary Senators from hard votes...
Also, Dems are <50 for 2025, so already you need to think about how to win Senate races in some less friendly states...
There has only been 60 senators caucusing with the same party once since 1978, and even that was very contingent at multiple moments due to the lengthy Norm Coleman/Al Franken recount dispute, and Ted Kennedy's death.
Seriously though, if you're telling me the goal is to find a way to pass Federal policies without getting broad support from the governed, are you SURE we're the good guys?
And despite this historic occurrence of one party having 60+ senators, they barely got anything done due to the filibuster. Somehow all the senators decided by simple majority (via action or inaction) that you suddenly need a 60% majority to pass most legislation.
I will vehemently oppose all efforts to get rid of the filibuster. I don't want one parties half baked ideas. I want compromise legislation. Where both sides are listened to.
Then you want to get rid of the filibuster. The filibuster prevents bipartisan legislation. From my understanding, since reaching 60 votes is functionally impossible, the Senate instead settles for doing most of its legislation via bizarre workarounds like budget reconciliation, and then mostly on party-line votes.
The problem with this argument is that both parties pass stuff with reconciliation all the time. Which only requires 51 votes, or 50 if you have the VP
The policy awfulness of the next four years is likely to make healthcare policy a lot more relevant. We're heading back to the days of pre-existing conditions and $1m lifetime caps (will that even buy you half a chemo treatment in 2026?) Insulin prices are going to go crazy again.
We're going to have a big problem on our hands in 2029 or 2033 and someone is going to need to fix it. The question is *how*. Matt seems to believe that "let's just pass a wonky tax-incentive mess like Obamacare again" is going to be the right policy/political answer. To determine whether that's the right answer, I'd ask the following question: *did that approach work out well last time?*
Is it really true that no reform is possible without a Democrat trifecta?
Maybe instead the solution is to work across the isle for bi-partisan solutions. Biden was able to get several big bills through the filibuster by allowing compromise. I'm sure the same would be possible here.
It's funny to see this is the top comment when I read Matt's post completely differently. The intra-left healthcare fights are the exact opposite of "vague", they are in fact highly technical and detail oriented even though all of the actual implementation details will be highly contingent on the votes available in the Senate and House. If anything, I think Matt is saying that Democrats should be *more* vague rather than less.
I’m genuinely just constantly surprised how fucking stupid people are talking about healthcare policy.
Like the number of my friends who will confidently assert that every other country in the world has a model like the UK or Canada’s is just mind blowing. And if I mention to them something like all payer rate setting as a key piece of most countries healthcare it’s like I’m speaking some weird language. Like all the technocratic stuff you get from reading health reporters is just uninteresting.
What’s especially frustrating is several of the most Sanders’s pilled people I know I met as an English teacher in Korea and thought the system was wonderful . Which I don’t fully understand all the details of but it’s not like that at all.
In fairness, the healthcare system is really hard to understand. My mom works in health insurance (which has also obviously made this bloodthirsty anti insurer rhetoric extra infuriating to me) and the sheer breadth of complexity she deals with daily amazes me. And of course is never accurately contended with in our political discourse on the subject.
I think the riposte from M4A people is that this is one of the selling points of M4A; cutting down the complexity involved. I think the M4A people way oversell this point (figuring out what procedures are worth the cost or not is almost by definition going to be difficult no matter what system you have). But I say oversell, not completely wrong about for a reason.
I’m obviously being facetious here, I actually trust that he has a sound understanding of the healthcare industry and the trade offs around reform. BUT read this explainer about how Vermont’s Medicare for all failed. Sanders seemed pretty checked out and unhelpful in the process of bringing his healthcare policy dream to his own state!
Not only did that end up more expensive than it's backers thought, it's also something that needs to be done federally for the same reasons insurance companies are desperate to avoid a "death spiral" by attracting the sickest patients.
He proposes a level of universal public coverage way out of step with what most countries of the world (many of whom do indeed have universal coverage) covers.
I feel like it’s the obvious implication and the basis of left wing politics: prioritize ensuring wealth/growth is shared by all (especially poorest Americans) even if re-distributive bucket is leaky and will lead to lower growth overall.
What’s closer to Sander’s vision is that he thinks the limited supply of health care should be rationed based on need than income (or ability to pay). The tradeoffs are whether rich people should be told you will get the same level of care as poor people in America and you can’t get ahead in line. That is the thing that countries like Canada are able to pull off and is the thing leftists want implemented. I think they will be ok if level of care is average but is same for everybody rather than a two-tier system where poor people get terrible care/denied care but rich ppl get the best care.
Ppl can disagree politically with leftists (I certainly don’t agree with Jacobin editorial board) but I find ppl pretending that the leftists just don’t understand tradeoffs or Econ extremely stupid. It’s a moral question on how to organize a civilized society, not just a wonky technocratic problem to arrive at the sweet spot.
I think it’s harder to implement Medicare for All on a state level, especially a state like Vermont where approx 20% of the population is above 65. Obv the imp thing about making health insurance work is having enough healthy people to be in the program to socialize the cost for caring for the sick (IMO socializing health care nationally would not just be a transfer from the wealthy to the poor but also a transfer from the healthy to the sick). Vermont’s population is too small, limiting the size of the risk pool. Larger, national systems benefit from economies of scale and can balance risks costs across a diverse population, making it easier to fund and sustain.
Anyway I don’t think health insurance on a national level is that hard to understand, of course there’s no unlimited supply of care. Broadly, it’s whether a country wants to ration that supply of care by need or income. IMO a civilized society should at least have a floor of care guaranteed to everyone.
This is so true. Most people I know believe that Medicare is NHS-style free, universal coverage. They don’t realize it basically mimics private coverage for people who don’t have employers to provide it - there premiums, deductibles, copays, and coverage limits.
What is maddening about Medicare for All is that proponents like to claim that every other country has a system like it, but in fact there is no country on earth that has a system half as generous. They all have limitations.
This isn’t the case in Canada with direct medical care where we ration the care with long wait lists for specialists and procedures (triaged of course) and by not providing enough family doctors to the system.
It is mostly the case with all of the medical needs outside of that envelope (drugs, dental, physio, eye care, etc).
Also, the whole system has degraded especially since the pandemic where it’s definitely affecting outcomes. The system needs some combination of money and reform but people have yet to elect politicians who will significantly effect either of those.
Yes! I have a friend who is very pro single-payer and works in Dem politics, but she herself had an elective tonsillectomy. I can basically guarantee that would never happen under a single-payer system…
They’re not stupid; they’ve been deceived by someone who they trusted and they had a reasonable expectation that he knew what he was talking about. Bernie Sanders has been going around the country for years conflating a bunch of different concepts. Universal health care, which every other developed country has and every Democrat supports, and single payer health care, which only a handful of countries have and is controversial in the Democratic Party. So when someone proposes a plan that resembles the system they have in The Netherlands or Switzerland they’re denounced as a corporate shill.
He also conflates “Medicare” the actual insurance program that exists in the real world and has limited coverage, premiums, copays, and deductibles, with a fantasy version of Medicare that covers everything with nothing out of pocket. So now his supporters think that in every developed country all medical costs are completely covered and the U.S. is an outlier when in fact no one does it like Sanders proposes. And some of the most annoying things health insurance companies do (ie not cover out of network care, not cover every procedure, etc), the government would be doing instead if they were running everything because they’re intrinsic to the problem of providing health coverage, not driven by profit motive.
The underlying premise of his campaigns has essentially been that healthcare is simple and everyone has figured it out, and the only reason anyone would say it’s complicated is because they’re bought off by health insurance companies and they don’t care if you die.
They are stupid, or at least accountable for believing misinformation. It's very easy to either research this stuff in a balanced way, or stay out of the discussion if you don't want to.
>I’m genuinely just constantly surprised how fucking stupid people are talking about healthcare policy.<
In fairness one could write the same words about most every kind of policy. We SBers aren't a very representative bunch, and policy minutiae are boring!
Well, that's seeing one side of the policy-ignorance, but what about the (far more common) complete misconceptions that Americans have about foreign healthcare systems, which are mostly driven by (bad-faith) political propaganda and ideological arguments?
The Canadian system is very different from the UK system is very different from the Australian system, but none of the three are "Communism" or hellish dystopias where people die en masse for lack of available medical appointments. But you could have fooled me, hearing all the Conservative takes on universal healthcare!
I agree that Americans should learn more about the (actually very diverse) variety of universal healthcare systems that are perfectly functional in other countries and have different strengths and weaknesses. I have lived under at least three distinct systems in my adult life and I personally found the two European ones far superior even for a young, healthy man to what I had as a "well-insured" American. But they all had flaws. And every one developed in a local context that isn't necessarily practically or politically transferrable. (I happen to think the Swiss model could be a great one to align toward for Americans, but any change would have to really contend with the massive costs and a lot of winners and losers).
Americans should also learn that their own system isn't a unified thing, either. Even your experience as a private customer of Kaiser Permanente PPO is going to be totally different from that of a UnitedHealthcare insuree (for one thing, you're four times less likely to have your claim denied). And providers are all over the place, in terms of quality, something that never seems to come up when people are cherry-picking the one horror story they heard about an individual medical experience in a Socialized medicine country and compare it with the best possible anecdote about how the best doctor at the best hospital saved their loved one and then the insurers were total princes about covering the whole thing without any mountains of paperwork or shenanigans. A plurality of Americans also relies on some public option for healthcare, too, which offers a whole other menu of options. VA healthcare isn't Medicare isn't Medicaid. Medicare isn't even one thing, as Matt rightfully covered!
So what are we even arguing about and proposing here? It's not either-or. There are a bewildering range of options we could (and have) settled upon.
While what you're saying about American conservatives is correct, in the past few years that I've been living in the US I have heard many many more liberals/progressives/leftists call our systems back in Europe "socialist". Maybe it's because I'm at a highly educated environment and US conservatives are rare overall. I think that both sides of the US political spectrum need to hear that German healthcare isn't run by Stasi.
The Korean system was what they loved. It is pretty great for a bunch of able bodied young college graduates who basically need to get tiny amounts of care.
…especially since Korean doctors are currently on strike, arguing that the Korean government should license fewer physicians; and their medical system is (AIUI) collapsing in consequence.
I think what’s closer to Sander’s vision is that he thinks the limited supply of health care should be rationed based on need than income (or ability to pay). The tradeoffs are whether rich people should be told you will get the same level of care as poor people in America. That is the thing that countries like Canada are able to pull off and is the thing leftists want implemented. I think they will be ok if level of care is average but is same for everybody rather than a two-tier system where poor people get terrible care but rich ppl get the best care.
I think if you look at the whole list of countries which do this you don’t find a dogmatic anti private insurance consistency. We find much more variance and probably the common theme isnt really single payer but price controls and provision for the poor.
Personally I think employment healthcare is more pernicious than health insurance companies. If I could get rid of one thing, it would be forcing people on employment healthcare to get on a public system. The cycle of one gets cancer, but one can’t leave job now because healthcare is tied up in job, so one goes medically bankrupt is the most dangerous loop. Your boss shouldn’t be holding you hostage.
However, my main contention is that reducing optionality, forcing people to buy in is an important aspect of making socialized medicine actually work. If you have a system where only sick people opt in and young people (who are healthy) just don’t participate, system can’t work. Or if rich people just opt out and all the best doctors leave the public system, again it won’t work. An air tight system where healthy people are forced to buy-in and rich people can’t leave is VERY important to ensure socialized medicine runs smoothly.
From my comment elsewhere:
“Directionally I agree with Sanders on this more than any other Dem. Especially more than I do with Elizabeth Warren. Warren had a proposal where she taxed very rich people more to fund Medicare for All somehow without raising taxes/premiums on the middle class. That is just the wrong way to think about socialized medicine. Sanders proposed a ton of high in the sky shit but he understood that to fund universal social programs like they do in Europe, we need to understand that as a collective, we need to convince people that wealth should be redistributed across many horizontal axes (healthy to the sick, working to the elderly/children/disabled, non-parents to parents), not just the one vertical axis (rich to the poor).
We need to be heavy handed in healthcare provision, not just so the rich subsidize the poor (Medicaid already does that), it is also the healthy subsidizing the sick that needs to be at the foundation of a functional National socialized healthcare system. Everyone needs to bought into that. That’s why it’s important to ensure everyone is automatically enrolled (so young people who have low risk) are forced to participate. That’s what seems hardest to do in America: mandate automatic enrollment and tell rich people they can’t get ahead in line.
If you want to do only do vertical wealth transfer, there’s a tax code for that.”
I would like you to point on the map to the country of Europe. It seems like it’s just the uk because in France, Germany, Switzerland and the Netherlands they all have a floor of coverage and then nicer coverage in private markets.
Which is also what they do in Japan, Korea and Australia and Taiwan. They control prices and allow space for innovation from private insurers.
In Europe, income inequality is much lower (Gini coefficients: ~0.3 in many European countries vs. ~0.4 in the U.S.), which means even if there are private options, the gap between public and private services is narrower, making the public system the primary choice for most citizens. Wealth concentration in the U.S. allows the wealthiest to create parallel healthcare systems that weaken public programs by attracting top-tier doctors, which is not that much of a concern in Europe.
There are some European countries where private insurance plays a minimal or non-existent role. For instance, in Iceland and Norway, healthcare is nearly entirely public, and private options are limited. Denmark has a mostly public system, with private insurance acting as a supplementary layer rather than an alternative, meaning that all citizens rely on the public system for essential care. While France, Germany, and Switzerland have hybrid systems, these countries heavily regulate private insurers, ensuring that public options remain robust and accessible. They achieve this through **price controls, universal enrollment mandates, and income-based subsidies** that maintain equality in access. Again I doubt this would work with extreme inequality in America and largely individualistic attitudes of Americans without forcing ppl to opt in.
Obv countries like the UK and Canada (single-payer systems) demonstrate strong public systems without significant reliance on private insurance. While the UK allows private options, the NHS still serves the overwhelming majority of citizens from what I understand?
Private insurers primarily profit from managing coverage, not from driving innovation from what I’ve read. The only benefit private insurance has in managing culture war, the true hurdle would be trying to either get feminist groups to back off demand of covering abortion or evangelicals to support a system covering abortion
Ultimately though, I still think allowing the wealthy to opt out reduces the collective risk pool, increasing costs for everyone else. A universal system requires the participation of all demographics, especially those who are healthy and wealthy, to subsidize the care of the sick and poor. Supply side problems aren’t going to be solved with Medicare for all but how we ration the care would change (more on need less on ability to pay).
One thing I’ve never understood about the U.S. healthcare debate is that there isn’t more emphasis on price transparency. That NYT piece on the guy with the bat bite just completely blew my mind and I feel like mandating price transparency is (a) pretty easy and (b) pretty non-controversial. I’m not sure it ‘fixes’ healthcare but it would greatly improve patients’ quality of life.
Like yeah I know all about that place in Oklahoma that is all cash but like a lot of healthcare is uncertain what you need and will involve some amount of haggling between the payer and payee and it seems harder to do in practice than it would seem.
I went to an urgent care for an injured foot. They spent 30min meeting with me, took lots of X-rays, and applied an ace bandage.
I get the bill and the appointment was $150 (fine), the X-rays AND radiology consult were all together $50 (huh), and the ace bandage was $200! Obviously I would have declined the ace bandage and just applied the one I already have at home myself. But no one ever stops to mention "this 30 second unnecessary action will double your cost "
The challenge is that the actual cost to the patient for what you had done would be different for every single patient that walked in the door.
To know what you're going to pay they would have to know exactly what plan you have with what company, and even whether or not you have met your deductible. Their business model depends on all those various negotiations, so sometimes they get $200 for that ace bandage but lots of times they only get $5. The reason the itemization is done the way it was isn't because that actually reflects their revenue and costs for those items, it's that they have to submit that itemization in that format for the insurance company who has negotiated their prices differently than you.
So sure in your single example you could wisely have skipped the bandage because that was the high priced item at the end of the procedure. But they need to collect the sum total of those charges from the whole number of payors that they have. They could customize a price list just for people walking in the door without insurance, but then it would say $1 for the ace bandage and $349 for the appointment.
The technology exists, when you give your insurance card to the people at the front desk they can tell you in 30 seconds if your coverage works there and if you need to pay a copay or not.
It would be a major pain to implement, not so much because you couldn't surface the prices to the ordering physician, but because you would need to have doctors (or nurses or whoever) walk you through the price of your different options like they're trying to sell you a cabin air filter at Jiffy Lube.
The technology could exist maybe, but it doesn't today. In the example you gave there is no insurance involved, or there is and the prices on your initial statement aren't actually what you ended up paying. The doctor can tell you your co pay for an office visit, maybe even for some basic tests. The doctor's office point of sale IT does not tell the doctor how much they're going to get paid or even which of all those line items they will eventually get paid for. Even in your example, unless you handed them a credit card with sufficient room for the charges up front, they don't know how much they're going to recover from you.
One of the insane ways we ration care in this country is if you walk into that urgent care without a credit card they can turn you away. In which case 1) you don't get care you need, 2) you go to an ER that can't turn you away and just has to hope they recover some costs, or 3) you defer care, get worse, and then go to a facility that can't or out of compassion won't turn you away and it costs everyone more.
The thing about believing that price discrimination will change much is that it assumes things true about other services but not true about healthcare. You spotted a line item you think you can do without, but if they just listed that cost somewhere else what would it change. If the Xray cost more would you have foregone it? If you want a meal you can cook at home, go to McDonalds, or go to a three star restaurant. With healthcare, cook at home, i.e. no treatment is an option, but there's really no 3 star versus McDonald's choices. An Xray is an xray, maybe somebody is a bit more efficient or takes a little less in salary, but there's no qualitatively different version of a correctly read xray, at best you can choose between BK and McDonald's.
The technology does exist today - I used to build contracts that hospitals negotiate with insurers into hospital's electronic medical record systems. Some very small hospitals are still doing it manually, I presume, but any decent sized hospital could put a charge in, calculate the negotiated price, call an API at the insurer that tells them coinsurance/copay/ max out of pocket/etc, and give you the patient responsibility in <1 minute.
The funhouse mirror version of this is veterinary care. I took my dog to the emergency vet when she was bit by a snake, and after they triaged her a vet tech came out and walked through different options that the vet suggested - essentially an antivenom shot and give her back for $800; the antivenom shot plus IV and observation for $2000, or the antivenom shot plus IV, observation and an overnight stay for $4000. Obviously the vet recommended the last one, because it was safest for the dog (and least liability for the vet I'm sure).
If hospitals really wanted to they could set something like this up, but for whatever reason they don't today. In my mind part of it is deference to whatever the doctor thinks is best, part of it is liability concerns for malpractice, part of it is that it wasn't possible most places 20 years ago.
unless you believe in either the abolish all insurance companies and go full free market camp, or the abolish all insurance companies and do M4A camp, that's unworkable. A big part of the point of insurance companies is negotiating price. AETNA gets a better price for all its customers than you or even your employer would ever be able to negotiate.
It's workable, you're right that a big benefit of insurance is that they negotiate on your behalf. There's no reason why that needs to be a feature of the system though; you could have Medicare set prices or the price schedule nationally. You saw how much pushback there was for them doing that for just a handful of drugs though, it would be 1000x worse and require so much more political capital.
There is a lot of low hanging fruit. For instance, I recently had a test at my PCP. When I got the bill, it cost $200. A specialist wants me to have it again, but when I called and asked how much it would cost to get it at the specialists office, they couldn't tell me.
Also, the total charge (not what you pay, but what your insurance company is charged) varies depending on the contract your insurance company has worked out with the hospital. People without insurance get charged the most. That should be more transparent. In any case, it would be good if people realized what the total cost was.
A colleague had a similar health incident (detached retina) in the US and in Germany. His itemization of charges in Germany was 2 pages, and it was clear what every charge was for. The one from the US was dozens of pages long, and we couldn't figure out much of anything. I don't work in a medical field, but people I work with are well-educated. It shouldn't be that incomprehensible.
I don't think this is true. It's my experience that if a provider thinks you are uninsured, they will likely cut the bill in half or more immediately if you will pay. Knowing that if they don't, lots of cash customers just won't pay so the facility will get pennies on the dollar by selling it to debt collectors.
You are correct, the list price is usually the same for everyone. The negotiations happen after that with different insurance providers writing off different amounts based on their contracts with the hospital.
Basically every hospital will have a self-pay discount, and almost all will have higher discounts based on your percentage of the Federal Poverty Level (sometimes up to 500% of FPLA which covers most of the middle class).
Yup. At least nowadays there's the option for insurance on ACA exchange.
Worst case IMO in our current system would be someone 60-64 (pre-medicare), middle class, who got laid off but has enough savings to retire. If you have some niggling health problem you need preventative care for you're probably stuck paying $1,000/month for a high-deductible plan, just so that your insurance will negotiate your drug prices down.
Low-hanging fruit would be getting more people into something like a Kaiser Permanente model, where the insurer owns the hospital and directly employs everyone in it. Then if you have Kaiser Permanente insurance and you go to the Kaiser Permanente hospital, you may not know in advance exactly how much you’ll be billed, but you can at least be sure you won’t get wild out-of-network charges afterwards.
In Pasadena, where I used to live, is where Kaiser has their SoCal headquarters, but there isn't a Kaiser hospital anywhere close to Pasadena. I always thought that was ironic.
I don’t disagree that it is complicated but I also don’t think progress here is impossible. We already have seen progress with PBMs and introducing transparency to pharma pricing. The next step should be basic treatments and common ailments. Then work your way up the ladder as systems get more efficient.
I think power markets are a decent but incomplete comparison as the cost of generating power in a given minute is generally unknown to the consumer at the time of consumption. But we don’t just have consumers get billed for whatever the settled cost of production is because that would be insane. Instead we’ve erected a structure of settlement where the utility normalizes the costs so the consumer has certainty. In theory the insurers would fill that role in healthcare but they have no incentive or mandate to do so. But to have a functioning market for anything the consumer needs to understand roughly what price they will pay for the product/service.
The question is who should accept the risk of a procedure being complicated. It seems like doctors would be in a pretty good position to accept that risk if we mandated it. Sometimes a procedure is easier than expected, sometimes harder, but things average out over time. Things don't really average out for the patient over time, they just experience a crapshoot every time they have an operation.
I was doing research on how much a medical procedure I was considering would cost and my health insurer actually does list negotiated prices on its website for each in-network provider. So, in theory, this could let me price shop. The catch is that the prices are listed for each medical code, which are basically indecipherable to me.
That's a problem generally, because coding is so complex and each doctor has leeway on what to order it's hard for a person to shop for how much it would cost. Even if you know the particular procedure you want done (knee arthroscopy, for instance) you still have to figure out if you need to account for anesthesia, pre- and post-imaging, medical equipment, etc etc etc.
There are some common procedures that are commoditized (knee replacements and cochlear implants come to mind) and you should be able to get an all-up price, but they're a small portion.
I was hoping someone would say this - we talk a lot about how important cost/benefit analysis here at SB, but healthcare is one area where the consensus seems to be that providers should not take cost into account when creating a care plan.
If it was mandated, or high demand, the technology exists where when you see the doctor they can submit a few options for what they recommend, get an estimated cost from the insurance, and walk through the options with the patient. That's what happens when I take my dog to the vet, for instance.
I think there's an aversion to having a doctor look at prices and have to say "hmm it would be great to have an MRI done... oh wow this guy has a $20k deductible? His aorta is probably fine, let's do an ultrasound on the rest of the heart and see if anything turns up."
I don't really understand what price transparency would do. No industry has price transparency. Every seat on a plane was sold at different price. Every hotel room. Every scanned price in the grocery store changes daily. Amazon changes the price of the same item at the same time for users with different cookie history. Price levels are just where negotiating power meets in the marketplace.
Yes, but in all of your examples, the price is known to the purchaser before the purchase decision is made, which is I think a necessary (though not sufficient) precondition for things like competition on price and cost-benefit decision-making by individuals.
I think that’s what people mostly want when they talk about price transparency in healthcare.
None. When I was hospitalized I got lucky and didn’t end up having any out-of-network billing issues, so I hit my annual deductible and that was it. But then I’m relatively young and relatively healthy and relatively well off.
But also I’ve never comparison shopped between doctors or hospitals on price, or even tried to do cost-benefit on various recommended tests or medical procedures.
I have comparison shopped on prescription meds, or just forgone them, because it is possible to find out how much a prescription will cost given your insurance, decide that’s too expensive, and then ask the doctor to change the prescription to something else that will cost less. Also, I have comparison shopped with dentists, because if you don’t have dental insurance you can just call and ask how much they’ll charge for stuff and they’ll tell you.
But yeah, “Necessary (but not sufficient)” is definitely doing work in my original comment.
I read it different. I think what they want is a single price across all patients and that's just never going to happen because it doesn't happen in any industry. But agree to a point that healthcare is unique in post-action billing (e.g., that $200 ace bandage example uptread) but those examples are just rounding errors.
I don’t know, my uninsured girlfriend just paid $800 for a basic office visit, at a community nonprofit healthcare facility no less. My insurance has never paid more than $150 for comparable care at fancy concierge clinics.
If it were a question of her having to pay $150 then being uninsured is no big deal. But the penalty for being a private payer is intense.
Just like with pharma benefit managers these companies are introducing unnecessary complexity to make it hard to understand pricing so the companies can rent seek and keep higher profits.
Competition requires pricing transparency
When you are at a super market you get to see the price for each good, and then choose. That's what we need.
Mandate the same price no matter who pays, then mandate you post it online.
One benefit of insurance that gets little mention is that insurance companies negotiate wayyyyyy better prices then those you get if you don't have insurance - even if your deductible means you have to pay out of pocket. It's not financially viable even for someone with resources to pay the raw prices billed.
I got some lab work done by a major nonprofit hospital chain in NY, and they neglected to enter my insurance information prior to billing me. I have a high-deductible plan, so I was always going to be paying for it. The prices that were billed were more than 5x the prices I ultimately had to pay once they correctly noted my insurance.
I think this is a bit of a scandal that affects the poor (uninsured) suckers least able to pay. It's especially a scandal for things done emergently, like appendectomies.
The thing is, people who are billed at those prices generally don’t pay them because they are uninsured and have few resources. The providers then write them off as “charity care”, greatly inflating the amount of charity they provide relative to their actual revenue and profit.
At the hospital I worked at, these patients (even with minimal resources) would be given the option to negotiate a payment plan, likely with reduced rates. If they just tried to disappear, they'd be sent to a collections agency.
I always thought that charging hugely inflated prices was poor financial strategy, because I think the bills that resulted would be so terrifying that poor patients would just try to lie low rather than attempting to pay or negotiate. Uninsured patients generally weren't the most savvy patients.
And, I promise you, if a patient with any means but without insurance turned up for an appendectomy, they would be pursued mercilessly.
Very much agreed, I think we should ban providers charging different prices depending on who's paying. It shouldn't matter if you are paying through cash, insurer, or government program. Make the price, the price, and then mandate that you post it online.
This is a necessary condition for competition to work properly IMHO.
That and I would ban 3rd party billing, you should get one bill from the hospital, they hospital can pay everyone else.
After that just focus on increasing healthcare supply faster than demand, and watch costs come down.
That's not practical. It would lead to providers opting out of Medicare and, especially, Medicaid, which pays extremely poorly (as MY wrote in the piece we're commenting on). In our current system, private insurance effectively subsidizes Medicare and Medicaid by allowing providers to make up for the low reimbursement rates of the government programs by getting better rates from private insurance.
I do think price transparency might shame providers into having more-reasonable and more-streamlined rates, and not trying to scalp those without insurance (or those out of network).
And doctors (and others) don't necessarily work for hospitals, so it's problematic to dictate their payment arrangements.
I work for a technology company whose product is used by hospitals and other medical providers. Something of note: about 25% of our customers were insolvent and unable to pay their bills (until we went through and dropped a lot of them and enacted much stricter controls on credit worthiness during our sales process).
This doesn't mean that our customers are a representative sample of all healthcare facilities, of course. But when grappling with whatever the fuck is going on with US healthcare, it should be noted that providers are not swimming in money, at least many of them.
>>it should be noted that providers are not swimming in money, at least many of them<<
Good point. Provider unit costs in the US are the highest in the world, but where does that margin go? Not to most hospitals, surely. Some of it's medical devices, technology and software. Some of it is pharma. But a lot of it is paying for the help. And no, not every MD or RN or MRI tech is driving a Bentley (far from it) but these people need to be very well-trained, and in a high wage country like America, that doesn't come cheap, especially in a sector characterized by Baumol effects. Robot healthcare professionals can't arrive soon enough.
Wait, this is a chart of *percentage change in expenditure shares*. So the chart is fully consistent with admin costs going from 5% to 8.75% of total spending. (I have no idea what the 1990 admin expenditure share was).
It also doesn’t tell us much, necessarily, about what’s driving the overall *level* of prices. From the chart, I have no idea if providers are making 3x what they did in 1990 or 0.5x.
Providers in the healthcare context normally means practitioners like physicians and nurses. The way Smith uses it seems to include hospitals and large care purveyors, which is not how the term is normally used.
I've had this discussion with a lot of folks this week. I'm in the industry and everyone I know uses "providers" to include "organizations that employ practitioners to deliver health services."
When insurers are in the conversations, the categories are "Providers" and "Payers" to delineate, say, hospitals from insurers. The existence of the terrible word "payvider" to mean a mix of the two is also evidence of this.
I think the lesson is we need to all stop using the word "provider" in these healthcare discussion contexts.
This definitely sounds like one of those words that everyone hated from the moment it was coined, but no more dignified competitor ever got a toehold against it and now it's standard.
Speaking of technology, can we please modernize HIPAA? I have a hard time believing that using a Citrix remote desktop over a VPN to access a virtual windows 8 computer running your medical record software is more secure than a modern web app using best practices. But one of those things jumped through some compliance hoops and the other didn't.
I had a similar experience. The company I worked for provided a technology that in many places is state mandated but in some parts of the country (think deep Appalachia) the facilities couldn't afford it. So they'd sign the contract, we'd implement, and they'd never pay.
Non creditworthy customers are a fact of life, but we seemed to get an unusually large number of them, particularly for an industry that the common wisdom is that we overpay for.
My tentative guess is that just a lot of healthcare facilities are just badly managed, but I don't really know what the problem is.
There's definitely some of that. There are also just places where having any sort of facility isn't economically viable but they're deemed critical to the area so the government subsidizes keeping the doors open and lights on but not a lot else.
Yeah, the "providers are the reap evil ones" articles are the most classic case of motivated reasoning to get to an edgy hot take. It's really soured me on a lot of these newsletters lately.
If there's one thing I've learned over the past year or so (emphasis on the "or so"), it's that getting the left to drop their totemic, one-note, sloganistic, maximalist policy goals in favour of pragmatic solutions is effectively impossible.
Time, instead, to do everything possible to circumvent the left as a relevant player in Democratic politics.
Apologies in advance for the whataboutism, but it is not just the Left.
Sadly many people do not want to grapple with the intricacies of policy, and instead glom on to simplistic snake-oil slogans. And there is little incentive for the media or politicians to be more adult & sophisticated with them - that's not what they want.
No apologies necessary, that is certainly the case.
I can't remember if Matt himself said it, or a commenter here did, but I think we're operating in a space in which the only genuine policy discussion is happening within and around the Democratic party, so I typically focus a lot more on frustrations with the Left because they are at least at the table and able to be spoken to, even if they're doing so unreasonably. The American right are in a corner throwing spaghetti over everything, so while it remains true that they're even worse, I honestly can't begin to think how to engage with them, so I typically ignore.
One thing that I’ve learned about the far left is that they tacitly support terrorism (as evidenced by their backing of Luigi the murderer), and the mainstream left will say things like “murder and terror is wrong, BUT they have a point”.
We saw this same dynamic on other issues plain and clear.
This is really dysfunctional. And really disgusting.
We can have a national discussion on healthcare not as a reward for political violence but because people feel that it’s a priority.
Is this support for assassination primarily from the left? I assumed it was from populists across the spectrum - left, right, and checked-out-of-politics.
Perhaps, but I haven’t heard any R senators say anything like what Liz Warren has said. One Liz Warren comment like that wipes out every Fetterman comment saying Luigi is a creep m.
Big political discussions often follow viral events. Just like we have the gun debate every time there's a school shooting. The issue is there, just lying quiescent, and then people get triggered and it breaks through the noise barrier.
I have no problem with the viral murder leading to a debate on healthcare. The problem I have is with people, like Taylor Lorenz, celebrating murder.
So, yes, "The murder was totally wrong . . . BUT . . . " is perfectly acceptable. They're explicitly saying murder is wrong but then they're using the opportunity to voice grievances about things that really can affect their lives.
If the things were really affecting people’s lives and were important to people, they could have been talking about it last week. Or the week before that. Or the week before that. It shouldn’t take a terrorist attack to animate the media. That terrorist should not be setting the agenda of what topics we are having national conversations about.
Being animated by a terror attack to bring attention to an issue, even if you do the formalities of condemning it, means that that terrorist attack served its purpose. It incentives further political violence.
And the media as a whole should not be incentivizing terrorism.
Sure, they could have been talking about it. And no one would have paid any attention. Just as we could talk about red state abortion laws in the abstract without mentioning young women bleeding out in the parking lot. Just like we could talk about undocumented migrants living here without talking about the murder of Laken Riley. Just like back in the day we could talk about gay rights without mentioning Matthew Shepard.
Wait...young women bleeding out in the parking lot is not terrorism. The other cases you mentioned are not cases of the media using a terror attack to refocus the attention on the political aims of the terrorist. The Laken Raley murder animated a conversation about the problem of violence by undocumented people, not a conversation in support of the political grievaces of the murderer. Likewise with Mathew Shephard--his murder didn't spark a national conversation in support of the pet political project of the Shepherd's murderer.
None of these examples seem to demonstrate the point I was trying to make, which was about terrorism and political violence.
I was making a point about terrorism and political violence. Terrorists should be made to understand that their political violence hurts their cause, not helps it.
Like I said, anyone who cheered on the murderer is despicable. But to condemn the murder and then to launch into a debate on problems with our healthcare system is perfectly fine in my book.
And here we are doing just that!
(And I don't give a crap what the murderer's "cause" was; I don't care about him at all. But his actions can't mean we *can't* have a debate at this moment on healthcare policy.)
I didn’t say anyone “responsible” is supporting assassinations.
One thing is that I wasn’t limiting my discussion to “responsible” actors.
What I said was that the far left tacitly supports the terrorist attack (and no not only on Reddit) And the mainstream left, while condemning acts of violence and terror, leaves open a “but they had a point” and rewards the terrorist with attention to their pet project.
I think it might be smart politics and also a top healthcare priority to focus on one thing that I never hear mentioned in the healthcare discourse: ELDERCARE! It's expensive AF!
And, like healthcare generally, almost everyone will need some form of it someday. Something that Americans don't seem to have faced up to. How are you gonna pay for it when you do, fam? Not just the eye-watering nursing home bills that many incur toward the end-of-life (and a lucky few avoid entirely). But also assisted living facilities, home healthcare aids, and even the occasional delivery or transport support for older folks "Aging in Place." That stuff costs!
Other countries have figured this out. My wife worked as for the Swedish Hemtjänst ("Home Service") as a teenager, rushing from pensioner to pensioner to check on them, refill their meds, deliver groceries, etc. Like most home healthcare aids, she didn't get paid much. But unlike in the United States, the service was publicly funded and universal and cost little-to-nothing out-of-pocket to her elderly clients. They had pre-paid for it with a lifetime of tax contributions, like Americans do for Medicare. And, as a result, their lives were much better, they could stay at home longer, health issues were flagged quickly before they deteriorated, and the overall fiscal burden they represented to the state is less. It's a marginal cost compared to the yawning fiscal abyss that faces the American old, both individually and societally.
I will spare you the gory details of what the alternative of this looks like for a family with an older parent dying slowly of Alzheimer's (like my own father), but it is unimaginably bleak in every way, I can assure you. Even if you "do everything right," you will be ruined. Brace yourselves, Millennials! And the burden for this often cascades down to the younger generation, too. So eldercare becomes everyone's problem.
Yes, having gone thru all this and now on the other side, not only is it expensive af but good luck finding a decent assisted living facility or someone to provide at home care. If your parent requires constant supervision, caring for them at home is unbelievably difficult and such an incredible burden for families to take on if they lack money to hire help.
I agree these costs are a problem, but how a government fund is likely to fix it.
Say there were taxes like SS. Well SS (and Medicare) are in trouble because of declining demographics and changing dependency ratio's
Wouldn't this elder care fund be in the exact same scenario?
Note it's important to understand that neither Medicare, or SS is prepaid. Current taxes go to pay for current beneficiaries. Those taxes aren't enough. And they certainly aren't nearly enough to pay for future promised benefits.
the heart of the problem is we've extended life spans a lot more than health spans. We need to reverse that and focus on lengthening health spans. That's the only way to get the total cost down.
I suggest investing 100 billion a year or so into reversing aging research
The costs are a given, it's just a matter of who pays and when. For most Americans, it just comes as a big, nasty surprise at the end and then they're ashamed and isolated and don't tell anyone else. So they go without care and suffer the intolerable effects of that, with an untold burden on family. Or they use Medicaid for the limited and terrible nursing home care it will pay for until they're dead and the state tries to claw back some of the cost from their estate. Or they don't pay their bills and declare bankruptcy. None of these are desirable outcomes for anyone.
The basic genius of the concept of insurance--and by extension social insurance policies like Medicare and Social Security--is that you make a massive risk-pool. MUCH bigger than any one private insurer could in a competitive market. And then you leverage that scale to reduce costs via monopsony, or being a big f*cking buyer (a la Medicare). And then you become the perfect long-term portfolio manager to decide when you're going to need that cashflow and what the actuarial tables look like for your customers. And that's pretty predictable: almost everyone underestimates their end-of-life costs. So you then force them to save for it via taxation. This is what works quite well with the Australia/NZ and Singapore healthcare systems: they just make you actually buy the amount of insurance you'll inevitably need instead of leaving it to people and their unhelpful biases.
And if it's not enough because people are living longer, but with shorter healthspans because we're all too fat? Well, you price that in, just like private insurers do. And what if you have a demographic collapse like we are currently experiencing and the young aren't paying enough for the old? Well, you balance the revenue and the costs by raising taxes, lowering benefits, or being smarter about what you will actually cover because it has a demonstrated benefit. And people hate all that, of course, but we're living in a fantasy world currently where nothing adds up, so we do need to get real.
Great post. It’s astonishing to me that someone actually has to say that of course the president doesn’t have a magic wand to implement his campaign slogan, and that any actual policy change requires persuasion and compromise. How do voting-age “educated” adults not know this?
If I've been red-pilled on anything over the last few years, it's that the large majority of voter are either an idiots or are so driven by motivated reasoning that they may as well be.
In my younger days I thought a lot more of these disagreements were misunderstandings or rational disagreements/different incentives. Then I thought that it was just the MAGA folks. After watching the post-CEO healthcare discourse I'm now very convinced that it's both sides.
Totally agree, the magic wand idea has been one of the recurring themes of the last four years with my friends to the left. Biden just didn't "push hard enough" for [policy X]... with policy X being every single thing on the progressive wish list, including things struck down by the courts (e.g., student loans) or things on which he did spend a lot of political capital and made progress, but not sufficient for progressive advocates (e.g., climate stuff).
The other recurring theme is "Biden didn't message this well enough"--which is also kind of a magic wand idea with respect to an imagined superhuman rhetorical power to make unpopular Dem issue stances (e.g., immigration, anti-drilling) more popular.
It's a truism that Democrats will always blame "messaging" whenever they lose, insisting people really want their policies but are just lied to somehow, when sometimes their policies are genuinely not popular.
However,
> unpopular Dem issue stances (e.g., immigration, anti-drilling
We're pumping more oil than ever. I forget where I heard it, maybe Matt, that there were efforts to counter Trump ads about energy by pointing this out. But it was killed by internal White House / campaign people who didn't want to mention it.
I think voters appreciate simple and verifiable messages. Joe Biden doing an ad saying "we're are pumping more oil than ever, and the United States is now the biggest oil producer in the world" super-imposed over a graph of oil output would have been an easy win.
To be fair, though, his messaging was pretty bad magic wand or not. For most of his term he acted like the communications part of his job was beneath him (when actually it's just he was bad at it/is no longer cognitively capable of it) - and his approval rating reflects it.
I'd like to make the case for more free market care. Chicago economist John Cochrane used to blog a lot about this, it drove him nuts that the mess that is US healthcare was portrayed as anything approaching a free market.
I'm not sure even he wanted patients individually selecting emergency or major care. But some healthcare can be provided like a normal service with no government or private insurance involvement. In London I can pop down to my local private clinic and get a pretty wide range of services without anyone else's involvement, but Cochrane asserted that in the US regulation is so onerous that it's difficult to offer that. I don't know how much money it'd save because I think most of the cost is in the major care, but it'd just improve quality of life.
A trick I learned recently, which so obvious it seems silly, is if you need a procedure, ask how much it would cost if you paid them cash on the spot. You might be surprised and might just be worth it to you to avoid the hassle
One tweak could be that if you just pay out of pocket with insurance being involved that you could submit the receipt to your insurer to have it count against your out of pocket maximum
Anyone interested in econ should read Cochrane’s blog. The partisan stuff is hit-or-miss, but on everything else he’s way more insightful than Scott Sumner, Noah Smith, or Krugman (who is brilliant, but his writing went to shit after he decided to do political propaganda).
I’d say that Sumner is so muddled and incoherent in his thinking that I have no way of knowing if I agree with him. It’s like modern monetary theory: no model clearly telling me where he disagrees with standard theories, just a bunch of self-contradictory prose.
That is classic libertarian cope. Of course regulations effect the market and in a bad market like the US it is clear that they have bad effects. Still, if anyone is selling you a simplistic idea like all regulation is bad then they are ignoring more facts than they are paying attention to.
That’s how it used to be but people ended up foregoing primary and preventive care leading to more serious costs and complications. For really optional things, the Urgent Care storefronts basically already do that.
If I can read the median opinion of people in the US - they don't want socialised healthcare (except for the bits that provide healthcare for them personally), and they also think executives working for private health insurers should be killed for denying healthcare to people.
I have never seen a poll indicating that the second part of your statement is the opinion of a "median" person in the US. Sounds like some online leftist stuff.
Thoughtfully argued, as usual, but no one seems interested in taking on the elephant in the room: Thomas Sowell’s question as to how an intrinsically expensive service such as good medicine will cost less (and thus be more widely available) when overlayed with a government bureaucracy.
The bureaucracy thing is bullshit; health insurance companies have their own bureaucracies, most of out duplicative with one another. A big chunk of savings would come from having just one bureaucracy. The rest would come from monopsony pricing.
The same is true for e.g. construction. That unfortunately doesn't mean that there's a magic fix here, just a theoretical possibility. And the other points raised here are difficult too.
There might be some some good critiques around government bureaucracy that he'd answer with, but I think the largest part of the answer is simply that we have more money.
Well, when it comes to cars, appliances, and electronics, Americans spend more but we get more in exchange: bigger cars, more powerful appliances, etc. But with health care we get worse outcomes, not better.
In terms of actual, applied care it seems like we do just fine. There's just not that much difference between getting treated here and getting treated in Europe, and gaps in treatment due to having insurance just don't seem to explain that much of the difference (to the extent they do, it's also a weird sub-argument, ie "those of us who can't spend money on healthcare don't get much from healthcare")
The bigger issues seem to be lifestyle related, obesity, drug overdoses, traffic accidents, etc, which again are partially fueled by the fact that we can spend more on driving, drugs and food.
Okay but again, we pay more for cars and get better cars, we pay more for air conditioning and get better air conditioning, but we pay more for medical care and we don’t seem to get better medical care? Is that accurate?
No, my point is we actually get fine care. If you go into a doctor's office you're as likely to get as good care as a European would. We have worse health outcomes, but that's mostly due to lifestyle
I thought Baumol mainly applied to jobs where technology doesn’t increase productivity, like teaching and string quartets. But I’d think that in medicine, technology does increase productivity? I mean a nurse can’t change a bedpan or give a shot any faster, but there are arthroscopic surgeries now and other methods that should increase the productivity of each medical professional.
The larger issue is I don’t understand why Baumol would apply more to the US than to other countries in this regard.
Wages are way higher in everything in the US. Doctor wages are kind of insane and out-of-control IMO, but we should absolutely expect them to be more than Europe by a non-trivial amount.
I think it's true in that our health care has improved due to technology relative to the U.S. of the past. We should get more for the same $$ than we used to.
But the technology is available worldwide(or at least in other rich countries) so it doesn't increase our productivity relative to Canada/Norway/etc
You cannot use a market mechanism to provision a good that people cannot choose not to obtain. The actual life or death necessity of medical care means that a fundamental aspect of markets, elastic preference, is gone; a man who sticks a gun up at you and says "your money or your life" is not engaging in the kind of market enterprise that actually works on a social or economic level.
And since we're being meta, this question has gotten caught up in this side quest about whether literally every human good should be subject to market dynamics, and pre 2016 you yourself were someone who was not especially fixated on saying yes to that question. But you and guys like Noah Smith and Eric Levitz experienced being yelled at by people who prefer M4A and both moved right on this issue and hardened your stances, thanks to typical resentment-capture reasons.
If it were true that markets could not constrain costs of goods that are necessary to live, then food would cost your entire paycheck.
Food is in fact vastly more mandatory than healthcare. The overwhelming majority of healthcare purchases aren't life or death, and of the ones that are, most are life or death on a slower timeline than starvation.
There may be reasons why market provision doesn't work well for healthcare, but mandatoriness is not among them.
Information asymmetry and the acuteness of medical emergencies are two reasons health markets fail. You don’t know what you need or are getting and then you often don’t have time to shop around when your appendix bursts.
Many parts of the health care system aren't subject to market forces.
But many are. I should be able to find out how much it costs to get an X-ray, or a lab test.
ER use is at most 2% of total medical spending. Most medical spending isn't something you have to make immediately with no time to look.
The entire industry is built on hiding costs. Someone told the story in the comments about the $200 Ace bandage, and I had a similar thing where I mentioned to my doctor a spot on my foot and I found out later it $160 for them to dab some liquid nitrogen on it. If a car mechanic worked like that 60 Minutes would be all up in their business.
To use the food analogy you’d have imagine a system where you could only eat certain foods at certain times and you needed a specialist to tell you which ones and sometimes the decision had to be made very quickly or you’d die or suffer some permanent or long-term morbidity.
But I really want to emphasize how the whole "you're in an ambulance with minutes to live" thing is a tiny part of healthcare, and, as far as I know, not any kind of particular outlier in terms of cost containment.
It's not like the rest of healthcare is humming along efficiently but lifesaving emergency care suddenly costs 10x what everything else does.
I really don’t know for sure but I’d be surprised if life-saving heart, cancer and other critical surgeries, diagnostics and cancer treatments don’t make up a significant percent of the system cost.
Cancer is definitely a big deal, but note how we've shifted from "you're in an ambulance with minutes to live" to "you receive a diagnosis that suggests that you take a course of treatment over months or years."
And while these things may make up a significant amount of total healthcare costs, nothing that I've ever seen suggests they are cases where customers are unusually gouged. Again, it's not like "getting tests because you're having digestive troubles" is dirt cheap but emergency care is super expensive.
This makes it really unlikely that the unique properties of life-saving emergency care are driving healthcare costs.
Say you have a chronic condition where there are three drugs that are effective to treat it. Drug A came out in the 1990s and revolutionized treatment for the condition—the first treatment that was really effective in controlling it. It was very expensive when it was still new but has long since gone off patent and is cheap. But it requires daily dosing and is somewhat of a pain to manage the dosing and some patients experience uncomfortable but generally manageable side effects. Drug B came out in the early 2000s and is generally considered somewhat more effective with fewer side effects, and is dosed once weekly. It’s also off patent now but harder to manufacture and store so somewhat more expensive than drug A.
Drug C came out more recently, is moderately superior on efficacy and side effects for most patients to Drugs A and B, and is also dosed weekly so is a wash on convenience compared with B. It’s very expensive but the price of C will drop down to the level of B once it goes off patent. However the maker of C has recently introduced a new formulation that only requires monthly dosing and so is much more convenient and easy to manage, but that version will still be under patent and very expensive for several more years.
Are you saying there’s a basic human right to free access on demand for all versions of all three of these drugs without making any distinction among them, and that it’s immoral or unseemly to allow market signals to inform or set the price of any of them?
This is almost exactly the same as the living wage argument. I don't think people are paid enough but the official living wage campaign uses insane estimates as the bare minimum human right. At one point it was basically enough to pay for a two bedroom apartment as a single parent with only one 40hr a week job.
"The Bible says employers must support your out of wedlock children and only the devil works two jobs and shares a bedroom"
Water? Food? Last time I checked, most people aren’t eating at “restaurants for all” or starving to death. (Unlike in the Soviet Union or Communist China…)
Also, do we know what percentage of medical care is life or death vs. quality of life improving? It seems like narrowingly focusing on the life or death stuff misses a good deal of how our lives could be improved with better health care access.
Not accurate for several reasons, some mentioned in other comments, but the free market idea mostly includes catastrophic insurance as a pole that the free market revolves around. We can socialize the extreme cases and marketize the regular stuff, of which there is a large amount that would not be as expensive as it is now.
As a card-carrying liberal, I would also increase the safety net along other dimensions- but it’s not a great idea to socialize the healthcare industry.
I somewhat agree, but disagree that medical care/health insurance is a good that "people cannot choose not to obtain " I know many people who do just that because of cost. For at least one of them, it led to a preventable death in middle age. It is because of this care avoidance that I am a big proponent of changes in our system.
Your thought experiment with the gun implies an elasticity of zero, but not all healthcare services are like this. Certainly there are some where getting the service (say, chemo or insulin) is a matter of life or death, elasticity is zero, and the firm can charge the consumer for all he’s got.
But I would argue that most healthcare services fall somewhere in the middle. If you have asthma an inhaler would meaningfully improve your quality of life. But for most asthmatics not having an inhaler is likely not lethal, so you probably wouldn’t fork over your whole month’s pay to get one, and the firms selling inhalers know this. Same idea for things like getting cavities filled or treating a sprained ankle or getting glasses.
There are a lot of goods with relatively low elasticities (housing, since we all need a place to live; basic clothing, because it can get cold out; transportation, because most people need to get from point A to point B) where markets still function.
I really do think you're the last true socialist in the United States (admiringly). Why isn't your analysis of this grounded in historical materialism?
The modes of production here are the providers, not the mechanism through which risk is shared. If we just had Medicare for All tomorrow, the first thing that would happen is that the insurance company (M4A) would crack the medieval doctor's guild by setting rates (expropriating doctors' salaries).
Then the insurance company (M4A) would ration units of healthcare based on some sort of criteria, maybe democrat decision making or technocratic judgement.
Why is this bad if we just permit the capitalists to do it? It's their jobs to break the feudal baron's back and build out capacity.
My aunt who is a pediatric PT for disabled kids says she takes a couple of Medicaid kids , but she sees it as partial pro bono work because she’s losing money
Kind of like "companies got greedy in 2021 which caused inflation to go up" that has never made sense to me; a hospital's business office is going to try and make as much money as possible. If all of a sudden Medicare paid twice as much I don't think hospitals would lower their prices for private insurance, the prices they can charge are higher because private insurance has less negotiating leverage.
I think that the concern of senior citizens that if Medicare were expanded, their coverage would get worse is not unfounded. Providers accept Medicare now for a few reasons, even though it doesn't reimburse that well. They are pressured to do so by larger healthcare and hospital systems, if they are specialists they are pressured to do so by referring doctors, and honestly some of it is a feeling of obligation to (the limited number) of elderly people. Once you accept Medicare, you can't really pick and choose which Medicare patients you'll accept, and if Medicare became an option for the entire population there's a good chance many docs would just opt out.
Cutting current physician salaries and simultaneously raising their taxes (which is what large Medicare expansion would entail) would be bad for physician supply
Yes, until the actual bottleneck is no longer saturated, you’d expect any fall in pay or working conditions to cash out not in reduced numbers but in lowered quality, as more of our very best and brightest go into finance or whatever.
I think the concern around salaries is broader, and probably applies to nurses, NPs, etc.
And with MDs, specifically, marginal salary concerns do often come into play when they start to think about retiring, scaling down their practice or shifting to other lines of work, like advising insurance companies, working with lawyers on patents, etc..
I was an ACA enrollment volunteer from 2014-2021 which got me into the weeds of health policy design and implementation. A big part of why the M4A wars are so frustrating (and pointless) is that that there is just a lot of sloppy thinking and factional point-scoring masquerading as policy proposals. Going back to the 2016 primary (which we will never f***ing escape), the Sanders-verse got a lot of people on the left to believe three major lies:
1. Universal coverage is the same thing as single-payer.
2. All other developed countries have single-payer systems.
3. In these systems, people get an unlimited and instantaneous supply of care with no out-of-pocket costs.
Recognizing reality - that countries can and do achieve universal coverage with a variety of payer arrangements, and that some measures of cost control and rationing care are unavoidable - is really important if we want to develop workable proposals. For better or for worse, the architecture of the ACA is a lot like the Swiss and Dutch systems. With the addition of a broadly-available public option it could look more like Germany or Japan, while full M4A would be a heavier lift in terms of both revenue and disruptiveness.
I wish we could have these conversations honestly. But spreading the three major lies above is better for factional infighting and attacking moderate Dems as evil sellouts, and I suspect this is a big part of the reason they have been so difficult to dislodge.
The universal coverage vs. single payer is especially annoying. I have a hunch that healthcare coverage here in California is more generous than some European countries, since we offer coverage to some undocumented immigrants (through DACA provisions), and there are plenty of states that have a lower % uninsured than we do.
Why should seniors get gold plated public benefits that aren’t available to anybody else? Let’s make sure there is a basic health plan available to all ages before we expand what Medicare covers. Home care? Please no. A subsidy that encourages frail seniors to remain in homes that in many cases do not have the accessibility and safety features that they need is a recipe for more falls, more hospitalizations, more social isolation…all problems that those of us who have actually cared for aging parents are well aware of. If somebody is wealthy enough to hire in home care and maintain their home, then fine—it’s a free country—but the working age population should not be asked to subsidize this choice. Not only is is a safety issue for frail people, it keeps family sized homes off of the market and contributes to the housing shortage. A single 80+ year old living in a 3 bedroom suburban home is far too common. Why not create an incentive for the elderly to move to continuing care communities, or even apartments/condos where they are not dependent on cars, and where there are nearby services?
This article is a breath of fresh air that I'm glad is now on the record at SB. It's long been exhausting to listen to broad, vague, pie in the sky demands for universal healthcare, without covering sufficient details as to how it's going to happen given the current facts on the ground.
Obviously, as this is coming from me, the rent seeking much be attacked, including via the avenues Matt listed. Steadily expanding the fringes of public coverage is also sensible. A public option to opt into would be more ambitious but I think doable if that ambition starts off limited. Bore slowly, but nonetheless bore.
The public option is the key. If insurance companies are bloated rent seekers, the government can beat them on price and quality. If the government can’t beat insurance companies on price and quality, then private insurers are useful.
A few states have begun experimenting with a public option. I believe Colorado and Oregon. Maybe Nevada too?
I would be curious to see how things work in those states with my concerns about how taxpayers would handle bailing them out, so I'm glad they're trying it - the good side of federalism!
And Washington
MD’S experiment in healthcare is also pretty interesting
If the Democrats want "like a health insurance company, but run by smart, humane, well-intentioned people like us" they don't need to wait for a Democratic trifecta. They can set up that non-profit insurance company right now. Get some of the millionaires and billionaires who were on stage at the DNC to give the seed money. Put Elizabeth Warren and Ocasio-Cortez on the board and dictate that a majority of board members need to have been elected in D+10 districts to make sure only moral people run the company. Start the business in a few blue states where patients are smarter and wiser, y'know, like us.
Because there are no profits -- the scourge of the American health industry -- this company will blow everyone else out of the water. They'll grow like gangbusters and get more patients and go to more states and just repeat the cycle until everyone else is just out of business.
Absolutely nothing could go wrong.
I'm really interested in Cuban's Cost Plus Drugs model and wonder if he or that approach could expand to insurance. But totally with you on the general idea --to just to build it. I've been in a 4 year argument with Jesse Itzler over his cereal additives "activism". Just go start a company and win share. He's started like 8 other ones.
The main attraction of government employment is stability. The main attraction of joining. start up is a punchers chance of being rich. Asking people to invest their heart and soul in a startup and not want to get rich is naive.
Well, this company is run by well-meaning moral people, so they can just create worker protections like civil-service protections.
And, obviously, the workstaff would be unionized. Not that it's necessary, but we wouldn't have it any other way.
The company is basically guaranteed to last forever, since there's no CEO cutting a bunch of costs in one quarter to get a bonus only to blow up the company the next quarter. It's run by the best and the brightest, with no Wall Street greed. The people who provided the seed money weren't doing it to get rich. They will get it back in 5 to 10 years at a modest rate of return. They are Democrats, not greedy jerks trying to profit off other people's suffering.
There is a place for this type of thinking— government should pay for med school and pay med students a reasonable stipend in exchange for X years of work at whatever salary military doctors make. The key is offering the stability of government employment.
There are plenty of non profit hospitals
Only to avoid paying taxes. The ones that continue to exist and don’t fail or merge are usually the ones who have built up huge reserves on their balance sheet or in small communities are subsided by wealthy donors.
The market success of a health insurance company is almost entirely tied to its dominance: how many patients does it have, so it can force price changes on providers. You could reach into Plato's Cave and create the most efficiently-run small insurer possible tomorrow, and it will still get destroyed by a highly-inefficient competitor with gigantic market dominance.
Bravo
My big concern would be, what if the public option starts losing money because it over promises? Will that force them to raise prices or it will it start getting tax support and having hidden costs?
Do we mandate that it has to maintain a profit (but give it a pre-set buffer fund in case there's a rash of claims one year before it raises prices?)
How about we mandate sufficiently transparent accounting from government-funded medical service providers so that we, the tax-paying public, at least know where the money is going and can develop ever more targeted regulations to eliminate rent-seeking?
Moreover, the investment industry would love to know where unreasonably large margins are accumulating (i.e., rent-seeking). Similar to Walmart’s and Amazon’s disruption of insufficiently differentiated independent retailers, we can count on ever more innovation to manage out the waste. Eg, I've heard that the private equity industry is currently attempting to roll up various general practitioners in medical, dental, and vision so that they can get increasingly more leverage over their fixed costs; notably by introducing technology to substitute for inefficiently allocated resources.
My concern isn't rent-seeking, but I think moral hazard.
If the state insurer knows it will be bailed out it can of course undercut the private insurers, but it won't actually be cheaper. (If it charges 9% lower premiums, but the insurance normal profit margin is 9% then it doesn't have to worry if something goes wrong)
That said, I would absolutely support that transparency, and especially if that happens in a few states trying it it lets all of us, even those not in those states, look into it.
Yes, but at least taxpayers would know how much is being spent through taxes versus individual contributions for consuming the service. Additionally, academic-like research could use privileged data on consumption patterns to identify cases of moral hazard. This could help establish regulations similar to those for pre-existing conditions. Moreover, instead of fully excluding individuals from treatment, we could simply limit publicly funded options to those deemed sufficiently beneficial based on certain decisions.
These regulations could evolve through political processes to reflect voter preferences. For example, fewer lung cancer treatment options might be offered to smokers than to non-smokers, with these options narrowing further over time. Cutoff dates based on birth year could also be introduced, especially as public awareness grows about the risks of certain lifestyle choices.
"These regulations could evolve through political processes to reflect voter preferences. For example, fewer lung cancer treatment options might be offered to smokers than to non-smokers, with these options narrowing further over time."
I had not thought about that as an _advantage_ of the public option given complaints about rationing etc in other countries. If the public option isn't the only one then I'm legitimately not sure whether it will be an advantage or disadvantage.
"Stop nannying me" vs. "Stop wasting money on poor decisions"
Maybe the transparency will at least improve our debates on this.
Thanks for the thought.
"How about we mandate sufficiently transparent accounting from government-funded medical service providers so that we, the tax-paying public, at least know where the money is going and can develop ever more targeted regulations to eliminate rent-seeking?"
We don't do that now. The Pentagon (i.e. military) has failed every financial audit that has ever been attempted on it.
Yes, but private providers are already incentivized to get the accounting correct. Moreover we already have regulations that require sufficiently sophisticated accounting from sufficiently large companies. Eg, GAAP.
We could mandate a sufficiently detailed and rigorous accounting for any medical service paid for by public funds. Moreover, we could also ban price discrimination and thereby ensure we're not getting a subsidy by simply charging private insurance more. I believe that such a subsidy is already alleged.
I think that its unlikely that the government will be able to do both. They are very likely to be able to win on price simply because they can use price controls as Biden started with certain drugs. But that is usually going to decrease the quality of experience.
We already have examples with the VA and Tricare. Tricare, for example, saves a lot of money because it is an insurer of last resort and it has medical providers that are not paid via a fee-for service system. And uniformed providers are also legally insulated from malpractice and other types of lawsuits.
I’ve tried, unsuccessfully, to find accurate per-beneficiary numbers. The Tricare program cost is about $6k per covered beneficiary, but that doesn’t include a lot of spending such as provider salaries for those the government directly employs, nor does it include copays.
We have never been in more exact agreement. May the best option win.
The success of the public option is going to depend on its market dominance. Single-payer national healthcare works well at keeping costs low, because it has the market power to force providers and pharma companies to accept lower revenue. Medicare works well because it's enormous. A tiny public option is going to get systematically outcompeted in the market: private insurers will dump the least-profitable patients onto it and providers won't change their prices. This is health insurance 101.
I’m amazed at how surface-level the discourse about this topic is, and I’m glad Matt is noting some of that.
On the left, M4A is basically the counterpart of DOGE on the right. Surely, it’ll make things cheaper by eliminating “waste,” right? And “anti-competitive” practices? (Ok fine, this isn’t quite as stupid, but I do think there’s some magical thinking here.)
We should instead start with an accounting of why healthcare is so expensive. Do insurers have a ton of market power? Do hospitals? Is it just labor costs?
Absent evidence that insurers/hospitals are making huge profits, I’m starting to suspect that it’s just that doctors/nurses cost a lot. Even if they don’t “deserve” it, if the government steps in to curb wages, the doctors will just go be lawyers instead. Skilled labor in the US is going to be expensive absent a communist revolution.
Wanted to add two other things to the "why is it so expensive?" list.
1) Health care inflation is partly a function of genuine innovation, by which I mean that over time you pay more money AND you get better outcomes for your more money. Like, you can just straight up spend extra money today on treatments that didn't exist fifty years ago, and those treatments really will improve your health, but they really do cost money.
A great example is Hepatitis C. The course of meds for Hep C is billed at tens of thousands of dollars, but they really will cure you, and Hep C really can kill you. No amount of money spent by the richest person in the world fifty years ago would have achieved that outcome. BUT that doesn't mean that Hep C treatment should cost tens of thousands of dollars--the price of the meds is a function of all kinds of other aspects of our system, some number of which are dysfunctional.
2) A lot of the dysfunction in health care pricing is downstream of the plain fact that healthcare does not actually make sense as a service provided in a traditional market. Like, just to take some obvious examples, no one should ever treat (1) dying people--they are really bad about not paying their bills--or (2) old people--they die with unexpected speed, becoming (1)...or (3) people with addiction issues.
Of course, if you eliminated those three categories of people, you would reduce the population of my own critical care unit by 95%.
I'm not necessarily saying this as an argument for M4A or communism or whatever. I think that in some ways markets are really good tools for managing scarce resources, and our whole system is constructed in the larger context of a capitalist system. I don't think you can escape those realities.
But health care is just a square peg that we are trying to fit in the round hole of our larger economy, and that is necessarily going to produce a lot of dysfunction. If you can't recognize that at the outset, your attempt to solve the problems is going to be pretty badly handicapped.
Health care economics is a genuinely wicked set of interconnected problems.
"BUT that doesn't mean that Hep C treatment should cost tens of thousands of dollars"
New drugs need to make a LOT of money. Those new drugs don't just have to pay for all the R&D and testing for themselves they need to pay for ALL the drugs that don't pan out. I'm a biotech investor myself. I've had a number of companies go to zero. That means the few that works need to deliver massive returns.
Not that I necessarily agree with them, but there were particular beefs specifically about who paid for development of the Hep C treatment and then who got to monetize it.
I said on a different substack that if there's any place we should waste health care dollars, it's on pharma research. Every new molecule adds to humanity's knowledge. I don't know what molecules we'll have 50 years from now but they're going to be pretty awesome.
Yeah. In my perfect world (which does not and never will exist), we would actually blow a lot more money on pharma research, but the process would be less market-based. Historically speaking, a lot of pharma / molecular research is quasi-luck-based; you really do benefit from brute-force throwing more spaghetti at the wall.
But some of the areas where we should be throwing more spaghett just don't make much sense in the context of a market-based approach. Malaria is the classic one, but you can basically insert any disease of poverty, here: the defining quality of poor people is that they don't have money, including for your malaria treatment. It makes no economic sense to treat them. But it also applies to a lot of public health questions; the reason mRNA vaccine tech wasn't adopted until Covid is that it was a total loser, from a sales standpoint. There is very little money in vaccination, even though the societal benefits are enormous.
So if anyone ever makes me king of the world, we are going to blow an incredible amount of money on pharma research, but realistically speaking, a lot of that spending just doesn't pencil out, in a pure market-econ 101 sense.
Agreed. I would spend a LOT more money on pharma research. But I also I'm also fine with outsized monopoly profits due to patents (for a limited time of course).
for example, I would drop 100 billion a year on anti-aging research where we focused on increasing healthspan not just lifespan. We need people to be able to live and work longer so Medicare/SS doesn't go broke
I mean, yes and no: yes, drug development requires funding, but no, therapeutic pricing is not the only way to do it.
You could imagine a lot of alternative ways to fund drug development--just as one example, I would point you to Tyler Cowen and Alex Tabbarok's advocacy for a prize-based system; if you got a billion dollar payout for bringing a Hep C treatment to market, a lot of people would be incentivized to attempt that activity.
I'm not saying this is the "best" way; there are a lot of proposals floating around in this space, and I think several of them have merit. But the bottom line is that there are multiple ways to achieve innovation. I wrote about nuclear issues back when I was an academic, and here's the thing about fission bombs: the R&D was not amortized by selling fission bombs on the market. It is absolutely possible to pay for innovation in lots of different ways. Those are policy decisions. We argue over and make then in the context of politics (and economics, and culture, and a dozen other things), just like everything else.
But assuming that the system "has" to look or work this way or that way is silly. The price of Hep C drugs was not handed down by God on tablets of stone. It was the product of a bunch of complicated negotiations and choices within a system that both arose organically from and was created by the choices of humans.
The cost of labor is definitely a big piece of it. Skilled labor is extremely expensive, as we all know, and medical care is extremely labor intensive. I think that any successful effort to bring down costs in the U.S. is going to involve tackling the labor issues, and it will be very thorny.
I'll sign onto any proposal to force down doctor wages, but it's likely to be a political loser. Just a week ago an attempt to force down anesthesiologists got whiplashed so hard people are scared (maybe even for their own personal safety) to try again.
But what I don’t get is that even if the government somehow managed to put a cap on wages, won’t would-be doctors just go and become quants or lawyers instead? It seems to me like there would at least be a decline in doctor quality (which people may or may not be willing to accept, I don’t know).
Wages have gone way up which should lead to a big surge in supply but we're not seeing it. Because supply is being artificially constrained.
And the things associated with artificially constrained supply are the things that make life hell for young doctors (insanely long shifts during residency, etc.).
Right. But suppose supply is constrained at X and wages are suppressed. The quantity supplied will stay at X, but won't those X doctors be different, lower-quality candidates? (Assuming talented doctors could go do something else that makes a lot of money, which seems likely to me.)
particularly for primary care there are many, many, many people who could do the job who cannot get in to med school.
Nobody is going into medicine just for the money anyways, you spend your 20s in training and your 30s paying off loans. I guess maybe your actual worry is current doctors deciding to retire early, or just opting out of insurance altogether and only taking rich patients that can pay out of pocket (I feel like this might be happening in some countries with public health insurance).
This, plus the other objections raised below, plus some other stuff, are what I mean by "very thorny." I think it will be a genuinely difficult problem, both politically and economically.
The solution isn't to do it directly. Instead increase healthcare supply, and then allow competition to bring down prices.
Forcing price controls is pretty much always a bad idea
I think the mistake is thinking this is largely a problem that the right "experts" in government can manage and fix.
Instead I think the solution is two fold, making sure there is competition, and focus on increasing supply faster than demand. Then you let the magic of markets and competition bring down costs (just like it does for elective stuff like plastic surgery)
To ensure competition, you need to mandate pricing transparency. IMHO, that means not letting providers charge different prices depending on who's paying. Cash, insurers, and government should all get the same price. Next mandate that you post it online.
Now you have price transparency, so consumers can actually shop around.
Then focus on increasing supply, removing residency caps, making it easier to doctors trained elsewhere to immigrate and practice. Making sure rules on who can provide care aren't just protectionist rent seeking. Get rid of certificate of need requirements etc.
Hospitals are making huge profits. Insurers only do okay.
Are they? When I google it looks like hospitals really aren't making profits. They have tiny or negative profit margins.
It's certainly possible they pay exorbitant salaries and then have tiny profit margins.
Medical offices typically have profit margins around 45%(also from a quick google), which seems huge. But... if those are owned by a doctor and most of that profit is actually the doctor's "salary" then it's hard to say whether that's actually vastly more profit than a hospital or not.
Do you have a more in-depth source on this?
Here's some data. The largest publicly traded hospital network (HCA) is running 7% net margins. UnitedHealthcare (UNH) is running at 4%. Walmart is running at 2.4%. So IDK on either account. I don't think anyone is making "huge profits" anywhere in healthcare. If they did, it'd just attract competition.
maybe. That said being a larger hospital system is a huge help in negotiating with insurance companies, presumably there is a flywheel effect where you need to get a good reputation to get good payment rates but can;t afford to pay highly regarded providers without already negotiating the good rates.
This statement, as a global claim, is not true in any meaningful sense of the word.
Some hospitals are making okay profits. Rural hospitals are making no profits. Some actors within hospitals are making enormous profits, insofar as their salary is de facto a "profit" for the individual who receives it (which I think is how you should think about it).
But any attempt to fix health care by attacking the "huge profits" of "hospitals," as a general class of entity, is utterly doomed because it simplifies the problem to the point of incoherence, producing nonsense solutions.
Yes. Also, some nice old school healthcare wonkery warms the cockles of my heart.
EDIT: I'll add (not to be Debbie Downer, but it needs to be said), that turning any such discussions into legislation awaits the next Democratic Trifecta. When's the earliest that could possibly happen, 2029 if things go better than expected for Democrats? 2031? Sigh. The lessening of my worries about the state of American democracy under Trump is directly inverse to my growing disquiet regarding the likely policy awfulness of the next four years.
oh, another chance for me to remind people that Democrats should be thinking about their plan for taking the SENATE. People talk a lot of abstract smack, and I want to see the states they plan to win to get to 60 and the party platform they think will get them there!
You don't need 60 senators for anything. You need 50 senators with a full commitment to abolish the filibuster. The latter is not easy to accomplish, but it is way more plausible than the former. Plus a 60D senate with a filibuster will accomplish way less than a 50D senate without a filibuster.
This is probably true, but it is a nuclear option from the point of view of a lot of Democrats. You get your policies pushed through, but you open it up for Republicans to do the same. I tend to agree with Ezra Klein's take on it that that's good. If you believe in a program or policy, you should be willing to risk your opponents running against it!
I do really like your last point there: 60D with a filibuster will be fractious and milquetoast. 50D without is more unified!
My recent comment on the topic: https://www.slowboring.com/p/another-post-election-mailbag/comment/80316842
Matt's essay on the topic: https://www.slowboring.com/p/filibuster
I also want to argue against the idea that abolishing the filibuster would purely make the Senate more partisan. The existence of the modern filibuster means that the opposition party can costlessly sabotage whatever the democratically elected majority of the Senate wants to do. Without the filibuster, if there are 50.5D or 50.5R votes to pass *some* kind of bill on a topic, then the opposition is incentivized to help craft better bipartisan legislation, rather than oppose everything for purely partisan reasons.
And finally, the filibuster doesn't just result in legislative gridlock, it also leaves a power vacuum that gets filled by the other two co-equal branches of government. So the filibuster doesn't even necessarily prevent partisan overreach, it just means the overreach comes via executive actions or jurisprudence, rather than via legislation. (With the fall of the Chevron doctrine, the relative balance will tilt towards jurisprudence, rather than executive action.)
Why do you find it more plausible? I've seen 60 Democratic Senators but I've never see either party eliminate the filibuster, so my simple logic is that getting to 60 is easier. You don't think there are likely 10 Dem holdouts who would keep the filibuster, meaning you'd need another 50 (aka 60 total) anyhow? Filibuster protects a lot of wary Senators from hard votes...
Also, Dems are <50 for 2025, so already you need to think about how to win Senate races in some less friendly states...
There has only been 60 senators caucusing with the same party once since 1978, and even that was very contingent at multiple moments due to the lengthy Norm Coleman/Al Franken recount dispute, and Ted Kennedy's death.
So you're telling me there's a chance!
https://tenor.com/view/dumb-and-dumber-lloyd-theres-a-chance-jim-carrey-gif-11098164
Seriously though, if you're telling me the goal is to find a way to pass Federal policies without getting broad support from the governed, are you SURE we're the good guys?
And despite this historic occurrence of one party having 60+ senators, they barely got anything done due to the filibuster. Somehow all the senators decided by simple majority (via action or inaction) that you suddenly need a 60% majority to pass most legislation.
I will vehemently oppose all efforts to get rid of the filibuster. I don't want one parties half baked ideas. I want compromise legislation. Where both sides are listened to.
Then you want to get rid of the filibuster. The filibuster prevents bipartisan legislation. From my understanding, since reaching 60 votes is functionally impossible, the Senate instead settles for doing most of its legislation via bizarre workarounds like budget reconciliation, and then mostly on party-line votes.
The problem with this argument is that both parties pass stuff with reconciliation all the time. Which only requires 51 votes, or 50 if you have the VP
The policy awfulness of the next four years is likely to make healthcare policy a lot more relevant. We're heading back to the days of pre-existing conditions and $1m lifetime caps (will that even buy you half a chemo treatment in 2026?) Insulin prices are going to go crazy again.
We're going to have a big problem on our hands in 2029 or 2033 and someone is going to need to fix it. The question is *how*. Matt seems to believe that "let's just pass a wonky tax-incentive mess like Obamacare again" is going to be the right policy/political answer. To determine whether that's the right answer, I'd ask the following question: *did that approach work out well last time?*
Is it really true that no reform is possible without a Democrat trifecta?
Maybe instead the solution is to work across the isle for bi-partisan solutions. Biden was able to get several big bills through the filibuster by allowing compromise. I'm sure the same would be possible here.
It's funny to see this is the top comment when I read Matt's post completely differently. The intra-left healthcare fights are the exact opposite of "vague", they are in fact highly technical and detail oriented even though all of the actual implementation details will be highly contingent on the votes available in the Senate and House. If anything, I think Matt is saying that Democrats should be *more* vague rather than less.
I’m genuinely just constantly surprised how fucking stupid people are talking about healthcare policy.
Like the number of my friends who will confidently assert that every other country in the world has a model like the UK or Canada’s is just mind blowing. And if I mention to them something like all payer rate setting as a key piece of most countries healthcare it’s like I’m speaking some weird language. Like all the technocratic stuff you get from reading health reporters is just uninteresting.
What’s especially frustrating is several of the most Sanders’s pilled people I know I met as an English teacher in Korea and thought the system was wonderful . Which I don’t fully understand all the details of but it’s not like that at all.
In fairness, the healthcare system is really hard to understand. My mom works in health insurance (which has also obviously made this bloodthirsty anti insurer rhetoric extra infuriating to me) and the sheer breadth of complexity she deals with daily amazes me. And of course is never accurately contended with in our political discourse on the subject.
I think the riposte from M4A people is that this is one of the selling points of M4A; cutting down the complexity involved. I think the M4A people way oversell this point (figuring out what procedures are worth the cost or not is almost by definition going to be difficult no matter what system you have). But I say oversell, not completely wrong about for a reason.
Many people also seem to be under the impression that nothing would be denied under Medicare for all - ‘free and unlimited’
Would you put Bernie Sanders in that camp?
I’m obviously being facetious here, I actually trust that he has a sound understanding of the healthcare industry and the trade offs around reform. BUT read this explainer about how Vermont’s Medicare for all failed. Sanders seemed pretty checked out and unhelpful in the process of bringing his healthcare policy dream to his own state!
https://www.washingtonpost.com/national/health-science/why-vermonts-single-payer-effort-failed-and-what-democrats-can-learn-from-it/2019/04/29/c9789018-3ab8-11e9-a2cd-307b06d0257b_story.html
Sanders believes multiple different brands of deodorant should be illegal and underestimates the cost of his M4A plan by at least half.
IIRC California looked at a statewide M4A type scheme and it would cost half their existing yearly budget.
Not only did that end up more expensive than it's backers thought, it's also something that needs to be done federally for the same reasons insurance companies are desperate to avoid a "death spiral" by attracting the sickest patients.
Why would you use multiple types of deodorant? Wouldn't that smell weird?
He proposes a level of universal public coverage way out of step with what most countries of the world (many of whom do indeed have universal coverage) covers.
When the 2020 primary discourse reached that point was so surreal.
I agree with you that that’s a fundamental question.
I’ve never heard Sanders frame it in that way.
I feel like it’s the obvious implication and the basis of left wing politics: prioritize ensuring wealth/growth is shared by all (especially poorest Americans) even if re-distributive bucket is leaky and will lead to lower growth overall.
What’s closer to Sander’s vision is that he thinks the limited supply of health care should be rationed based on need than income (or ability to pay). The tradeoffs are whether rich people should be told you will get the same level of care as poor people in America and you can’t get ahead in line. That is the thing that countries like Canada are able to pull off and is the thing leftists want implemented. I think they will be ok if level of care is average but is same for everybody rather than a two-tier system where poor people get terrible care/denied care but rich ppl get the best care.
Ppl can disagree politically with leftists (I certainly don’t agree with Jacobin editorial board) but I find ppl pretending that the leftists just don’t understand tradeoffs or Econ extremely stupid. It’s a moral question on how to organize a civilized society, not just a wonky technocratic problem to arrive at the sweet spot.
I think it’s harder to implement Medicare for All on a state level, especially a state like Vermont where approx 20% of the population is above 65. Obv the imp thing about making health insurance work is having enough healthy people to be in the program to socialize the cost for caring for the sick (IMO socializing health care nationally would not just be a transfer from the wealthy to the poor but also a transfer from the healthy to the sick). Vermont’s population is too small, limiting the size of the risk pool. Larger, national systems benefit from economies of scale and can balance risks costs across a diverse population, making it easier to fund and sustain.
Anyway I don’t think health insurance on a national level is that hard to understand, of course there’s no unlimited supply of care. Broadly, it’s whether a country wants to ration that supply of care by need or income. IMO a civilized society should at least have a floor of care guaranteed to everyone.
Wow
This is so true. Most people I know believe that Medicare is NHS-style free, universal coverage. They don’t realize it basically mimics private coverage for people who don’t have employers to provide it - there premiums, deductibles, copays, and coverage limits.
What is maddening about Medicare for All is that proponents like to claim that every other country has a system like it, but in fact there is no country on earth that has a system half as generous. They all have limitations.
This isn’t the case in Canada with direct medical care where we ration the care with long wait lists for specialists and procedures (triaged of course) and by not providing enough family doctors to the system.
It is mostly the case with all of the medical needs outside of that envelope (drugs, dental, physio, eye care, etc).
Also, the whole system has degraded especially since the pandemic where it’s definitely affecting outcomes. The system needs some combination of money and reform but people have yet to elect politicians who will significantly effect either of those.
So yeah, the politics never ends.
NHS is explicitly limited, via NICE. It's not a secret at all but people seem to willfully ignore it.
And NICE is probably the best way to ration care, IMO.
Yes! I have a friend who is very pro single-payer and works in Dem politics, but she herself had an elective tonsillectomy. I can basically guarantee that would never happen under a single-payer system…
Yes, they’re conflating it with the VA (if you have 10% or more disability rating)
"Who knew healthcare could be so complicated"
They’re not stupid; they’ve been deceived by someone who they trusted and they had a reasonable expectation that he knew what he was talking about. Bernie Sanders has been going around the country for years conflating a bunch of different concepts. Universal health care, which every other developed country has and every Democrat supports, and single payer health care, which only a handful of countries have and is controversial in the Democratic Party. So when someone proposes a plan that resembles the system they have in The Netherlands or Switzerland they’re denounced as a corporate shill.
He also conflates “Medicare” the actual insurance program that exists in the real world and has limited coverage, premiums, copays, and deductibles, with a fantasy version of Medicare that covers everything with nothing out of pocket. So now his supporters think that in every developed country all medical costs are completely covered and the U.S. is an outlier when in fact no one does it like Sanders proposes. And some of the most annoying things health insurance companies do (ie not cover out of network care, not cover every procedure, etc), the government would be doing instead if they were running everything because they’re intrinsic to the problem of providing health coverage, not driven by profit motive.
The underlying premise of his campaigns has essentially been that healthcare is simple and everyone has figured it out, and the only reason anyone would say it’s complicated is because they’re bought off by health insurance companies and they don’t care if you die.
They are stupid, or at least accountable for believing misinformation. It's very easy to either research this stuff in a balanced way, or stay out of the discussion if you don't want to.
I guess. It would be nice if more of his opponents would straightforwardly argue that he’s a lying sack of shit whose degrading our public discourse.
>I’m genuinely just constantly surprised how fucking stupid people are talking about healthcare policy.<
In fairness one could write the same words about most every kind of policy. We SBers aren't a very representative bunch, and policy minutiae are boring!
We are still often stupid though, just in different ways :)
Well, that's seeing one side of the policy-ignorance, but what about the (far more common) complete misconceptions that Americans have about foreign healthcare systems, which are mostly driven by (bad-faith) political propaganda and ideological arguments?
The Canadian system is very different from the UK system is very different from the Australian system, but none of the three are "Communism" or hellish dystopias where people die en masse for lack of available medical appointments. But you could have fooled me, hearing all the Conservative takes on universal healthcare!
I agree that Americans should learn more about the (actually very diverse) variety of universal healthcare systems that are perfectly functional in other countries and have different strengths and weaknesses. I have lived under at least three distinct systems in my adult life and I personally found the two European ones far superior even for a young, healthy man to what I had as a "well-insured" American. But they all had flaws. And every one developed in a local context that isn't necessarily practically or politically transferrable. (I happen to think the Swiss model could be a great one to align toward for Americans, but any change would have to really contend with the massive costs and a lot of winners and losers).
Americans should also learn that their own system isn't a unified thing, either. Even your experience as a private customer of Kaiser Permanente PPO is going to be totally different from that of a UnitedHealthcare insuree (for one thing, you're four times less likely to have your claim denied). And providers are all over the place, in terms of quality, something that never seems to come up when people are cherry-picking the one horror story they heard about an individual medical experience in a Socialized medicine country and compare it with the best possible anecdote about how the best doctor at the best hospital saved their loved one and then the insurers were total princes about covering the whole thing without any mountains of paperwork or shenanigans. A plurality of Americans also relies on some public option for healthcare, too, which offers a whole other menu of options. VA healthcare isn't Medicare isn't Medicaid. Medicare isn't even one thing, as Matt rightfully covered!
So what are we even arguing about and proposing here? It's not either-or. There are a bewildering range of options we could (and have) settled upon.
While what you're saying about American conservatives is correct, in the past few years that I've been living in the US I have heard many many more liberals/progressives/leftists call our systems back in Europe "socialist". Maybe it's because I'm at a highly educated environment and US conservatives are rare overall. I think that both sides of the US political spectrum need to hear that German healthcare isn't run by Stasi.
"English teacher in Korea and thought the system was wonderful"
Thought the US or Korean system was wonderful?
The Korean system was what they loved. It is pretty great for a bunch of able bodied young college graduates who basically need to get tiny amounts of care.
…especially since Korean doctors are currently on strike, arguing that the Korean government should license fewer physicians; and their medical system is (AIUI) collapsing in consequence.
I think what’s closer to Sander’s vision is that he thinks the limited supply of health care should be rationed based on need than income (or ability to pay). The tradeoffs are whether rich people should be told you will get the same level of care as poor people in America. That is the thing that countries like Canada are able to pull off and is the thing leftists want implemented. I think they will be ok if level of care is average but is same for everybody rather than a two-tier system where poor people get terrible care but rich ppl get the best care.
I think if you look at the whole list of countries which do this you don’t find a dogmatic anti private insurance consistency. We find much more variance and probably the common theme isnt really single payer but price controls and provision for the poor.
Personally I think employment healthcare is more pernicious than health insurance companies. If I could get rid of one thing, it would be forcing people on employment healthcare to get on a public system. The cycle of one gets cancer, but one can’t leave job now because healthcare is tied up in job, so one goes medically bankrupt is the most dangerous loop. Your boss shouldn’t be holding you hostage.
However, my main contention is that reducing optionality, forcing people to buy in is an important aspect of making socialized medicine actually work. If you have a system where only sick people opt in and young people (who are healthy) just don’t participate, system can’t work. Or if rich people just opt out and all the best doctors leave the public system, again it won’t work. An air tight system where healthy people are forced to buy-in and rich people can’t leave is VERY important to ensure socialized medicine runs smoothly.
From my comment elsewhere:
“Directionally I agree with Sanders on this more than any other Dem. Especially more than I do with Elizabeth Warren. Warren had a proposal where she taxed very rich people more to fund Medicare for All somehow without raising taxes/premiums on the middle class. That is just the wrong way to think about socialized medicine. Sanders proposed a ton of high in the sky shit but he understood that to fund universal social programs like they do in Europe, we need to understand that as a collective, we need to convince people that wealth should be redistributed across many horizontal axes (healthy to the sick, working to the elderly/children/disabled, non-parents to parents), not just the one vertical axis (rich to the poor).
We need to be heavy handed in healthcare provision, not just so the rich subsidize the poor (Medicaid already does that), it is also the healthy subsidizing the sick that needs to be at the foundation of a functional National socialized healthcare system. Everyone needs to bought into that. That’s why it’s important to ensure everyone is automatically enrolled (so young people who have low risk) are forced to participate. That’s what seems hardest to do in America: mandate automatic enrollment and tell rich people they can’t get ahead in line.
If you want to do only do vertical wealth transfer, there’s a tax code for that.”
I would like you to point on the map to the country of Europe. It seems like it’s just the uk because in France, Germany, Switzerland and the Netherlands they all have a floor of coverage and then nicer coverage in private markets.
Which is also what they do in Japan, Korea and Australia and Taiwan. They control prices and allow space for innovation from private insurers.
I remember listening to Ezra argue with Matt Bruenig about Medicare for All back in 2019 and imo Bruenig sounds like a jerk here but is more compelling: https://open.spotify.com/episode/5PePDqgj2aW9sDxFNtWIou?si=O5mgGmmDTLSJdF8d3BRNPQ
I would say a couple of things regarding Europe:
In Europe, income inequality is much lower (Gini coefficients: ~0.3 in many European countries vs. ~0.4 in the U.S.), which means even if there are private options, the gap between public and private services is narrower, making the public system the primary choice for most citizens. Wealth concentration in the U.S. allows the wealthiest to create parallel healthcare systems that weaken public programs by attracting top-tier doctors, which is not that much of a concern in Europe.
There are some European countries where private insurance plays a minimal or non-existent role. For instance, in Iceland and Norway, healthcare is nearly entirely public, and private options are limited. Denmark has a mostly public system, with private insurance acting as a supplementary layer rather than an alternative, meaning that all citizens rely on the public system for essential care. While France, Germany, and Switzerland have hybrid systems, these countries heavily regulate private insurers, ensuring that public options remain robust and accessible. They achieve this through **price controls, universal enrollment mandates, and income-based subsidies** that maintain equality in access. Again I doubt this would work with extreme inequality in America and largely individualistic attitudes of Americans without forcing ppl to opt in.
Obv countries like the UK and Canada (single-payer systems) demonstrate strong public systems without significant reliance on private insurance. While the UK allows private options, the NHS still serves the overwhelming majority of citizens from what I understand?
Private insurers primarily profit from managing coverage, not from driving innovation from what I’ve read. The only benefit private insurance has in managing culture war, the true hurdle would be trying to either get feminist groups to back off demand of covering abortion or evangelicals to support a system covering abortion
Ultimately though, I still think allowing the wealthy to opt out reduces the collective risk pool, increasing costs for everyone else. A universal system requires the participation of all demographics, especially those who are healthy and wealthy, to subsidize the care of the sick and poor. Supply side problems aren’t going to be solved with Medicare for all but how we ration the care would change (more on need less on ability to pay).
One thing I’ve never understood about the U.S. healthcare debate is that there isn’t more emphasis on price transparency. That NYT piece on the guy with the bat bite just completely blew my mind and I feel like mandating price transparency is (a) pretty easy and (b) pretty non-controversial. I’m not sure it ‘fixes’ healthcare but it would greatly improve patients’ quality of life.
I’m genuinely curious how this would work?
Like yeah I know all about that place in Oklahoma that is all cash but like a lot of healthcare is uncertain what you need and will involve some amount of haggling between the payer and payee and it seems harder to do in practice than it would seem.
I went to an urgent care for an injured foot. They spent 30min meeting with me, took lots of X-rays, and applied an ace bandage.
I get the bill and the appointment was $150 (fine), the X-rays AND radiology consult were all together $50 (huh), and the ace bandage was $200! Obviously I would have declined the ace bandage and just applied the one I already have at home myself. But no one ever stops to mention "this 30 second unnecessary action will double your cost "
The challenge is that the actual cost to the patient for what you had done would be different for every single patient that walked in the door.
To know what you're going to pay they would have to know exactly what plan you have with what company, and even whether or not you have met your deductible. Their business model depends on all those various negotiations, so sometimes they get $200 for that ace bandage but lots of times they only get $5. The reason the itemization is done the way it was isn't because that actually reflects their revenue and costs for those items, it's that they have to submit that itemization in that format for the insurance company who has negotiated their prices differently than you.
So sure in your single example you could wisely have skipped the bandage because that was the high priced item at the end of the procedure. But they need to collect the sum total of those charges from the whole number of payors that they have. They could customize a price list just for people walking in the door without insurance, but then it would say $1 for the ace bandage and $349 for the appointment.
The technology exists, when you give your insurance card to the people at the front desk they can tell you in 30 seconds if your coverage works there and if you need to pay a copay or not.
It would be a major pain to implement, not so much because you couldn't surface the prices to the ordering physician, but because you would need to have doctors (or nurses or whoever) walk you through the price of your different options like they're trying to sell you a cabin air filter at Jiffy Lube.
The technology could exist maybe, but it doesn't today. In the example you gave there is no insurance involved, or there is and the prices on your initial statement aren't actually what you ended up paying. The doctor can tell you your co pay for an office visit, maybe even for some basic tests. The doctor's office point of sale IT does not tell the doctor how much they're going to get paid or even which of all those line items they will eventually get paid for. Even in your example, unless you handed them a credit card with sufficient room for the charges up front, they don't know how much they're going to recover from you.
One of the insane ways we ration care in this country is if you walk into that urgent care without a credit card they can turn you away. In which case 1) you don't get care you need, 2) you go to an ER that can't turn you away and just has to hope they recover some costs, or 3) you defer care, get worse, and then go to a facility that can't or out of compassion won't turn you away and it costs everyone more.
The thing about believing that price discrimination will change much is that it assumes things true about other services but not true about healthcare. You spotted a line item you think you can do without, but if they just listed that cost somewhere else what would it change. If the Xray cost more would you have foregone it? If you want a meal you can cook at home, go to McDonalds, or go to a three star restaurant. With healthcare, cook at home, i.e. no treatment is an option, but there's really no 3 star versus McDonald's choices. An Xray is an xray, maybe somebody is a bit more efficient or takes a little less in salary, but there's no qualitatively different version of a correctly read xray, at best you can choose between BK and McDonald's.
The technology does exist today - I used to build contracts that hospitals negotiate with insurers into hospital's electronic medical record systems. Some very small hospitals are still doing it manually, I presume, but any decent sized hospital could put a charge in, calculate the negotiated price, call an API at the insurer that tells them coinsurance/copay/ max out of pocket/etc, and give you the patient responsibility in <1 minute.
The funhouse mirror version of this is veterinary care. I took my dog to the emergency vet when she was bit by a snake, and after they triaged her a vet tech came out and walked through different options that the vet suggested - essentially an antivenom shot and give her back for $800; the antivenom shot plus IV and observation for $2000, or the antivenom shot plus IV, observation and an overnight stay for $4000. Obviously the vet recommended the last one, because it was safest for the dog (and least liability for the vet I'm sure).
If hospitals really wanted to they could set something like this up, but for whatever reason they don't today. In my mind part of it is deference to whatever the doctor thinks is best, part of it is liability concerns for malpractice, part of it is that it wasn't possible most places 20 years ago.
Solution, don't let insurance companies negotiate prices. The price should be the price.
unless you believe in either the abolish all insurance companies and go full free market camp, or the abolish all insurance companies and do M4A camp, that's unworkable. A big part of the point of insurance companies is negotiating price. AETNA gets a better price for all its customers than you or even your employer would ever be able to negotiate.
It's workable, you're right that a big benefit of insurance is that they negotiate on your behalf. There's no reason why that needs to be a feature of the system though; you could have Medicare set prices or the price schedule nationally. You saw how much pushback there was for them doing that for just a handful of drugs though, it would be 1000x worse and require so much more political capital.
There is a lot of low hanging fruit. For instance, I recently had a test at my PCP. When I got the bill, it cost $200. A specialist wants me to have it again, but when I called and asked how much it would cost to get it at the specialists office, they couldn't tell me.
Also, the total charge (not what you pay, but what your insurance company is charged) varies depending on the contract your insurance company has worked out with the hospital. People without insurance get charged the most. That should be more transparent. In any case, it would be good if people realized what the total cost was.
A colleague had a similar health incident (detached retina) in the US and in Germany. His itemization of charges in Germany was 2 pages, and it was clear what every charge was for. The one from the US was dozens of pages long, and we couldn't figure out much of anything. I don't work in a medical field, but people I work with are well-educated. It shouldn't be that incomprehensible.
"People without insurance get charged the most."
I don't think this is true. It's my experience that if a provider thinks you are uninsured, they will likely cut the bill in half or more immediately if you will pay. Knowing that if they don't, lots of cash customers just won't pay so the facility will get pennies on the dollar by selling it to debt collectors.
You are correct, the list price is usually the same for everyone. The negotiations happen after that with different insurance providers writing off different amounts based on their contracts with the hospital.
Basically every hospital will have a self-pay discount, and almost all will have higher discounts based on your percentage of the Federal Poverty Level (sometimes up to 500% of FPLA which covers most of the middle class).
So if you are middle class but uninsured (self employed, between jobs) you get absolutely destroyed.
Yup. At least nowadays there's the option for insurance on ACA exchange.
Worst case IMO in our current system would be someone 60-64 (pre-medicare), middle class, who got laid off but has enough savings to retire. If you have some niggling health problem you need preventative care for you're probably stuck paying $1,000/month for a high-deductible plan, just so that your insurance will negotiate your drug prices down.
Low-hanging fruit would be getting more people into something like a Kaiser Permanente model, where the insurer owns the hospital and directly employs everyone in it. Then if you have Kaiser Permanente insurance and you go to the Kaiser Permanente hospital, you may not know in advance exactly how much you’ll be billed, but you can at least be sure you won’t get wild out-of-network charges afterwards.
In Pasadena, where I used to live, is where Kaiser has their SoCal headquarters, but there isn't a Kaiser hospital anywhere close to Pasadena. I always thought that was ironic.
I don’t disagree that it is complicated but I also don’t think progress here is impossible. We already have seen progress with PBMs and introducing transparency to pharma pricing. The next step should be basic treatments and common ailments. Then work your way up the ladder as systems get more efficient.
I think power markets are a decent but incomplete comparison as the cost of generating power in a given minute is generally unknown to the consumer at the time of consumption. But we don’t just have consumers get billed for whatever the settled cost of production is because that would be insane. Instead we’ve erected a structure of settlement where the utility normalizes the costs so the consumer has certainty. In theory the insurers would fill that role in healthcare but they have no incentive or mandate to do so. But to have a functioning market for anything the consumer needs to understand roughly what price they will pay for the product/service.
The question is who should accept the risk of a procedure being complicated. It seems like doctors would be in a pretty good position to accept that risk if we mandated it. Sometimes a procedure is easier than expected, sometimes harder, but things average out over time. Things don't really average out for the patient over time, they just experience a crapshoot every time they have an operation.
I was doing research on how much a medical procedure I was considering would cost and my health insurer actually does list negotiated prices on its website for each in-network provider. So, in theory, this could let me price shop. The catch is that the prices are listed for each medical code, which are basically indecipherable to me.
That's a problem generally, because coding is so complex and each doctor has leeway on what to order it's hard for a person to shop for how much it would cost. Even if you know the particular procedure you want done (knee arthroscopy, for instance) you still have to figure out if you need to account for anesthesia, pre- and post-imaging, medical equipment, etc etc etc.
There are some common procedures that are commoditized (knee replacements and cochlear implants come to mind) and you should be able to get an all-up price, but they're a small portion.
I’m not an expert but hasn’t there been significant action on price transparency in the past few years?
Yes, it's much better than it was 15 years ago. I'm not sure if it was the ACA or a separate bill, but the hospital is required to give you an estimate: https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency/
I was hoping someone would say this - we talk a lot about how important cost/benefit analysis here at SB, but healthcare is one area where the consensus seems to be that providers should not take cost into account when creating a care plan.
If it was mandated, or high demand, the technology exists where when you see the doctor they can submit a few options for what they recommend, get an estimated cost from the insurance, and walk through the options with the patient. That's what happens when I take my dog to the vet, for instance.
I think there's an aversion to having a doctor look at prices and have to say "hmm it would be great to have an MRI done... oh wow this guy has a $20k deductible? His aorta is probably fine, let's do an ultrasound on the rest of the heart and see if anything turns up."
Yes pricing transparency is necessary. But I think to get it you have to ban a provider charging different prices depending on who's paying
I don't really understand what price transparency would do. No industry has price transparency. Every seat on a plane was sold at different price. Every hotel room. Every scanned price in the grocery store changes daily. Amazon changes the price of the same item at the same time for users with different cookie history. Price levels are just where negotiating power meets in the marketplace.
Yes, but in all of your examples, the price is known to the purchaser before the purchase decision is made, which is I think a necessary (though not sufficient) precondition for things like competition on price and cost-benefit decision-making by individuals.
I think that’s what people mostly want when they talk about price transparency in healthcare.
How many medical procedures or treatments have you had in your life that you would have foregone if you knew the price ahead of time?
Not so much foregone as taken the competitor who listed a lower price.
None. When I was hospitalized I got lucky and didn’t end up having any out-of-network billing issues, so I hit my annual deductible and that was it. But then I’m relatively young and relatively healthy and relatively well off.
But also I’ve never comparison shopped between doctors or hospitals on price, or even tried to do cost-benefit on various recommended tests or medical procedures.
I have comparison shopped on prescription meds, or just forgone them, because it is possible to find out how much a prescription will cost given your insurance, decide that’s too expensive, and then ask the doctor to change the prescription to something else that will cost less. Also, I have comparison shopped with dentists, because if you don’t have dental insurance you can just call and ask how much they’ll charge for stuff and they’ll tell you.
But yeah, “Necessary (but not sufficient)” is definitely doing work in my original comment.
I read it different. I think what they want is a single price across all patients and that's just never going to happen because it doesn't happen in any industry. But agree to a point that healthcare is unique in post-action billing (e.g., that $200 ace bandage example uptread) but those examples are just rounding errors.
I don’t know, my uninsured girlfriend just paid $800 for a basic office visit, at a community nonprofit healthcare facility no less. My insurance has never paid more than $150 for comparable care at fancy concierge clinics.
If it were a question of her having to pay $150 then being uninsured is no big deal. But the penalty for being a private payer is intense.
Just like with pharma benefit managers these companies are introducing unnecessary complexity to make it hard to understand pricing so the companies can rent seek and keep higher profits.
Competition requires pricing transparency
When you are at a super market you get to see the price for each good, and then choose. That's what we need.
Mandate the same price no matter who pays, then mandate you post it online.
One benefit of insurance that gets little mention is that insurance companies negotiate wayyyyyy better prices then those you get if you don't have insurance - even if your deductible means you have to pay out of pocket. It's not financially viable even for someone with resources to pay the raw prices billed.
I got some lab work done by a major nonprofit hospital chain in NY, and they neglected to enter my insurance information prior to billing me. I have a high-deductible plan, so I was always going to be paying for it. The prices that were billed were more than 5x the prices I ultimately had to pay once they correctly noted my insurance.
I think this is a bit of a scandal that affects the poor (uninsured) suckers least able to pay. It's especially a scandal for things done emergently, like appendectomies.
The thing is, people who are billed at those prices generally don’t pay them because they are uninsured and have few resources. The providers then write them off as “charity care”, greatly inflating the amount of charity they provide relative to their actual revenue and profit.
At the hospital I worked at, these patients (even with minimal resources) would be given the option to negotiate a payment plan, likely with reduced rates. If they just tried to disappear, they'd be sent to a collections agency.
I always thought that charging hugely inflated prices was poor financial strategy, because I think the bills that resulted would be so terrifying that poor patients would just try to lie low rather than attempting to pay or negotiate. Uninsured patients generally weren't the most savvy patients.
And, I promise you, if a patient with any means but without insurance turned up for an appendectomy, they would be pursued mercilessly.
Right. But the difference between the nominal charge and what is recovered by the payment plan is counted as “charity”
Very much agreed, I think we should ban providers charging different prices depending on who's paying. It shouldn't matter if you are paying through cash, insurer, or government program. Make the price, the price, and then mandate that you post it online.
This is a necessary condition for competition to work properly IMHO.
That and I would ban 3rd party billing, you should get one bill from the hospital, they hospital can pay everyone else.
After that just focus on increasing healthcare supply faster than demand, and watch costs come down.
That's not practical. It would lead to providers opting out of Medicare and, especially, Medicaid, which pays extremely poorly (as MY wrote in the piece we're commenting on). In our current system, private insurance effectively subsidizes Medicare and Medicaid by allowing providers to make up for the low reimbursement rates of the government programs by getting better rates from private insurance.
I do think price transparency might shame providers into having more-reasonable and more-streamlined rates, and not trying to scalp those without insurance (or those out of network).
And doctors (and others) don't necessarily work for hospitals, so it's problematic to dictate their payment arrangements.
I work for a technology company whose product is used by hospitals and other medical providers. Something of note: about 25% of our customers were insolvent and unable to pay their bills (until we went through and dropped a lot of them and enacted much stricter controls on credit worthiness during our sales process).
This doesn't mean that our customers are a representative sample of all healthcare facilities, of course. But when grappling with whatever the fuck is going on with US healthcare, it should be noted that providers are not swimming in money, at least many of them.
>>it should be noted that providers are not swimming in money, at least many of them<<
Good point. Provider unit costs in the US are the highest in the world, but where does that margin go? Not to most hospitals, surely. Some of it's medical devices, technology and software. Some of it is pharma. But a lot of it is paying for the help. And no, not every MD or RN or MRI tech is driving a Bentley (far from it) but these people need to be very well-trained, and in a high wage country like America, that doesn't come cheap, especially in a sector characterized by Baumol effects. Robot healthcare professionals can't arrive soon enough.
It’s not going to providers.
https://pbs.twimg.com/media/GeeLVj9XwAAEZcm.jpg
Wait, this is a chart of *percentage change in expenditure shares*. So the chart is fully consistent with admin costs going from 5% to 8.75% of total spending. (I have no idea what the 1990 admin expenditure share was).
It also doesn’t tell us much, necessarily, about what’s driving the overall *level* of prices. From the chart, I have no idea if providers are making 3x what they did in 1990 or 0.5x.
This is interesting to me because it runs contrary to the Noah Smith post arguing it’s mostly the providers!
Providers in the healthcare context normally means practitioners like physicians and nurses. The way Smith uses it seems to include hospitals and large care purveyors, which is not how the term is normally used.
I've had this discussion with a lot of folks this week. I'm in the industry and everyone I know uses "providers" to include "organizations that employ practitioners to deliver health services."
When insurers are in the conversations, the categories are "Providers" and "Payers" to delineate, say, hospitals from insurers. The existence of the terrible word "payvider" to mean a mix of the two is also evidence of this.
I think the lesson is we need to all stop using the word "provider" in these healthcare discussion contexts.
>"payvider"
This definitely sounds like one of those words that everyone hated from the moment it was coined, but no more dignified competitor ever got a toehold against it and now it's standard.
Any entity with a NPI, which includes organizations and facilities
It's % change over time, not % of spending.
So it's like a rates / levels distinction? Admin costs are growing at a higher rate but the levels of physician compensation is still very high?
That's my takeaway
Speaking of technology, can we please modernize HIPAA? I have a hard time believing that using a Citrix remote desktop over a VPN to access a virtual windows 8 computer running your medical record software is more secure than a modern web app using best practices. But one of those things jumped through some compliance hoops and the other didn't.
I had a similar experience. The company I worked for provided a technology that in many places is state mandated but in some parts of the country (think deep Appalachia) the facilities couldn't afford it. So they'd sign the contract, we'd implement, and they'd never pay.
Non creditworthy customers are a fact of life, but we seemed to get an unusually large number of them, particularly for an industry that the common wisdom is that we overpay for.
My tentative guess is that just a lot of healthcare facilities are just badly managed, but I don't really know what the problem is.
There's definitely some of that. There are also just places where having any sort of facility isn't economically viable but they're deemed critical to the area so the government subsidizes keeping the doors open and lights on but not a lot else.
Yeah, the "providers are the reap evil ones" articles are the most classic case of motivated reasoning to get to an edgy hot take. It's really soured me on a lot of these newsletters lately.
If there's one thing I've learned over the past year or so (emphasis on the "or so"), it's that getting the left to drop their totemic, one-note, sloganistic, maximalist policy goals in favour of pragmatic solutions is effectively impossible.
Time, instead, to do everything possible to circumvent the left as a relevant player in Democratic politics.
Apologies in advance for the whataboutism, but it is not just the Left.
Sadly many people do not want to grapple with the intricacies of policy, and instead glom on to simplistic snake-oil slogans. And there is little incentive for the media or politicians to be more adult & sophisticated with them - that's not what they want.
No apologies necessary, that is certainly the case.
I can't remember if Matt himself said it, or a commenter here did, but I think we're operating in a space in which the only genuine policy discussion is happening within and around the Democratic party, so I typically focus a lot more on frustrations with the Left because they are at least at the table and able to be spoken to, even if they're doing so unreasonably. The American right are in a corner throwing spaghetti over everything, so while it remains true that they're even worse, I honestly can't begin to think how to engage with them, so I typically ignore.
"only genuine policy discussion is happening within and around the Democratic party"
That's certainly not the case. I can assure you that there are still many Republicans that care about policy even if Trump doesn't seem to.
One thing that I’ve learned about the far left is that they tacitly support terrorism (as evidenced by their backing of Luigi the murderer), and the mainstream left will say things like “murder and terror is wrong, BUT they have a point”.
We saw this same dynamic on other issues plain and clear.
This is really dysfunctional. And really disgusting.
We can have a national discussion on healthcare not as a reward for political violence but because people feel that it’s a priority.
Is this support for assassination primarily from the left? I assumed it was from populists across the spectrum - left, right, and checked-out-of-politics.
Perhaps, but I haven’t heard any R senators say anything like what Liz Warren has said. One Liz Warren comment like that wipes out every Fetterman comment saying Luigi is a creep m.
Perhaps this phenomenon also exists on the populist right, I haven’t thought about it. But what we’re currently seeing here is definitely on the left.
Street-level assassinations are the voice of the unheard nepo-babies.
Big political discussions often follow viral events. Just like we have the gun debate every time there's a school shooting. The issue is there, just lying quiescent, and then people get triggered and it breaks through the noise barrier.
I have no problem with the viral murder leading to a debate on healthcare. The problem I have is with people, like Taylor Lorenz, celebrating murder.
So, yes, "The murder was totally wrong . . . BUT . . . " is perfectly acceptable. They're explicitly saying murder is wrong but then they're using the opportunity to voice grievances about things that really can affect their lives.
If the things were really affecting people’s lives and were important to people, they could have been talking about it last week. Or the week before that. Or the week before that. It shouldn’t take a terrorist attack to animate the media. That terrorist should not be setting the agenda of what topics we are having national conversations about.
Being animated by a terror attack to bring attention to an issue, even if you do the formalities of condemning it, means that that terrorist attack served its purpose. It incentives further political violence.
And the media as a whole should not be incentivizing terrorism.
Sure, they could have been talking about it. And no one would have paid any attention. Just as we could talk about red state abortion laws in the abstract without mentioning young women bleeding out in the parking lot. Just like we could talk about undocumented migrants living here without talking about the murder of Laken Riley. Just like back in the day we could talk about gay rights without mentioning Matthew Shepard.
It’s the way of the world.
Wait...young women bleeding out in the parking lot is not terrorism. The other cases you mentioned are not cases of the media using a terror attack to refocus the attention on the political aims of the terrorist. The Laken Raley murder animated a conversation about the problem of violence by undocumented people, not a conversation in support of the political grievaces of the murderer. Likewise with Mathew Shephard--his murder didn't spark a national conversation in support of the pet political project of the Shepherd's murderer.
None of these examples seem to demonstrate the point I was trying to make, which was about terrorism and political violence.
I was making a point about terrorism and political violence. Terrorists should be made to understand that their political violence hurts their cause, not helps it.
Like I said, anyone who cheered on the murderer is despicable. But to condemn the murder and then to launch into a debate on problems with our healthcare system is perfectly fine in my book.
And here we are doing just that!
(And I don't give a crap what the murderer's "cause" was; I don't care about him at all. But his actions can't mean we *can't* have a debate at this moment on healthcare policy.)
I think you're going too far man. Nobody responsible is supporting the cold-blooded murder. Reddit is not the far-left.
I didn’t say anyone “responsible” is supporting assassinations.
One thing is that I wasn’t limiting my discussion to “responsible” actors.
What I said was that the far left tacitly supports the terrorist attack (and no not only on Reddit) And the mainstream left, while condemning acts of violence and terror, leaves open a “but they had a point” and rewards the terrorist with attention to their pet project.
It’s a dysfunctional dynamic.
I think it might be smart politics and also a top healthcare priority to focus on one thing that I never hear mentioned in the healthcare discourse: ELDERCARE! It's expensive AF!
And, like healthcare generally, almost everyone will need some form of it someday. Something that Americans don't seem to have faced up to. How are you gonna pay for it when you do, fam? Not just the eye-watering nursing home bills that many incur toward the end-of-life (and a lucky few avoid entirely). But also assisted living facilities, home healthcare aids, and even the occasional delivery or transport support for older folks "Aging in Place." That stuff costs!
Other countries have figured this out. My wife worked as for the Swedish Hemtjänst ("Home Service") as a teenager, rushing from pensioner to pensioner to check on them, refill their meds, deliver groceries, etc. Like most home healthcare aids, she didn't get paid much. But unlike in the United States, the service was publicly funded and universal and cost little-to-nothing out-of-pocket to her elderly clients. They had pre-paid for it with a lifetime of tax contributions, like Americans do for Medicare. And, as a result, their lives were much better, they could stay at home longer, health issues were flagged quickly before they deteriorated, and the overall fiscal burden they represented to the state is less. It's a marginal cost compared to the yawning fiscal abyss that faces the American old, both individually and societally.
I will spare you the gory details of what the alternative of this looks like for a family with an older parent dying slowly of Alzheimer's (like my own father), but it is unimaginably bleak in every way, I can assure you. Even if you "do everything right," you will be ruined. Brace yourselves, Millennials! And the burden for this often cascades down to the younger generation, too. So eldercare becomes everyone's problem.
Yes, having gone thru all this and now on the other side, not only is it expensive af but good luck finding a decent assisted living facility or someone to provide at home care. If your parent requires constant supervision, caring for them at home is unbelievably difficult and such an incredible burden for families to take on if they lack money to hire help.
I agree these costs are a problem, but how a government fund is likely to fix it.
Say there were taxes like SS. Well SS (and Medicare) are in trouble because of declining demographics and changing dependency ratio's
Wouldn't this elder care fund be in the exact same scenario?
Note it's important to understand that neither Medicare, or SS is prepaid. Current taxes go to pay for current beneficiaries. Those taxes aren't enough. And they certainly aren't nearly enough to pay for future promised benefits.
the heart of the problem is we've extended life spans a lot more than health spans. We need to reverse that and focus on lengthening health spans. That's the only way to get the total cost down.
I suggest investing 100 billion a year or so into reversing aging research
The costs are a given, it's just a matter of who pays and when. For most Americans, it just comes as a big, nasty surprise at the end and then they're ashamed and isolated and don't tell anyone else. So they go without care and suffer the intolerable effects of that, with an untold burden on family. Or they use Medicaid for the limited and terrible nursing home care it will pay for until they're dead and the state tries to claw back some of the cost from their estate. Or they don't pay their bills and declare bankruptcy. None of these are desirable outcomes for anyone.
The basic genius of the concept of insurance--and by extension social insurance policies like Medicare and Social Security--is that you make a massive risk-pool. MUCH bigger than any one private insurer could in a competitive market. And then you leverage that scale to reduce costs via monopsony, or being a big f*cking buyer (a la Medicare). And then you become the perfect long-term portfolio manager to decide when you're going to need that cashflow and what the actuarial tables look like for your customers. And that's pretty predictable: almost everyone underestimates their end-of-life costs. So you then force them to save for it via taxation. This is what works quite well with the Australia/NZ and Singapore healthcare systems: they just make you actually buy the amount of insurance you'll inevitably need instead of leaving it to people and their unhelpful biases.
And if it's not enough because people are living longer, but with shorter healthspans because we're all too fat? Well, you price that in, just like private insurers do. And what if you have a demographic collapse like we are currently experiencing and the young aren't paying enough for the old? Well, you balance the revenue and the costs by raising taxes, lowering benefits, or being smarter about what you will actually cover because it has a demonstrated benefit. And people hate all that, of course, but we're living in a fantasy world currently where nothing adds up, so we do need to get real.
Are you proposing a pay as you go system ala SS and Medicare, or a privatized one where people actually invest in assets?
SS and Medicare are already broke, we promised way more in benefits that will ever be paid.
It doesn't seem like adding another entitlement would help that.
Great post. It’s astonishing to me that someone actually has to say that of course the president doesn’t have a magic wand to implement his campaign slogan, and that any actual policy change requires persuasion and compromise. How do voting-age “educated” adults not know this?
If I've been red-pilled on anything over the last few years, it's that the large majority of voter are either an idiots or are so driven by motivated reasoning that they may as well be.
In my younger days I thought a lot more of these disagreements were misunderstandings or rational disagreements/different incentives. Then I thought that it was just the MAGA folks. After watching the post-CEO healthcare discourse I'm now very convinced that it's both sides.
You are onto something here. The magic wand idea drove a lot of the disappointment with Joe Biden I think.
Totally agree, the magic wand idea has been one of the recurring themes of the last four years with my friends to the left. Biden just didn't "push hard enough" for [policy X]... with policy X being every single thing on the progressive wish list, including things struck down by the courts (e.g., student loans) or things on which he did spend a lot of political capital and made progress, but not sufficient for progressive advocates (e.g., climate stuff).
The other recurring theme is "Biden didn't message this well enough"--which is also kind of a magic wand idea with respect to an imagined superhuman rhetorical power to make unpopular Dem issue stances (e.g., immigration, anti-drilling) more popular.
It's a truism that Democrats will always blame "messaging" whenever they lose, insisting people really want their policies but are just lied to somehow, when sometimes their policies are genuinely not popular.
However,
> unpopular Dem issue stances (e.g., immigration, anti-drilling
We're pumping more oil than ever. I forget where I heard it, maybe Matt, that there were efforts to counter Trump ads about energy by pointing this out. But it was killed by internal White House / campaign people who didn't want to mention it.
I think voters appreciate simple and verifiable messages. Joe Biden doing an ad saying "we're are pumping more oil than ever, and the United States is now the biggest oil producer in the world" super-imposed over a graph of oil output would have been an easy win.
To be fair, though, his messaging was pretty bad magic wand or not. For most of his term he acted like the communications part of his job was beneath him (when actually it's just he was bad at it/is no longer cognitively capable of it) - and his approval rating reflects it.
The problem was that many of his policies were both unpopular AND just bad (wrong on the merits).
The border in particular.
Also, of course refusing to rein in spending once we realized inflation was a problem
Conservatives aren't the only ones who fall for The Green Lantern Theory of government.
I do wish Biden was a wizard though. Robe and hat and all.
C'mon! Haven't you ever heard of the Bully Pulpit? Well haven't you?
/s
I'd like to make the case for more free market care. Chicago economist John Cochrane used to blog a lot about this, it drove him nuts that the mess that is US healthcare was portrayed as anything approaching a free market.
I'm not sure even he wanted patients individually selecting emergency or major care. But some healthcare can be provided like a normal service with no government or private insurance involvement. In London I can pop down to my local private clinic and get a pretty wide range of services without anyone else's involvement, but Cochrane asserted that in the US regulation is so onerous that it's difficult to offer that. I don't know how much money it'd save because I think most of the cost is in the major care, but it'd just improve quality of life.
https://www.grumpy-economist.com/
https://johnhcochrane.blogspot.com/ (this is where I used to read him, I never read his substack)
A trick I learned recently, which so obvious it seems silly, is if you need a procedure, ask how much it would cost if you paid them cash on the spot. You might be surprised and might just be worth it to you to avoid the hassle
One tweak could be that if you just pay out of pocket with insurance being involved that you could submit the receipt to your insurer to have it count against your out of pocket maximum
Anyone interested in econ should read Cochrane’s blog. The partisan stuff is hit-or-miss, but on everything else he’s way more insightful than Scott Sumner, Noah Smith, or Krugman (who is brilliant, but his writing went to shit after he decided to do political propaganda).
Politics is the most consistent enshittifier of commentators.
> on everything else he’s way more insightful than Scott Sumner
You're saying you agree with Cochrane's views on monetary policy over Sumner's?
I’d say that Sumner is so muddled and incoherent in his thinking that I have no way of knowing if I agree with him. It’s like modern monetary theory: no model clearly telling me where he disagrees with standard theories, just a bunch of self-contradictory prose.
That is classic libertarian cope. Of course regulations effect the market and in a bad market like the US it is clear that they have bad effects. Still, if anyone is selling you a simplistic idea like all regulation is bad then they are ignoring more facts than they are paying attention to.
That’s how it used to be but people ended up foregoing primary and preventive care leading to more serious costs and complications. For really optional things, the Urgent Care storefronts basically already do that.
If I can read the median opinion of people in the US - they don't want socialised healthcare (except for the bits that provide healthcare for them personally), and they also think executives working for private health insurers should be killed for denying healthcare to people.
I have never seen a poll indicating that the second part of your statement is the opinion of a "median" person in the US. Sounds like some online leftist stuff.
Is it leftists? I thought it was popular with populists across the spectrum.
Even if you're right, I think it should be a bigger deal that online leftists have now gone so far as to publicly applaud extrajudicial murder.
Thoughtfully argued, as usual, but no one seems interested in taking on the elephant in the room: Thomas Sowell’s question as to how an intrinsically expensive service such as good medicine will cost less (and thus be more widely available) when overlayed with a government bureaucracy.
The bureaucracy thing is bullshit; health insurance companies have their own bureaucracies, most of out duplicative with one another. A big chunk of savings would come from having just one bureaucracy. The rest would come from monopsony pricing.
All other countries pay way less than the US, and many with much better health outcomes.
It’s very possible…
Those other countries also use price controls to heavily ration care.
Of course. And?
price controls always result in rationing of care. This means either long wait times, or not offering cutting edge care.
https://www.health.org.uk/features-and-opinion/features/the-nhs-waiting-list-when-will-it-peak
Yes there are trade offs.
There are various ways to handle such tradeoffs. For example by having a private system on top of a public system.
The same is true for e.g. construction. That unfortunately doesn't mean that there's a magic fix here, just a theoretical possibility. And the other points raised here are difficult too.
What’s Sowell’ answer to why we pay more than other countries that have more government involvement in healthcare?
There might be some some good critiques around government bureaucracy that he'd answer with, but I think the largest part of the answer is simply that we have more money.
Well, when it comes to cars, appliances, and electronics, Americans spend more but we get more in exchange: bigger cars, more powerful appliances, etc. But with health care we get worse outcomes, not better.
In terms of actual, applied care it seems like we do just fine. There's just not that much difference between getting treated here and getting treated in Europe, and gaps in treatment due to having insurance just don't seem to explain that much of the difference (to the extent they do, it's also a weird sub-argument, ie "those of us who can't spend money on healthcare don't get much from healthcare")
The bigger issues seem to be lifestyle related, obesity, drug overdoses, traffic accidents, etc, which again are partially fueled by the fact that we can spend more on driving, drugs and food.
Okay but again, we pay more for cars and get better cars, we pay more for air conditioning and get better air conditioning, but we pay more for medical care and we don’t seem to get better medical care? Is that accurate?
No, my point is we actually get fine care. If you go into a doctor's office you're as likely to get as good care as a European would. We have worse health outcomes, but that's mostly due to lifestyle
To the extent that we get worse health outcomes, is that true after controlling for underlying health factors like obesity/diet/lifestyle?
I agree we don't seem to get _better_ outcomes, but that could be Baumol at work.
I thought Baumol mainly applied to jobs where technology doesn’t increase productivity, like teaching and string quartets. But I’d think that in medicine, technology does increase productivity? I mean a nurse can’t change a bedpan or give a shot any faster, but there are arthroscopic surgeries now and other methods that should increase the productivity of each medical professional.
The larger issue is I don’t understand why Baumol would apply more to the US than to other countries in this regard.
Wages are way higher in everything in the US. Doctor wages are kind of insane and out-of-control IMO, but we should absolutely expect them to be more than Europe by a non-trivial amount.
https://randomcriticalanalysis.com/why-conventional-wisdom-on-health-care-is-wrong-a-primer/
I think it's true in that our health care has improved due to technology relative to the U.S. of the past. We should get more for the same $$ than we used to.
But the technology is available worldwide(or at least in other rich countries) so it doesn't increase our productivity relative to Canada/Norway/etc
Multifaceted.
1. High pharma profits pay for the R&D for the rest of the world. Literally without those profits a lot of drugs wouldn't be worth developing.
2. Depending on the country we are referring to, US doctors make a LOT more. For example, UK average doctor salary $160k vs USA average of $260k.
3. Newer more expensive treatments often available in the US that's not available in other countries.
4. Other countries often use long wait times to manage healthcare costs.
5. Lack of transparency in pricing makes it hard for competition to work.
6. Healthcare consolidation in some markets.
7. Unneeded care
You cannot use a market mechanism to provision a good that people cannot choose not to obtain. The actual life or death necessity of medical care means that a fundamental aspect of markets, elastic preference, is gone; a man who sticks a gun up at you and says "your money or your life" is not engaging in the kind of market enterprise that actually works on a social or economic level.
And since we're being meta, this question has gotten caught up in this side quest about whether literally every human good should be subject to market dynamics, and pre 2016 you yourself were someone who was not especially fixated on saying yes to that question. But you and guys like Noah Smith and Eric Levitz experienced being yelled at by people who prefer M4A and both moved right on this issue and hardened your stances, thanks to typical resentment-capture reasons.
If it were true that markets could not constrain costs of goods that are necessary to live, then food would cost your entire paycheck.
Food is in fact vastly more mandatory than healthcare. The overwhelming majority of healthcare purchases aren't life or death, and of the ones that are, most are life or death on a slower timeline than starvation.
There may be reasons why market provision doesn't work well for healthcare, but mandatoriness is not among them.
Yeah, when I read the post above, my first reaction was "Has Freddie never heard of food?" People had to eat before doctors ever existed.
Information asymmetry and the acuteness of medical emergencies are two reasons health markets fail. You don’t know what you need or are getting and then you often don’t have time to shop around when your appendix bursts.
Many parts of the health care system aren't subject to market forces.
But many are. I should be able to find out how much it costs to get an X-ray, or a lab test.
ER use is at most 2% of total medical spending. Most medical spending isn't something you have to make immediately with no time to look.
The entire industry is built on hiding costs. Someone told the story in the comments about the $200 Ace bandage, and I had a similar thing where I mentioned to my doctor a spot on my foot and I found out later it $160 for them to dab some liquid nitrogen on it. If a car mechanic worked like that 60 Minutes would be all up in their business.
To use the food analogy you’d have imagine a system where you could only eat certain foods at certain times and you needed a specialist to tell you which ones and sometimes the decision had to be made very quickly or you’d die or suffer some permanent or long-term morbidity.
But I really want to emphasize how the whole "you're in an ambulance with minutes to live" thing is a tiny part of healthcare, and, as far as I know, not any kind of particular outlier in terms of cost containment.
It's not like the rest of healthcare is humming along efficiently but lifesaving emergency care suddenly costs 10x what everything else does.
I really don’t know for sure but I’d be surprised if life-saving heart, cancer and other critical surgeries, diagnostics and cancer treatments don’t make up a significant percent of the system cost.
Cancer is definitely a big deal, but note how we've shifted from "you're in an ambulance with minutes to live" to "you receive a diagnosis that suggests that you take a course of treatment over months or years."
And while these things may make up a significant amount of total healthcare costs, nothing that I've ever seen suggests they are cases where customers are unusually gouged. Again, it's not like "getting tests because you're having digestive troubles" is dirt cheap but emergency care is super expensive.
This makes it really unlikely that the unique properties of life-saving emergency care are driving healthcare costs.
I agree with you, but this is a better argument than the one Freddie made and he's paid to make the case for Leftism.
The word "market" only shows up twice in the post so it seems like an old reply was dug out and used on this post.
Perhaps this is a counter-argument a 40-odd year old whose job is to talk about politics might be expected to have pre-empted... Sorry Freddie!
This oversimplifies a lot.
Say you have a chronic condition where there are three drugs that are effective to treat it. Drug A came out in the 1990s and revolutionized treatment for the condition—the first treatment that was really effective in controlling it. It was very expensive when it was still new but has long since gone off patent and is cheap. But it requires daily dosing and is somewhat of a pain to manage the dosing and some patients experience uncomfortable but generally manageable side effects. Drug B came out in the early 2000s and is generally considered somewhat more effective with fewer side effects, and is dosed once weekly. It’s also off patent now but harder to manufacture and store so somewhat more expensive than drug A.
Drug C came out more recently, is moderately superior on efficacy and side effects for most patients to Drugs A and B, and is also dosed weekly so is a wash on convenience compared with B. It’s very expensive but the price of C will drop down to the level of B once it goes off patent. However the maker of C has recently introduced a new formulation that only requires monthly dosing and so is much more convenient and easy to manage, but that version will still be under patent and very expensive for several more years.
Are you saying there’s a basic human right to free access on demand for all versions of all three of these drugs without making any distinction among them, and that it’s immoral or unseemly to allow market signals to inform or set the price of any of them?
This is almost exactly the same as the living wage argument. I don't think people are paid enough but the official living wage campaign uses insane estimates as the bare minimum human right. At one point it was basically enough to pay for a two bedroom apartment as a single parent with only one 40hr a week job.
"The Bible says employers must support your out of wedlock children and only the devil works two jobs and shares a bedroom"
Water? Food? Last time I checked, most people aren’t eating at “restaurants for all” or starving to death. (Unlike in the Soviet Union or Communist China…)
"[Y]elled at by people who prefer M4A" or "yelled at by people insisting that anything other than M4A is immoral"?
Is Matt not a person who would prefer M4A?
Also, do we know what percentage of medical care is life or death vs. quality of life improving? It seems like narrowingly focusing on the life or death stuff misses a good deal of how our lives could be improved with better health care access.
Not accurate for several reasons, some mentioned in other comments, but the free market idea mostly includes catastrophic insurance as a pole that the free market revolves around. We can socialize the extreme cases and marketize the regular stuff, of which there is a large amount that would not be as expensive as it is now.
As a card-carrying liberal, I would also increase the safety net along other dimensions- but it’s not a great idea to socialize the healthcare industry.
I somewhat agree, but disagree that medical care/health insurance is a good that "people cannot choose not to obtain " I know many people who do just that because of cost. For at least one of them, it led to a preventable death in middle age. It is because of this care avoidance that I am a big proponent of changes in our system.
Are you saying that people *always* prioritize staying alive over *any* other good?
What about smokers, drinkers, speeders, motorcyclists, people who decline chemotherapy, people who don't exercise?
Your thought experiment with the gun implies an elasticity of zero, but not all healthcare services are like this. Certainly there are some where getting the service (say, chemo or insulin) is a matter of life or death, elasticity is zero, and the firm can charge the consumer for all he’s got.
But I would argue that most healthcare services fall somewhere in the middle. If you have asthma an inhaler would meaningfully improve your quality of life. But for most asthmatics not having an inhaler is likely not lethal, so you probably wouldn’t fork over your whole month’s pay to get one, and the firms selling inhalers know this. Same idea for things like getting cavities filled or treating a sprained ankle or getting glasses.
There are a lot of goods with relatively low elasticities (housing, since we all need a place to live; basic clothing, because it can get cold out; transportation, because most people need to get from point A to point B) where markets still function.
I really do think you're the last true socialist in the United States (admiringly). Why isn't your analysis of this grounded in historical materialism?
The modes of production here are the providers, not the mechanism through which risk is shared. If we just had Medicare for All tomorrow, the first thing that would happen is that the insurance company (M4A) would crack the medieval doctor's guild by setting rates (expropriating doctors' salaries).
Then the insurance company (M4A) would ration units of healthcare based on some sort of criteria, maybe democrat decision making or technocratic judgement.
Why is this bad if we just permit the capitalists to do it? It's their jobs to break the feudal baron's back and build out capacity.
> thanks to typical resentment-capture reasons.
:chef-kiss-emoji:
While pundits praise Medicare / Medicaid, those funding sources do not support the current health care system. "Hospitals receive reimbursement from Medicare for only 74% of what it costs to provide care to patients, and from Medicaid for only about 62%. In 2022, Connecticut hospitals lost $1.55 billion from Medicare and $1.23 billion from Medicaid." https://cthosp.org/issue/hospital-finance/#:~:text=How%20hospitals%20are%20paid,$1.23%20billion%20in%20Medicaid%20losses.
That is why private insurance pays more than the cost of providing care, to make up for the government paying less.
My aunt who is a pediatric PT for disabled kids says she takes a couple of Medicaid kids , but she sees it as partial pro bono work because she’s losing money
Kind of like "companies got greedy in 2021 which caused inflation to go up" that has never made sense to me; a hospital's business office is going to try and make as much money as possible. If all of a sudden Medicare paid twice as much I don't think hospitals would lower their prices for private insurance, the prices they can charge are higher because private insurance has less negotiating leverage.
I think that the concern of senior citizens that if Medicare were expanded, their coverage would get worse is not unfounded. Providers accept Medicare now for a few reasons, even though it doesn't reimburse that well. They are pressured to do so by larger healthcare and hospital systems, if they are specialists they are pressured to do so by referring doctors, and honestly some of it is a feeling of obligation to (the limited number) of elderly people. Once you accept Medicare, you can't really pick and choose which Medicare patients you'll accept, and if Medicare became an option for the entire population there's a good chance many docs would just opt out.
Cutting current physician salaries and simultaneously raising their taxes (which is what large Medicare expansion would entail) would be bad for physician supply
Remember though that the current supply of physicians is artificially low
Yeah I think the idea is the other way around, increase supply which would probably drive down salaries.
But then we would have more physicians, not fewer
Yes, that's what we want.
It is, but straight cutting payments to providers will not get us that, which is what any Medicare expansion will entail.
Yes, until the actual bottleneck is no longer saturated, you’d expect any fall in pay or working conditions to cash out not in reduced numbers but in lowered quality, as more of our very best and brightest go into finance or whatever.
I was going to become an anesthesiologist when the income was $472,000, but now that it's $432,000, no way. I'll just become a plumber.
I think the concern around salaries is broader, and probably applies to nurses, NPs, etc.
And with MDs, specifically, marginal salary concerns do often come into play when they start to think about retiring, scaling down their practice or shifting to other lines of work, like advising insurance companies, working with lawyers on patents, etc..
I was an ACA enrollment volunteer from 2014-2021 which got me into the weeds of health policy design and implementation. A big part of why the M4A wars are so frustrating (and pointless) is that that there is just a lot of sloppy thinking and factional point-scoring masquerading as policy proposals. Going back to the 2016 primary (which we will never f***ing escape), the Sanders-verse got a lot of people on the left to believe three major lies:
1. Universal coverage is the same thing as single-payer.
2. All other developed countries have single-payer systems.
3. In these systems, people get an unlimited and instantaneous supply of care with no out-of-pocket costs.
Recognizing reality - that countries can and do achieve universal coverage with a variety of payer arrangements, and that some measures of cost control and rationing care are unavoidable - is really important if we want to develop workable proposals. For better or for worse, the architecture of the ACA is a lot like the Swiss and Dutch systems. With the addition of a broadly-available public option it could look more like Germany or Japan, while full M4A would be a heavier lift in terms of both revenue and disruptiveness.
I wish we could have these conversations honestly. But spreading the three major lies above is better for factional infighting and attacking moderate Dems as evil sellouts, and I suspect this is a big part of the reason they have been so difficult to dislodge.
The universal coverage vs. single payer is especially annoying. I have a hunch that healthcare coverage here in California is more generous than some European countries, since we offer coverage to some undocumented immigrants (through DACA provisions), and there are plenty of states that have a lower % uninsured than we do.
Why should seniors get gold plated public benefits that aren’t available to anybody else? Let’s make sure there is a basic health plan available to all ages before we expand what Medicare covers. Home care? Please no. A subsidy that encourages frail seniors to remain in homes that in many cases do not have the accessibility and safety features that they need is a recipe for more falls, more hospitalizations, more social isolation…all problems that those of us who have actually cared for aging parents are well aware of. If somebody is wealthy enough to hire in home care and maintain their home, then fine—it’s a free country—but the working age population should not be asked to subsidize this choice. Not only is is a safety issue for frail people, it keeps family sized homes off of the market and contributes to the housing shortage. A single 80+ year old living in a 3 bedroom suburban home is far too common. Why not create an incentive for the elderly to move to continuing care communities, or even apartments/condos where they are not dependent on cars, and where there are nearby services?