Your point about about prices rising faster than utilization is very important, and I think ultimately incorrect. The question of where does our high healthcare spending come from, prices vs quantity, is THE question facing any healthcare reform. The less our spending is due to higher prices than peer countries, the less juice there is for any reform scheme.
You cited the Niskanen essay, which got that graph from a Health Care Cost Institute report. But it's not clear to me that the HCC paper really disaggregated intensity from utilization. Utilization x intensity of care is quantity, not utilization alone.
I've been influenced by the Random Critical Analysis critique of US healthcare, to be upfront. This is a very hard problem to conclusively analyze, but quantity and not prices appears to still be the main driver US healthcare spending.
Matt- First, thanks to the link to Lawson Mansell’sexcellent article , of which I had been unaware. Encourage others to read it.
I’m am glad that you were willing to enter this thicket. But did not see any meaningful clarification of your goals AMD how you measure whether any proposed changes would improve the system in your opinion. But I a truly encouraged that your hope for improvements were not based on a perceived need to spend more money.
I would only offer a few observations based on my 82 years of utilizing the system for my self and my family, of being an investor in various aspects of the system , and from my perspective of someone who was an actuary early in my career( and still maintains membership in the Actuarial Society and opined to my insurance employer at the time( about 60 years ago ) that the concept of HMO’s had the fatal flaw of incentives being misaligned between the sellers ( insurance companies) , buyers ( large organizations ) and consumers ( the individuals utilizing the service).
Over the decades the many problems of these misaligned incentives have only been distorted further by government regulations with unintended consequences.
Unless and until these misaligned incentives are recognized and addressed in any proposed solutions, the problems will continue to proliferate and the desired outcomes be in conflict with each other and the proposed goals of the systemic change.
So let’s quit the partisan bickering, the political grandstanding, and the doomsaying by those benefiting from the distorted incentives in the current system ( perhaps starting with but certainly not limited to the drug companies andPBM’s) accompanying every effort at reform.
Every proposed attempt at reform of which I am aware does a horrible job of both aligning incentives and setting priorities. .
Case on point, seldom will any proposal begin by saying consumers should be responsible for the purchase of what is arguably the most important product ( or perhaps coequal with their residence) that anyone will ever purchase. So the lites ( employers, government bureaucrats, etc) are in charge of monitoring and controlling those decisions. What would happen if the government and your employer were to decide that they should tell you which car or stove to buy ( although the Biden administration was attempting this) or grocery store to shop at or where to vacation or airline to use. Those decisions would be as totally screwed up as is the paternalistic healthcare system we have today.
Repeat - aligned incentives at the individual level are the most important ( but far from only) thing that need to be implemented for any reform effort to work. Start by at least unburdening healthcare users from being subject to the lie that Obama told and the government enforced by making it reality again after all these years of enforcing a system that did not let the majority of people keep either their insurers or their doctors if they liked ( were satisfied) them.
Matt- First, thanks to the link to Lawson Mandel’s excellent article , of which I had been unaware. Encourage others to read it.
I’m am glad that you were willing to enter this thicket. But did not see any meaningful clarification of your goals AMD how you measure whether any proposed changes would improve the system in your opinion. But I a truly encouraged that your hope for improvements were not based on a perceived need to spend more money.
I would only offer a few observations based on my 82 years of utilizing the system for my self and my family, of being an investor in various aspects of the system , and from my perspective of someone who was an actuary early in my career( and still maintains membership in the Actuarial Society and opined to my insurance employer at the time( about 60 years ago ) that the concept of HMO’s had the fatal flaw of incentives being misaligned between the sellers ( insurance companies) , buyers ( large organizations ) and consumers ( the individuals utilizing the service).
Over the decades the many problems of these misaligned incentives have only been distorted further by government regulations with unintended consequences.
Unless and until these misaligned incentives are recognized and addressed in any proposed solutions, the problems will continue to proliferate and the desired outcomes be in conflict with each other and the proposed goals of the systemic change.
So let’s quit the partisan bickering, the political grandstanding, and the doomsaying by those benefiting from the distorted incentives in the current system ( perhaps starting with but certainly not limited to the drug companies andPBM’s) accompanying every effort at reform.
Every proposed attempt at reform of which I am aware does a horrible job of both aligning incentives and setting priorities. .
Case on point, seldom will any proposal begin by saying consumers should be responsible for the purchase of what is arguably the most important product ( or perhaps coequal with their residence) that anyone will ever purchase. So the lites ( employers, government bureaucrats, etc) are in charge of monitoring and controlling those decisions. What would happen if the government and your employer were to decide that they should tell you which car or stove to buy ( although the Biden administration was attempting this) or grocery store to shop at or where to vacation or airline to use. Those decisions would be as totally screwed up as is the paternalistic healthcare system we have today.
Repeat - aligned incentives at the individual level are the most important ( but far from only) thing that need to be implemented for any reform effort to work. Start by at least unburdening healthcare users from being subject to the lie that Obama told and the government enforced by making it reality again after all these years of enforcing a system that did not let the majority of people keep either their insurers or their doctors if they liked ( were satisfied) them.
I'm curious about what percentage of healthcare spending is for expensive end-of-life care with extremely low efficacy rates. I also don't know what Medicare pays for along these lines.
I am fine if people want to pay for care that only serves to keep them alive in name only, but it seems to be a clear area where not providing that care as the default could represent outrageous cost savings.
But anything that leans into the "death panels" territory has been a nonstarter politically.
Certificate of Need laws, which limit supply of healthcare, are actually an important tool for managing total healthcare spending. As the piece notes, perhaps half of all health spending is basically useless (or harmful)! If you build a new hospital or nursing home, it will get used. This is a situation where supply generates demand. Especially since patients and doctors (who directly generate demand) have basically no incentive to keep utilization low.
I think a nice interim step would be Medicaid Buy-In for Small Businesses. That feels very doable, and would attract support from restaurants and two-man-and-a-truck plumbing outfits. I think a lot of states could do it on their own.
Problem is lefties will move on to the next topic in a week or two. At least healthcare is more high minded than the rights of day traders or a fake panic about rail safety.
Exactly. We have price-controlled health care for seniors via Medicare and price-controlled health care for the poor and for kids via Medicaid. Charting the next steps to expand coverage from both ends of this spectrum makes sense.
BUT, as we do so, we shift costs to the middle-class and to working age adults for the private health insurance they rely on. Caught between the pricing power of hospitals and drug companies and their own bottom lines (Noah Smith's point), private health insurance companies respond with higher premiums, deductibles and copays and, as illustrated by the practices of United Health Care, by limiting access to care.
The ACA hasn't been able to keep up with the cost shift problem and appears to be impotent in regard to access to care (as opposed to its success in access to coverage for those with pre-existing conditions). Paying for health insurance is one thing, which people resent when costs rise, but they resent even more, personally and viscerally, when they can't get the care they're paying for.
The gatekeeping function of controlling access to care is a problem for both public and private plans, but it's most acute in the private health care industry. Access to coverage in that market is where the next phase of politics and policy-making on health care reform at this moment would appear to be taking us.
Finally, this "moment" is also likely to make repeal or retrenchment of the ACA at lot more dicey for Trump and the Rs in the Congress. If they are smart, they'll focus their threats (and promises?) to tackle the ACA by focusing on access to care (although, if they do so, they are likely to do so more performatively than substantively).
Key question: What are the policy reforms that can most effectively address the problem of access to care in the private market?
Reposting a nested comment since it's my most coherent thoughts on a free market option.
Technology and legislation has advanced enough that even with the US's healthcare ecosystem you can find prices if you are committed. I used to build contracts that hospitals negotiate with insurers into hospital's electronic medical record systems. Any decent sized hospital can 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 healthcare 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 - antivenom and give her back for $800; antivenom plus IV and observation for $2000, or antivenom 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 today they don't. In my mind part of it is institutional inertia, part 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 technically possible even 15 years ago. My question for foreign readers - does this happen in other countries? Does your doctor say "I'd love to get an x-ray done but it's going to cost you (personally) $200?"
Should we talk about how Americans' unhealthy lifestyle - crappy food, sedentary lifestyle, high stress levels, not enough sleep - affects healthcare costs?
I know the school of thought that says, "But all these things are actually GOOD for healthcare costs! Better to have someone die of complications of diabetes in their 50s than live into their 90s and require increasingly expensive care along the way!"
First of all that's horrible, and second of all, is that necessarily true, or can we work toward a world in which it's not true? Meaning, can we focus on extending healthspans, not just lifespans? I've been reading that "Blue Zones" book, and I have no idea how scalable that is, but the point is, it's possible to grow old without horrible debilitating ailments. Should we focus more on prevention? Like, Alzheimer's Disease is horrible and incurable, but I've also heard it referred to as "type 3 diabetes" by some because high sugar consumption is a risk factor.
I don't know. I realize that telling Americans to eat healthy and move more is going to be about as popular as a carbon tax. I don't know if there's any way to gently nudge people in the direction of healthier choices. (Ozempic to the rescue?) What do you all think?
"Dr Newman showed that the highest rates of achieving extreme old age are predicted by high poverty, the lack of birth certificates, and fewer 90-year-olds."
It's a very dismal area of thought. I had a conversation with someone during the start of COVID around how it would impact US healthcare expenditures; in the short term, sure a lot more people were in hospitals. But long-term a disease that kills the least-healthy members of your population is going to bring down the sticker price for care long-term.
Whenever there’s a discussion on healthcare policy, we have to remember that Democrats could pass whatever reforms they want in several deep blue states, but have so far not created universal coverage in any state they govern.
The ACA was modeled off a plan signed by a Republican governor of Massachusetts (which while having a low rate of uninsured people still has 1 in 40 people being uninsured).
States can really be a laboratory for democracy on this subject. But Democrats in deep blue have largely chosen incremental tweaks rather than fundamental changes in the healthcare system.
The only major group here in CA that couldn't get coverage if they wanted it are undocumented immigrants*, and even then we offer insurance to the DACA group.
CA took a crack at Medicare for All (ended up being too expensive), but large scale healthcare changes really need to be federalized otherwise you get the state equivalent of an insurer death spiral.
A system can be universal without being "Medicare for All."
Universal means everyone is covered. It doesn't mean 7% are uncovered. Yes it's possible to have a system based on private insurance getting to universal coverage. Ask the Netherlands, Germany or Switzerland.
It's available to 4/5ths of them they just haven't signed up. What happens if you don't sign up for insurance in one of those countries? Supreme Court here struck down penalties for being enrolled.
“ but have so far not created universal coverage in any state they govern.”
All blue states have universal coverage. If you’re poor you get Medicaid. If you’re not poor enough for Medicaid you get subsidized ACA and those that can afford it pay into whatever level of plan they want. Just like how it works in Germany or the Netherlands or Switzerland.
In the Netherlands, if you don't sign up for health insurance, you get multiple calls warning that you need to do it. If you still don't do it, you have to pay a fine and then you are given another warning, and if you still haven't gotten insurance, one will be arranged for you (with another fine).
That's a far cry from the American "mandate", which was originally a slight tax (much less than health insurance premiums) if you didn't register for health insurance that was later set to $0 in 2019.
In the OECD, 28/39 countries have >99% coverage, with most of these being >99.9%. That's what I mean by universal.
There is no blue state (or state in general) with an insurance rate of over 97.5% (Massachusetts) which would put it at 30/39 for the OECD.
California has an insurance rate of 93%. New York, 94.8%. Washington State 93.6%. Illinois, 93%. Hawaii, 96.1%. None of them are universal. These are on par with Estonia, Chile, and Slovakia.
Germany has an insurance rate of 99.9%. Netherlands, 99.9%. Switzerland, 100%. So obviously it's not "just like how it works in Germany or the Netherlands or Switzerland."
It sounds like none of those countries have universal healthcare, because wouldn't "universal" mean 100% enrollment?
I kid, I kid, but to me it's not a moral failing if insurance is available and people don't opt into buying it. Health insurance is a bad deal if you're a young, healthy person - the mandate was a giveaway to insurance companies so that healthy people that usually don't need insurance would sign up.
The more supply is increased, the more unnecessary care will be delivered. Certificates of Need, in principle, are good. So is having competition for scarce slots in medical school. There is indeed a lot of gaming by health care professionals and probably more of it in a city well supplied with health care facilities, like D.C., than in the rural South. Frankly, consolidation of health care into large conglomerates of providers is the best solution to this. The problem with UHC (if there is a problem) and also with Medicare is that they can only decide to pay or not to pay. The providers have no incentive to economize. It is true, that Medicare and other insurance companies have erected a thicket of qualifications to screen out obvious fraud, but that is no substitute for a system that rewards a bit of parsimony but not too much. The art will be to strike the perfect balance.
>The problem with UHC (if there is a problem) and also with Medicare is that they can only decide to pay or not to pay. The providers have no incentive to economize
Is this true? Not sure about this take. I thought insurers have a maximum amount they'll pay for certain procedures? So they are economizing
Oh, absolutely they DO pay a reduced fee to providers! in the case of Medicare and Medicare, it is quite reduced. The point that I was trying to make is that providers may try to pad the bill by ordering tests or doing procedures that may be of some value but are not cost effective. A system that would encourage providers to economize would generate more savings. On the other hand if the incentive to economize were too strong, quality of care would suffer.
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.
I'll throw something out there (relax, it's only a spitball):
- The government gives people money to buy healthcare/insurance. Say something like, five-thousand dollars a year. They can, initially, spend it only on medical visits/tests/medicine or health-insurance itself.
-The money accumulates. If you don't use all of it every year, it stays in your account into perpetuity.
- After a series of years, say, five years, the person can take out some of the money from that year to spend on whatever they like. So, five years from now, you can take out 1/3rd of your five thousand dollars given to you that year for your own purposes. This is the "incentive to stay healthy" clause.
- The insurance companies now have to fight for business, knowing that everybody has money to spend on health insurance. This is the capitalism competition part of the system.
- The government negotiates prices and chronic and pre-existing condition clauses. The money they provide can only patronize medical services/drugs/insurance companies that agree to the negotiated prices and providing complete care for long-term needs. This is the "keep prices low but the option is there to pay/charge higher if one pays with their own money" part of the system.
- By design, older people will have more money in their account, since they have been accumulating it for life. Younger people will (should!?!?) be incentivized to stay healthy earlier and for longer so they don't use up their allocation early and will have the money available as they get older, but still have some to use for their own greedy purposes (see personal allocation above).
- Once you pass away, the money goes back to the government. It cannot be deeded to anyone else.
It's somewhat public healthcare?! But used to prop up the private industry? And not too far from how current Social Security/Medicare works except people see the money in their account so it's much more tangible? Most importantly, it decouples healthcare from employment. I'm just throwing out ideas.
Your point about about prices rising faster than utilization is very important, and I think ultimately incorrect. The question of where does our high healthcare spending come from, prices vs quantity, is THE question facing any healthcare reform. The less our spending is due to higher prices than peer countries, the less juice there is for any reform scheme.
You cited the Niskanen essay, which got that graph from a Health Care Cost Institute report. But it's not clear to me that the HCC paper really disaggregated intensity from utilization. Utilization x intensity of care is quantity, not utilization alone.
I've been influenced by the Random Critical Analysis critique of US healthcare, to be upfront. This is a very hard problem to conclusively analyze, but quantity and not prices appears to still be the main driver US healthcare spending.
Matt- First, thanks to the link to Lawson Mansell’sexcellent article , of which I had been unaware. Encourage others to read it.
I’m am glad that you were willing to enter this thicket. But did not see any meaningful clarification of your goals AMD how you measure whether any proposed changes would improve the system in your opinion. But I a truly encouraged that your hope for improvements were not based on a perceived need to spend more money.
I would only offer a few observations based on my 82 years of utilizing the system for my self and my family, of being an investor in various aspects of the system , and from my perspective of someone who was an actuary early in my career( and still maintains membership in the Actuarial Society and opined to my insurance employer at the time( about 60 years ago ) that the concept of HMO’s had the fatal flaw of incentives being misaligned between the sellers ( insurance companies) , buyers ( large organizations ) and consumers ( the individuals utilizing the service).
Over the decades the many problems of these misaligned incentives have only been distorted further by government regulations with unintended consequences.
Unless and until these misaligned incentives are recognized and addressed in any proposed solutions, the problems will continue to proliferate and the desired outcomes be in conflict with each other and the proposed goals of the systemic change.
So let’s quit the partisan bickering, the political grandstanding, and the doomsaying by those benefiting from the distorted incentives in the current system ( perhaps starting with but certainly not limited to the drug companies andPBM’s) accompanying every effort at reform.
Every proposed attempt at reform of which I am aware does a horrible job of both aligning incentives and setting priorities. .
Case on point, seldom will any proposal begin by saying consumers should be responsible for the purchase of what is arguably the most important product ( or perhaps coequal with their residence) that anyone will ever purchase. So the lites ( employers, government bureaucrats, etc) are in charge of monitoring and controlling those decisions. What would happen if the government and your employer were to decide that they should tell you which car or stove to buy ( although the Biden administration was attempting this) or grocery store to shop at or where to vacation or airline to use. Those decisions would be as totally screwed up as is the paternalistic healthcare system we have today.
Repeat - aligned incentives at the individual level are the most important ( but far from only) thing that need to be implemented for any reform effort to work. Start by at least unburdening healthcare users from being subject to the lie that Obama told and the government enforced by making it reality again after all these years of enforcing a system that did not let the majority of people keep either their insurers or their doctors if they liked ( were satisfied) them.
Matt- First, thanks to the link to Lawson Mandel’s excellent article , of which I had been unaware. Encourage others to read it.
I’m am glad that you were willing to enter this thicket. But did not see any meaningful clarification of your goals AMD how you measure whether any proposed changes would improve the system in your opinion. But I a truly encouraged that your hope for improvements were not based on a perceived need to spend more money.
I would only offer a few observations based on my 82 years of utilizing the system for my self and my family, of being an investor in various aspects of the system , and from my perspective of someone who was an actuary early in my career( and still maintains membership in the Actuarial Society and opined to my insurance employer at the time( about 60 years ago ) that the concept of HMO’s had the fatal flaw of incentives being misaligned between the sellers ( insurance companies) , buyers ( large organizations ) and consumers ( the individuals utilizing the service).
Over the decades the many problems of these misaligned incentives have only been distorted further by government regulations with unintended consequences.
Unless and until these misaligned incentives are recognized and addressed in any proposed solutions, the problems will continue to proliferate and the desired outcomes be in conflict with each other and the proposed goals of the systemic change.
So let’s quit the partisan bickering, the political grandstanding, and the doomsaying by those benefiting from the distorted incentives in the current system ( perhaps starting with but certainly not limited to the drug companies andPBM’s) accompanying every effort at reform.
Every proposed attempt at reform of which I am aware does a horrible job of both aligning incentives and setting priorities. .
Case on point, seldom will any proposal begin by saying consumers should be responsible for the purchase of what is arguably the most important product ( or perhaps coequal with their residence) that anyone will ever purchase. So the lites ( employers, government bureaucrats, etc) are in charge of monitoring and controlling those decisions. What would happen if the government and your employer were to decide that they should tell you which car or stove to buy ( although the Biden administration was attempting this) or grocery store to shop at or where to vacation or airline to use. Those decisions would be as totally screwed up as is the paternalistic healthcare system we have today.
Repeat - aligned incentives at the individual level are the most important ( but far from only) thing that need to be implemented for any reform effort to work. Start by at least unburdening healthcare users from being subject to the lie that Obama told and the government enforced by making it reality again after all these years of enforcing a system that did not let the majority of people keep either their insurers or their doctors if they liked ( were satisfied) them.
I'm curious about what percentage of healthcare spending is for expensive end-of-life care with extremely low efficacy rates. I also don't know what Medicare pays for along these lines.
I am fine if people want to pay for care that only serves to keep them alive in name only, but it seems to be a clear area where not providing that care as the default could represent outrageous cost savings.
But anything that leans into the "death panels" territory has been a nonstarter politically.
Certificate of Need laws, which limit supply of healthcare, are actually an important tool for managing total healthcare spending. As the piece notes, perhaps half of all health spending is basically useless (or harmful)! If you build a new hospital or nursing home, it will get used. This is a situation where supply generates demand. Especially since patients and doctors (who directly generate demand) have basically no incentive to keep utilization low.
I think a nice interim step would be Medicaid Buy-In for Small Businesses. That feels very doable, and would attract support from restaurants and two-man-and-a-truck plumbing outfits. I think a lot of states could do it on their own.
Problem is lefties will move on to the next topic in a week or two. At least healthcare is more high minded than the rights of day traders or a fake panic about rail safety.
Exactly. We have price-controlled health care for seniors via Medicare and price-controlled health care for the poor and for kids via Medicaid. Charting the next steps to expand coverage from both ends of this spectrum makes sense.
BUT, as we do so, we shift costs to the middle-class and to working age adults for the private health insurance they rely on. Caught between the pricing power of hospitals and drug companies and their own bottom lines (Noah Smith's point), private health insurance companies respond with higher premiums, deductibles and copays and, as illustrated by the practices of United Health Care, by limiting access to care.
The ACA hasn't been able to keep up with the cost shift problem and appears to be impotent in regard to access to care (as opposed to its success in access to coverage for those with pre-existing conditions). Paying for health insurance is one thing, which people resent when costs rise, but they resent even more, personally and viscerally, when they can't get the care they're paying for.
The gatekeeping function of controlling access to care is a problem for both public and private plans, but it's most acute in the private health care industry. Access to coverage in that market is where the next phase of politics and policy-making on health care reform at this moment would appear to be taking us.
Finally, this "moment" is also likely to make repeal or retrenchment of the ACA at lot more dicey for Trump and the Rs in the Congress. If they are smart, they'll focus their threats (and promises?) to tackle the ACA by focusing on access to care (although, if they do so, they are likely to do so more performatively than substantively).
Key question: What are the policy reforms that can most effectively address the problem of access to care in the private market?
Reposting a nested comment since it's my most coherent thoughts on a free market option.
Technology and legislation has advanced enough that even with the US's healthcare ecosystem you can find prices if you are committed. I used to build contracts that hospitals negotiate with insurers into hospital's electronic medical record systems. Any decent sized hospital can 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 healthcare 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 - antivenom and give her back for $800; antivenom plus IV and observation for $2000, or antivenom 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 today they don't. In my mind part of it is institutional inertia, part 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 technically possible even 15 years ago. My question for foreign readers - does this happen in other countries? Does your doctor say "I'd love to get an x-ray done but it's going to cost you (personally) $200?"
The greatest trick the healthcare industry ever pulled was convincing politicians that they could control costs by limiting supply.
Should we talk about how Americans' unhealthy lifestyle - crappy food, sedentary lifestyle, high stress levels, not enough sleep - affects healthcare costs?
I know the school of thought that says, "But all these things are actually GOOD for healthcare costs! Better to have someone die of complications of diabetes in their 50s than live into their 90s and require increasingly expensive care along the way!"
First of all that's horrible, and second of all, is that necessarily true, or can we work toward a world in which it's not true? Meaning, can we focus on extending healthspans, not just lifespans? I've been reading that "Blue Zones" book, and I have no idea how scalable that is, but the point is, it's possible to grow old without horrible debilitating ailments. Should we focus more on prevention? Like, Alzheimer's Disease is horrible and incurable, but I've also heard it referred to as "type 3 diabetes" by some because high sugar consumption is a risk factor.
I don't know. I realize that telling Americans to eat healthy and move more is going to be about as popular as a carbon tax. I don't know if there's any way to gently nudge people in the direction of healthier choices. (Ozempic to the rescue?) What do you all think?
It doesn't invalidate your broader point, but I'd note that the Blue Zone phenomenon specifically is maybe not real:
https://www.ucl.ac.uk/ioe/news/2024/sep/ucl-demographers-work-debunking-blue-zone-regions-exceptional-lifespans-wins-ig-nobel-prize
"Dr Newman showed that the highest rates of achieving extreme old age are predicted by high poverty, the lack of birth certificates, and fewer 90-year-olds."
It's a very dismal area of thought. I had a conversation with someone during the start of COVID around how it would impact US healthcare expenditures; in the short term, sure a lot more people were in hospitals. But long-term a disease that kills the least-healthy members of your population is going to bring down the sticker price for care long-term.
Ozempic to the rescue would be my guess.
"Everyone is eating themselves to death" does seem like a big part of the healthcare issue.
Does the out of pocket expenditure data here include premiums?
Whenever there’s a discussion on healthcare policy, we have to remember that Democrats could pass whatever reforms they want in several deep blue states, but have so far not created universal coverage in any state they govern.
The ACA was modeled off a plan signed by a Republican governor of Massachusetts (which while having a low rate of uninsured people still has 1 in 40 people being uninsured).
States can really be a laboratory for democracy on this subject. But Democrats in deep blue have largely chosen incremental tweaks rather than fundamental changes in the healthcare system.
The only major group here in CA that couldn't get coverage if they wanted it are undocumented immigrants*, and even then we offer insurance to the DACA group.
CA took a crack at Medicare for All (ended up being too expensive), but large scale healthcare changes really need to be federalized otherwise you get the state equivalent of an insurer death spiral.
*https://www.chcf.org/blog/how-california-made-almost-everyone-eligible-health-care-coverage
7% of Californians don't have health insurance.
A system can be universal without being "Medicare for All."
Universal means everyone is covered. It doesn't mean 7% are uncovered. Yes it's possible to have a system based on private insurance getting to universal coverage. Ask the Netherlands, Germany or Switzerland.
It's available to 4/5ths of them they just haven't signed up. What happens if you don't sign up for insurance in one of those countries? Supreme Court here struck down penalties for being enrolled.
“ but have so far not created universal coverage in any state they govern.”
All blue states have universal coverage. If you’re poor you get Medicaid. If you’re not poor enough for Medicaid you get subsidized ACA and those that can afford it pay into whatever level of plan they want. Just like how it works in Germany or the Netherlands or Switzerland.
In the Netherlands, if you don't sign up for health insurance, you get multiple calls warning that you need to do it. If you still don't do it, you have to pay a fine and then you are given another warning, and if you still haven't gotten insurance, one will be arranged for you (with another fine).
That's a far cry from the American "mandate", which was originally a slight tax (much less than health insurance premiums) if you didn't register for health insurance that was later set to $0 in 2019.
Universal coverage means everyone is covered.
In the OECD, 28/39 countries have >99% coverage, with most of these being >99.9%. That's what I mean by universal.
There is no blue state (or state in general) with an insurance rate of over 97.5% (Massachusetts) which would put it at 30/39 for the OECD.
California has an insurance rate of 93%. New York, 94.8%. Washington State 93.6%. Illinois, 93%. Hawaii, 96.1%. None of them are universal. These are on par with Estonia, Chile, and Slovakia.
Germany has an insurance rate of 99.9%. Netherlands, 99.9%. Switzerland, 100%. So obviously it's not "just like how it works in Germany or the Netherlands or Switzerland."
It sounds like none of those countries have universal healthcare, because wouldn't "universal" mean 100% enrollment?
I kid, I kid, but to me it's not a moral failing if insurance is available and people don't opt into buying it. Health insurance is a bad deal if you're a young, healthy person - the mandate was a giveaway to insurance companies so that healthy people that usually don't need insurance would sign up.
The more supply is increased, the more unnecessary care will be delivered. Certificates of Need, in principle, are good. So is having competition for scarce slots in medical school. There is indeed a lot of gaming by health care professionals and probably more of it in a city well supplied with health care facilities, like D.C., than in the rural South. Frankly, consolidation of health care into large conglomerates of providers is the best solution to this. The problem with UHC (if there is a problem) and also with Medicare is that they can only decide to pay or not to pay. The providers have no incentive to economize. It is true, that Medicare and other insurance companies have erected a thicket of qualifications to screen out obvious fraud, but that is no substitute for a system that rewards a bit of parsimony but not too much. The art will be to strike the perfect balance.
>The problem with UHC (if there is a problem) and also with Medicare is that they can only decide to pay or not to pay. The providers have no incentive to economize
Is this true? Not sure about this take. I thought insurers have a maximum amount they'll pay for certain procedures? So they are economizing
Oh, absolutely they DO pay a reduced fee to providers! in the case of Medicare and Medicare, it is quite reduced. The point that I was trying to make is that providers may try to pad the bill by ordering tests or doing procedures that may be of some value but are not cost effective. A system that would encourage providers to economize would generate more savings. On the other hand if the incentive to economize were too strong, quality of care would suffer.
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.
I'll throw something out there (relax, it's only a spitball):
- The government gives people money to buy healthcare/insurance. Say something like, five-thousand dollars a year. They can, initially, spend it only on medical visits/tests/medicine or health-insurance itself.
-The money accumulates. If you don't use all of it every year, it stays in your account into perpetuity.
- After a series of years, say, five years, the person can take out some of the money from that year to spend on whatever they like. So, five years from now, you can take out 1/3rd of your five thousand dollars given to you that year for your own purposes. This is the "incentive to stay healthy" clause.
- The insurance companies now have to fight for business, knowing that everybody has money to spend on health insurance. This is the capitalism competition part of the system.
- The government negotiates prices and chronic and pre-existing condition clauses. The money they provide can only patronize medical services/drugs/insurance companies that agree to the negotiated prices and providing complete care for long-term needs. This is the "keep prices low but the option is there to pay/charge higher if one pays with their own money" part of the system.
- By design, older people will have more money in their account, since they have been accumulating it for life. Younger people will (should!?!?) be incentivized to stay healthy earlier and for longer so they don't use up their allocation early and will have the money available as they get older, but still have some to use for their own greedy purposes (see personal allocation above).
- Once you pass away, the money goes back to the government. It cannot be deeded to anyone else.
It's somewhat public healthcare?! But used to prop up the private industry? And not too far from how current Social Security/Medicare works except people see the money in their account so it's much more tangible? Most importantly, it decouples healthcare from employment. I'm just throwing out ideas.
Yeh, the incentive will have zero impact.