Big ups to Marc the intern. I'd bet it's intimidating to write the first article for a website NOT written by it's founder and one of the best-known policy writers in the United States, about an issue as complicated and aggressive as universal healthcare. Good work, the article turned out great. It matches the style and tone of Slow Boring and has depth to it.
I'm a primary care doctor in Southern California in a small private practice. We accept most insurance plans (except straight Medical b/c it simply does not pay enough per visit to break even). We have a mix of straight Medicare/PPO and HMO. My husband works for Kaiser so I've been able to compare various systems and here are my thoughts and observations:
1) I am definitely in favor of a single payor system. Not only do I think it is ethically necessary for a society to care for its citizens, but I agree with Craig, who reflected that "everyone's health affects the people around them." Simply put, I think access to a decent, basic level of health care should be a right (like access to education), not a privilege.
2) There definitely needs to be a "tiered" system. Those who are rich or who can afford, should be able to purchase better access, fancier procedures, "concierge medicine," what have you. I know some people are fixed on fairness and equity, but in my opinion, efforts to enforce "equity" cause untold damage. Utopian visions are frightening.
3)Deciding what is covered will be difficult. There may be wait times for procedures. There will be articles in the papers about how someone had to wait 6 months for their knee surgery, while the rich guy in the next town got his in a week. But you know what? Covering basic primary care , vaccines, generic blood pressure/diabetic medications, etc, is HUGE (as I think the article points out). And I would like to see a cost analysis (if possible) about possible cost-savings if these issues are controlled and people don't end up at the emergency room when their illnesses are out of control .
4) One well-run system would hopefully cut down on costs. I am appalled by the amount of waste that I see simply in my practice. For example- if I have a patient with HMO, money goes to his provider (for ex: Blue Cross), then a portion goes to the IPA, and finally to pay for his care. Think about all of that administrative nonsense - the people at Blue Cross , then the reviewers at the IPA level, etc. And the duplication of tests is outrageous, partly because we don't all have access to one set of records, so the endocrinologist orders the same blood tests that the primary care doctor just did. Whatever else about Kaiser (and it has its flaws), it is generally an efficient, evidence-based, well-oiled machine. To my mind, it's a good model for how socialized medicine could be.
5) Last issue . This is the tough one and I don't have a solution. End of life care. It's very, very expensive. Are there rules that would be put in place if we/the taxpayer are paying for everyone's care? Are there age limits to dialysis? To intubation? What about the person who is brain dead? This is tough, a slippery slope. And what the Republicans use to scare the public: remember the death panels?
Thanks! It’s always good for these discussions to hear from the people actually doing the work, and who actually have to deal with the pain points in the current system.
I agree with most of your points, but why does that lead you to single payer specifically? There are a lot of different realistically achievable ways to get to universal coverage, and it seems like any form of universal coverage would deal with the issues you raise.
We don’t have a full BidenCare plan yet, but it does seem like it would be broadly compatible with what you are talking about.
I guess I see inefficiency and waste in the current patchwork insurance plans we have now. So, again there are multiple levels of bureaucracy with all of the individual plans (Anthem vs Aetna...) As a doctor it's frustrating as well bc all of these different plans cover different medications and procedures. So for example, there's no easy way for me to know which medication is preferred until I get a notice from the pharmacy that something wasn't covered and I have to try switching it. My fantasy would be a single plan where I know what's covered and what is not. Again: the Kaiser model.
But universal coverage of any sort would be great. My brother (a doctor as well, who describes himself as right of center) thinks Medicare for All is a terrible idea and would actually promote run-away medical costs. He prefers market-based competing plans. I disagree, but maybe he has a point.
My opinion is that we will get there. Biden care/ Buttegieg's plan and Obamacare all the baby steps we need to eventually get to single payor. Marc suggested that in the article as well. The country is not ready to move to single payor yet. (I personally think the term "Medicare for All" is not good marketing bc Republicans label it "socialist" and seniors think they will lose something if MC gets expanded to everyone. But ... marketing, not my specialty).
I think that makes a lot of sense. Those seem like big problems that we should be tackling, and it is a total mess.
The patchwork also generates some perverse incentives, in that it seems to be getting harder to get insurance companies to pay for preventative care. They have figured out that people change their insurance enough that someone else will have to foot the bill when the patient gets seriously ill.
I worked as a software consultant, and was dropped into a number of health insurance companies. The weirdest part was how desperately focused they were on making things as simple as possible for the providers. In their view they were providing a simple front end for your guys, and protecting your from the really insane patchwork of details THEY had to deal with. They negotiate with labs, pharma companies, tons of regulators, policy and procedure, auditing, fraud detection, external auditing, and that’s even more of a patchwork.
I think the main thing we need to do now is start building a public option. Do it big, do it right, and focus on transparency, reporting, and consistency. Build it as an open framework that can coordinate with everyone make things simple.
If we start now, we should be in a great place by Kamala’s second term.
It's not that weird. Providers are organized enough that CMS uses CPT codes--which the American Medical Association (which represents dues-paying doctors) develops rather than its own HCPCS codes.
I think the concern that if costs are entirely born by a single government payer, there won't be a lot pushing them down is fair. (When the government takes action to put downward pressure on costs, someone affected will complain that the specific rationing decision is bad - it strikes me as a special-interest dynamic.)
But I think you've also hit on a huge problem with the current system: no one is putting downward pressure on costs now because neither doctors nor patients have great visibility into the system.
There is actually a lot of downward pressure on costs. I huge amount of cost controls were added as part of the ACA, and (possibly as a result of that) health care inflation has actually been low for the past decade.
The downside of that is added complexity. There are now whole compliance layers keeping down costs, but adding to the complexity.
I'm sure Elana will agree that that is just making her job harder ;)
Number three --deciding what gets covered is one of the questions that I think is going to be tough. It's going to be subject to politics and even if we turn it over to an ostensibly independent scientific panel, politics is still going to play a role -- one of the best examples is the fight over recommendations for screening mammography for women in their 40's.
A lot of the controversy is going to be around women's reproductive health and I do not want a situation where in case of an ectopic pregnancy, removing the entire fallopian tube is covered, but methotrexate is not. Not covering spinal fusions unless they meet criteria would probably save money both money and lives. Still, I expect that there will be strong political pressure to cover them for conditions that the science says they're ineffective for.
There will be political pressure and anger. But we’re actually not starting from scratch. Look at MC, a govt program that is actually affordable, and fairly good coverage. And coverage is pretty evidence-based. I still hear people angry bc it doesn’t cover what they want it to cover. Ex: doesn’t cover PSA (prostate blood test) for screening unless there is a reason, such as family history. But that’s based on evidence.
Universal care needs to be good enough, not perfect. There will ALWAYS be a class-based difference in care. Period. But w universal coverage at least people will have access to top preventative care. And no one will go bankrupt bc they got into a car accident or they were diagnosed w cancer.
I'd just like to point out one thing that is *not* wrong with the present-day state of affairs, and which needs to be left unchanged at all costs by any reform: The richest country in the world (USA) is footing the bill for a whole lot of medical research (both new pharmaceuticals and new procedure development) which would not be happening without that money.
Something like a good new Alzheimer's, diabetes or Parkinson's drug would alleviate way more death and suffering worldwide over the long run than more equal care in the US would. Reducing pharma profits (as would surely result from Medicare For All's passage) could easily delay the development of such drugs by 5 or 10 years. That's a pretty price to pay for health care equity in terms of the global body count over those years.
I'm definitely not saying don't provide universal coverage. I'm saying either do it in a privately-provided way that doesn't wreck the incentive structure we have in place now, *or* introduce a new publicly-funded incentive structure for medical research, prove that it works, *then* switch to single-payer.
Glad someone raised this issue because it always seems to get glossed over in healthcare reform discussions. As far as I've seen, none of these reforms have addressed the issue of pharma innovation. It's either "pharma is bad so let's shorten patent terms" or "let's have some hazily defined prize in exchange for giving up patent rights" without delving into the specifics of how that would actually work.
This is not to defend the American healthcare system, which is pretty suboptimal! But someone, somewhere needs to pay for innovation, or we don't get any.
I would like to point out that not every other country on Earth but the US is poor. I have lived both in the US and the EU, and I have seen wildly different prices for drugs that are available in both, so I'm pretty sure that rich states like France or Germany are indirectly benefiting from how high American drug prices are.
Absolutely, and I think the other rich nations have a moral responsibility to contribute more. But we (Americans) can't control them, we can only control ourselves.
Or uh, at least we used to be able to control ourselves?
Greece has the following policy. For a drug to be covered by insurance, its price must be no higher than the average of the three lowest prices of the same drug in other EU member states. (The best source I found in English is this: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5005395/)
I don’t believe it would be weird for the US to adopt a similar rule (maybe substituting OECD for EU, and taking the average of the highest prices or something). My guess would be that this would lead to companies raising their drug prices in other rich countries, which would lead to better balancing of the R&D costs.
Well, isn't that a type of price control for the US too? Assuming that the price of a drug in France is x, and a US rule says that this drug would be covered through insurance in the US if its price is up to 2x. The manufacturer would have to choose between lowering the US price, increasing the French price, or saying that they don't care, thus potentially losing insurance coverage either in France or the US. I assume that if a drug stops being covered through insurance, its market share will probably fall, so there is the trade-off facing the manufacturer.
My point is that raising the French price might not be an option, since the French price control law could make that illegal depending on the details. So the result is lower revenue rather than more equal prices.
America spends so much more than other countries on healthcare, compared to Canada it's about double per capita. So while some may go to administrative costs and poor health of Americans (some of which is deadweight loss due to lack of universal care), there's no way that's 50% of spending. I think a lot more than people think is the US footing the bill for expensive treatments to the benefit of the rest of the world.
There are a lot of different takes on it, and plenty are certainly critical of the position I'm taking here, but from what I've seen those criticisms tend to rest on misunderstandings about econ (like: "pharma companies make way more than they spend on research"... True, but the point isn't to set things up so they end up with exactly enough money to fund their research, the point is to incentivize their research spending at the margin, that is, to make research more profitable so that they'll engage in more of it).
"Something like a good new Alzheimer's, diabetes or Parkinson's drug would alleviate way more death and suffering worldwide over the long run than more equal care in the US would."
Sorry, I'm going to need a citation for that. The first great Alzheimer's drug that preserves cognitive performance for an extra year is most assuredly not going to "alleviate way more death and suffering worldwide" than a better treatment for malaria would.
I agree about malaria, the comparison I was making was whether equity in insurance coverage within the US (which is what MFA would achieve) would alleviate more death and suffering than a good Alzheimer's drug. I think the answer is likely no, the drug would be more beneficial over the longterm.
Ok! Most people's taxes will go up to pay for this, but it may be true that it costs less money for them than the healthcare they were previously spending the money on
Have you looked into union hostility to Medicare-For-All? A lot of unions bargained for gold-plated healthcare plans in lieu of higher wages, so eliminating private insurance & raising taxes on corporations has a net effect of significantly shrinking the compensation premium for union members.
Yeah… It was one of the things that made Warren’s plan so toxic.
Companies with good unions would not have to pay for worker’s health care, but pay that money in taxes instead. The union workers would have their coverage replaced by public plans with less tailored benefits. The workers would also need to pay taxes to get coverage. The companies don’t gain anything, and the union workers are worse of.
Meanwhile companies like Uber, who currently don’t pay their drivers health care (or even consider them employees), wouldn’t need to pay additional taxes under the new plan. The drivers would need to pay more taxes, and get public healthcare in return.
The main winner is the companies like Uber, who now don’t have to pay taxes that all their competitors do.
True. Which is probably one of the reasons we should transition to a universal private healthcare. Already less than half of Americans buy their healthcare through their employer and that percentage has been decreasing over time as more and more of us transition to contract work and employers increasingly get out of the business of health insurance. If you make the health insurance product equivalent to what you would buy from your employer in terms of quality (ie, financial protection) and cost, that transition will not be as painful.
I think this may be too big a nut for private healthcare to handle, even if we were ok with the negative externalities. Witness the recent failure of Haven.
I think the only real way forward is to first concentrate on building a solid, federal, public option. We need something that can talk to providers, insurance companies, and customers across the country with a consistent set of APIs. This needs to be done company by company, provider by provider, and doctor by doctor. This is a massive job, but eventually we can get to the point where we have a common data interchange and reporting in the entire system.
We need to build this with the current stakeholders, and make them part of the system. Until we build this we have no real way of determining where the fraud is, and where money could be spent more effectively. This will also allow us to reduce complexity in the entire system, removing headaches for doctors and making insurance cheaper. This gives us standardized levels of care, some cheaper and some more comprehensive. You should be able to change employers and employment status without losing your doctors, and keep the same level of care when moving states.
We also need to drive the uninsured rate as close to zero as possible. This is necessary morally, but also practically… the system becomes a lot easier to manage if everyone has an entity responsible for paying for care. This means implementing Medicaid expansion the remaining Republican states, and finally fixing the donut holes and funding cut-offs in the ACA.
Basically, this is Joe Biden’s health care plan.
Once we get to this, there are a bunch of ways forward. We could choose to go towards single payer at this point. My favorite option would be just to send everyone with a defined level of coverage a monthly check to help cover health care expenses and premiums. Everyone gets the same amount, and you get to pocket anything leftover at the end of the year.
Public option is private insurance. So is Medicaid and Medicare. The FI is private, the docs are private, the hospitals are a mix of public and private (with public hospitals often charging more and don't get me started), insurers are private, the cars (Uber/Lyft) that get you to your appointment are private, contractors that work on IT are private. What's public? The ultimate payer and the negotiator. We are almost at universal public system. We "just" have to upgrade our IT and make a couple other changes (eg, licensure and letting anyone who is qualified become a doctor if they want to and med school is free). Stuff like that.
The interesting question here is how much of the cost should fall on new taxes vs on the relative stinginess/means testing of the public insurance offered. I agree that it would save money in the aggregate but there are real limits on how far you can rely on the latter before you need to consider some sort of national VAT/GST of the sort found in Europe (Imagine the political nightmare of pushing that through). This seems to militate in favor of an Australia-esque system where there is a very basic public health insurance plan with private supplementation necessary and encouraged. Great work on the first post! -A fellow undergrad
Not to me it isn't. If you look at box 12 of your W-2, you will see a figure with DD next to it. That's how much your employer (assuming you buy your insurance from your employer) took out of your overall compensation to pay for your insurance. Now, you don't pay taxes on that part of your compensation (which is why it's not a salary and I deleted my post because I accidentally called it that) but so long as the taxes are equivalent to or less than the compensation minus the taxes I would have paid on that part of my compensation, how I pay for my insurance doesn't interest me all that much.
That is MASSIVELY dependent on the approach taken. I believe that is true for the ACA 2.0 approach, but it is completely false when dealing with M4A variants.
The majority of health insurance is Employee Sponsored Health Insurance. Your company pays a big part of your insurance premiums for you, in pre-tax money.
If we move to single payer, then your tax dollars pay for your health insurance (with progressive cost sharing so the rich pay and everyone else pays a bit less). Your company no longer has to pay your premiums, and POCKETS THE CASH.
If we left it that that, it means single payer costs about $30 trillion over ten years, which isn’t possible. We now have to figure out how to tax companies trillions to get back the money they managed to pocket.
No one has a slightest idea how to do that fairly and progressively. The net result is trillions of dollars diverted from health care into corporate profits.
We tend to massively overestimate how much health care spending goes to company profits. Even wonks seem to misinterpret what “medical loss ratio” numbers actually mean. Eliminating all insurance and pharma company profits would barely make a dent.
How does this work? It seems that the company that used to pay your premiums now has to pay your higher tax rate. The leftover winnings get split between the worker and the employer, unless the government makes it a slightly higher tax than needed and takes some of them too.
Take the example of a median income single person on an average ESHI plan. The employee pays about $1.5k a year, the employer pays about $6k per year, and government subsidies make up the rest. Replace that with a single payer plan funded by $7.5k of additional taxation on someone.
You need to get the company to pay at least $6k in additional taxes in order for the worker not to get shafted. If you don’t, then you are subsiding a tax increase on the worker to pay for cuts in corporate expenditures. Very regressive.
You could simply decide that, since the company used to pay $6k in benefits, and it no longer needs to do so, then you can just replace that with a $6k tax on the company.
That would work, if all companies paid ESHI. But half of all Americans don’t get health care through work, so there are lots of companies that don’t pay for employee healthcare. Should those companies pay tax, or not?
If they don’t pay, then you are penalizing companies for providing health care… You are taxing union companies to pay for tax cuts for Uber. Very regressive.
If they pay their fair share, then you are penalizing companies that employ primarily working-class people rather than those that employ higher income earners (who typically have ESHI). You are also really helping higher income self-employed people, who typically earn more since they are funding their own benefits. Very regressive.
"In 2019, the federal government and households accounted for the largest shares of spending (29 percent and 28 percent, respectively) followed by private businesses (19 percent), state and local
governments (16 percent), and other private revenues (7 percent)."
By my computation, nearly 52% of current health spending will need to be onboarded to the Federal government if businesses will be taxed for their contribution. It may be less if there is some role for continuing state and local funding.
With health spending at $3.8 trillion dollars, that's $2 trillion that needs to be shifted onto Federal balance sheets.
I haven’t crunched the numbers for a few years, but that seems broadly accurate. The top line numbers from CMMS are a little misleading, though.
There is a bit of a fuzzy boundary between federal, state, and local spending, but the numbers seem about right. A big chunk of the federal spending is actually just tax revenue that is not collected from corporations in order to subsidize employers to contribute to employer health care plans. A big chunk of the state and local revenues are taxes on companies in exchange for providing health care.
Let’s assume that all the people who get health care other than through an employer can be converted to single payer. This would include Medicare, Medicaid, VA, SCHIP, SSDI, and the thousands of other federal, state, and local programs. Let’s also include people on ACA plans and the uninsured.
Let’s assume that this can be done as efficiently through single payer as through the patch work. I think that is wildly optimistic, but let’s keep it simple.
This leaves half the population with ESHI. For an average single coverage plan, the employer pays about $6k per year and the employee pays about $1.5k. That works out to one trillion paid per year by employers, and 250 billion by the employee. Family plans really complicate the math, but those work as rough numbers for a lower bound.
But let’s look at a median income individual single worker. Right now they pay $1.5k a year for health care. Under single payer they would pay $7.5k in taxes, and get health care for free. The real winner would be their employer, who pockets the extra $6k.
Obviously, you want to figure out how to tax the money that you are giving the corporations so you don’t have to tax the worker that much. You are giving a trillion dollar per year tax cut to employers, then trying to figure out how to raise a trillion dollars in corporate taxes.
We simply don’t know how to do that without massive regressive consequences.
Some people try to fudge the numbers by assuming a 20% total savings on ESHI by conflating MLR and profits. Even if, like Elizabeth Warren, you count the same imaginary savings multiple times, you still don’t have enough money to fill the gap.
You would also have massive dislocation. Insurers are keepers of your electronic health records. Private insurers don't have systems programmed in COBOL. Public insurers do. I would be interested to know how you plan to marry those IT systems so that (eg, people with diabetes) can continue getting their meds.
Is that a guess, or have you actually encountered an insurer still using COBOL? Would not actually surprise me.
I’ve worked with public and private health care, and there is not a huge amount of difference in the tech stack in each. Of course, there are bunches of private companies providing Medicare/Medicaid services, and lots of governments operating private insurance plans, so they aren’t all that different.
There is a TON of work being done on how to share medical records in a HIPPA compliant way. Some private insurance companies still exchange data by converting records to ancient EDI binary files designed for Medicaid, since they can’t agree on any other standards.
It's not a guess. I have not worked directly with the private sector but as part of the effort to pay for Kymriah (more on that here https://www.newyorker.com/magazine/2019/07/22/the-promise-and-price-of-cellular-therapies?irclickid=RyMyd11uDxyLTEQwUx0Mo36KUkEUIx2xxw%3A1Qo0&irgwc=1&source=affiliate_impactpmx_12f6tote_desktop_Bing%20Rebates%20by%20Microsoft&utm_source=impact-affiliate&utm_medium=2003851&utm_campaign=impact&utm_content=Logo&utm_brand=tny) we did have to figure out third party liability, which included private pay. (Kymriah is carved out of Medicaid managed care plans in virtually/all states (I think it's all but I have not done a comprehensive survey of all states that cover Kymriah) that cover it because it's that expensive.) Anyway, one of the issues on both sides is the incompatibility of the systems. There was one case of a lady who was at the time (this was when Kymriah was only approved for people under 18) who was running out of time both because the Leukemia was destroying her blood cells and because she was aging out of the benefit but the hospital asked her to drop one of her public insurance coverages because they said their IT system was not able to talk to the public IT system. Of course since she was Medi-Medi, they asked her to drop Medicare (which at least at that time paid less than Medicaid so one could be a bit skeptical) but there you have it.
Yeesh… My first coding job was writing Fortran 77 to read data from magnetic tape reels. Hand crafted data frames and a compiler so gormless that it would let you assign 3=7, so 3*3 would return 49.
I’ve a modem with a top speed of 3 bits per second, and sent data packets down a wire running the same protocol since 1914.
Yep. The one thing government is super, super reluctant to pay for is IT upgrades. Especially billing system IT upgrades. How are you going to justify them? Right now, Medicaid and Medicare systems both of which (let me remind you are ultimately run by CMS) can't "talk" to one another. The protocol for people who are covered by both is that a provider bills Medicare first and then, after Medicare pays him, sends copies of the paid bills along with the bill to the Medicaid system so that Medicaid can cover the rest. But here's the thing. The patient doesn't see any of that. Their benefits are not affected by it in the least. It's "just" a headache for the back office people. Now, you started to see some of the issues with never upgrading your IT with CAR-T which, I expect once it deals with solid tumors, is going to force the issue and then all of a sudden you will see a whole new IT system in the public space. But until then (and we're probably talking about a decade), no politician is going to try to justify more money for computers so that billing people can have an easier time of it.
Like most policies, the effect would vary by individual situations, but *on average* the idea is that taxes go up, premiums go down, wages for workers moving off their employer plans go up (amount depends on how much of the saved healthcare premiums employers pocket as higher profit). Hopefully that's a wash, though it's certainly not a guarantee. What's clearer is that job lock would be reduced, which is a pure efficiency gain, and that lower-income people would have overall better access to medical care - which I suppose you can argue about the economic merits of, but seems to me that's a positive thing.
Then you'll need to be honest as to what rigorous cost controls are going to do to medical providers who are set up for living in the current environment. And the administrative savings won't come close to saving anyone.
Are people going to be ok having 1 or 2 main hospitals for good sized cities?
It's exactly this kind of ignorant response that is going to doom reform efforts. Staff costs are <10% of medical expenditures. You can cut doctor salaries in half, it's not going to save medical centers.
There are wild inefficiencies in healthcare. My last company could accurately predict who was likely to have botched surgery and the only people we could get to pay for it were programs operating under Medicare funding models. The providers had a negative incentive since it meant less procedures performed!
That’s fine too. But what would be unquestionably worse would be health care professionals making less so that a bunch of leftists can engage in moral preening.
Because they’re cost controlling for things with likely marginal benefit. It would be interesting to see end of life care costs in the US vs other countries.
If you get rid of insurance altogether and then actually “bend the cost curve” through efficiencies and some decent market competition, I bet you could fund the federal catastrophic “welfare” program ensuring universal access with just the cost savings and not have to increase taxes at all. I still don’t understand why universal government insurance is a popular idea.
I doubt anyone will be convinced, but there is no real difference in efficiency between public and private health care entities. They are all entities in a heavily regulated marketplace. Every entity acts the way it does because of the regulatory constraints, not because of any “government” / “free enterprise” differences.
Privatization won’t magically reduce waste. Federal monopsony power won’t magically reduce costs.
How do we know? Because there are lots of private, for-profit companies managing Medicare and Medicaid. There are lots of state and federal actors that sell health insurance in the private market. They all co-exists because there are only marginal differences in efficiency.
I’ve worked at both. Offices at private companies are nicer, the cubicles have more tchotchkes, and the coffee machines are WAY better. Everyone is stressed. Everything else is pretty much the same.
The rules for private insurance are structured to optimize cost savings and efficiency, and to minimize fraud. There are vast layers of primary and secondary auditing to make sure that claim amounts are minimized. The downside is complexity and a lot of denied claims.
The rules for public insurance are structured to provide specific levels of coverage, and reducing harm. Administration costs are absurdly low, because everything is done on the cheap. Money is always a constraint, but the rules make detecting fraud and waste hard. It is genuinely hard to tell if an unexpected expense is fraud, or if it is critical funding that prevents the entire system from collapsing.
Is it though? What services do you think the government is so bad at providing? And in each case, why is it bad at providing them? I think if you take a fair look at it, you'll see that mostly it does a good job providing services, and the areas where it doesn't the reason is usually because somebody wants them to not do a good job.
The Interstate Highway system works pretty well, but it worked better before its funding stayed level through decades of massive growth for the country. People generally really like the postal service, but clearly satisfaction went down when the current administration intentionally sabotaged its services. Satisfaction with Medicare, Medicaid and the VA are all higher than private insurance, and measurable costs and outcomes are better too. Social Security is incredibly effective and well-liked and operates on ridiculously low administrative costs. The FAA, despite plenty of problems especially recently, still has a remarkable track record of increasing the safety and availability of air travel. The hodgepodge of welfare programs leaves tons of room for improvement, but it still makes a huge positive impact on poverty, child hunger, etc.; it did a lot better before people claiming government can't help forced massive cuts to prove themselves right.
It's easy, and incredibly lazy, to just say government can't do anything right. As Yglesias noted recently, Vienna is proof that publicly-owned housing can be great, just as surely as New York is proof that it can be terrible. Presumably it's possible for a private phone company to be great, though my own experience is that Verizon is pretty terrible. There's no magic here; whether it's private or public, to provide good services you have to want to do it and work toward that goal.
Administrative costs of Medicare and of the veterans administration are a fraction of what they are in private insurance (it helps, of course, to not have the attitude that it’s better to incur 99cts in admin and legal costs than to pay out 1$)
The attitude of private insurers seems to be to resist every claim.
And if you rather pay 99ct in admin and legal costs than pay out 1$ for a claim that with a probability 50% honest/50% fraud, you're still doing a terrible job.
(and don't forget that if you focus on fraud, you will also reject claims with small errors in it, just because it's very convenient to deny a claim)
"People generally really like the postal service, but clearly satisfaction went down when the current administration intentionally sabotaged its services."
You say it with that pure, nihilistic zeal, like nothing about public opinion can ever be known because there's no truth. Well...there's plenty of polling on the subject, have a look around. Here's a recent one that shows both the high support and the dissatisfaction with recent service: https://www.filesforprogress.org/memos/voters-demand-protecting-and-funding-usps.pdf
The US spends plenty on health care already. The issue is rather that a radical restructuring of health care is needed. But it is true that in contrast to moving the manufacturing base to China, the political elite is probably not inclined in this case to shrug and say ‘them’s the breaks’.
Progressives seem to operate in a framework where the soaring cost of healthcare in our current pseudo-market-based system is like gravity - a physical law that can only be overcome by pushing against it. But in reality do have control over that gravitational force, and I reject any proposal that doesn't deal directly with it. We have zero price transparency in the current system - the consumers of the service have no idea what the service costs and neither do the providers of the service! Healthcare providers have no incentive to bring value to the service. That's the first thing that has to change.
That was pretty much the approach they took when designing the original ACA. They included every single tool to control costs that they could think of.
I don’t think anyone really knows for sure why or how, but it seems to have worked. Health care costs stopped growing out of control starting in 2008, and isn’t as huge a problem these days.
The cost is a problem. “Soaring costs” – how much the cost is increasing, is not currently a problem.
The cost of healthcare per person is, indeed, really high…. Northwards of $10k per person per year. Part of that is due to the unique dysfunctions of the US health care system, and part of it is that the costs of services in the US are broadly more expensive than other places.
Costs were, indeed, rising sharply before the ACA passed. At the time there was real concern that the soaring costs were going to trigger a death spiral.
But since then insurance costs have largely not increased, and remained well under the inflation rate for at least from 2008 – 2018. I don’t have a solid idea about the last two years, though.
It's not a problem currently but I expect that costs will increase post-pandemic because there is a lot of pent up demand for elective procedures (which is how the healthcare system makes its money) and the CAR-T systems will come back roaring. We were expecting an average of 40 per annum beginning in 2020. That of course didn't happen but all that means is that the first year we can expect to see a new 60-80 CAR-T procedures/drugs. (They're procedures in Switzerland and cost 1/3 of the average price in the rest of the world but because of a 1990s policy issued by the FDA, not a law, not a regulation a policy CAR-T is considered a drug virtually everywhere).
Hi Rob - some quick google searches didn't show any substantive slow down in costs increases for health care spending. In fact the top line article was that they continue to grow significantly faster than inflation. Maybe I was just looking in the wrong places, but can you provide some info on where your getting that info?
The overall cost slowdown was a pretty well known phenomena post ACA. There was a whole bunch of head scratching in that the fall started before the was ACA actually implemented.
That said: I haven’t followed the numbers closely for the last two years, since I stopped working with health care companies. Finance is, somehow, less depressing. The sense that I get from Charles Gaba’s blog is that overall cost inflation is still under control, but there is some upward pressure from pharma prices.
It seems like drug development and manufacturing costs are continually exploding, as new biologics are significantly more complicated than simple small molecule drugs. Eventually that is going to cause some price jumps.
This type of comment is why politics in America doesn't work. People make criticisms that aren't even factually correct and offer nothing constructive.
1. The ACA had specific price transparency measures. Google it. You'll see
2. Progressives talked about cost reduction so much that during the 2020 primary Politico ran a story called "Would Medicare for All really save money?"
3. US healthcare is the most expensive in the world by far and produces some of the worst outcome of any rich country, which are also getting worse (life expectancy fell each of the last 4 years). It's chutzpah to dismiss change because you care about cost efficiency.
Have you ever attempted to shop around for insured medical services in the US? I have, and it's a frustrating task. Neither the insurers nor the providers could tell me ahead of time what my cost would be. We are not talking about percentage points here -- there can easily be a five-fold difference between apparently similar providers (both in-network, same, very common service). I've had both employer-sponsored insurance and directly purchased insurance from an ACA exchange. There is no difference in price opacity between them and I saw no observable improvement post-ACA implementation.
None of this is to say that better price transparency should be a gating mechanism to preclude universal coverage. On the contrary, with a single or at least dominant payer, it should be possible to greatly improve transparency around price, quality, cost and service quality. There wouldn't be the same argument about the need for confidentiality on contractual terms.
That’s one of the few concessions to reality that progressives make. The United States suffers from catastrophic cost disease. Fun fact: even if you exclude military spending, Canada spends slightly less per person at all levels of government combined and managed to include healthcare for that amount of money.
Progressives look longingly at the public services offered in Europe, but if Europeans got as little for their money as Americans they might not be willing to support those programs!
This post started out strong and then veered. You say we need to “deal directly with” prices but then say the answer is “transparency”? That is just doing the same “talk around the issue” you just complained about. Why don’t we deal with prices directly and just do price controls on these services?
That's a harder sell than just letting people see itemized prices on a list that's not a bill. Start with the easier lift - in *theory* free market evangelists should be 100% on board with more information & ability to compare prices/know them ahead of time.
However... as a recently-diagnosed Type 1 Diabetic, I've joined a myriad of diabetes facebook groups that are global in nature. What I've learned is that in single-payer insurance programs, there are distinct decisions that country-based benefit managers make around which innovations the citizens of said country are able to enjoy... and not.
In most all state-based health systems, people are "stuck" with a certain technology that has been approved by the state for 3 years at a time, at a time when diabetes management technology is accelerating on an annual basis thanks to technology. This happens in America too, under Medicare. My dad is also diabetic, and his choices are so much more limited than mine. It makes me miserable to think about what he's missing out on because his insurance is state-based.
If state-based systems are unable or unwilling (or can't afford to) keep up with medical innovations, then how can I support such a system, when I enjoy the latest and greatest technology support under my private insurance plan? And how do we incentivize entrepreneurs and companies to push the envelop on medical innovations if there's a limited market for it?
If we go with state-based basics PLUS private add-ons, I can get behind that. But I've switched from being pro-single-payer to anti-single-only-payer, now that I see things from the inside.
This got cut by the final version of the piece, but I'm fully on board with private add-ons. I just want everyone to have government health insurance, and then if people want to buy additional plans, sounds good to me.
The universal healthcare system that has arguably been most successful is the German model (aka the Bismarck model). Germany went to universal, private insurance back in the 19th century and that basic model works still and not just in Germany. It has been adopted by countries as different as France and Japan. The Beveridge Model (UK/Canada) does indeed cover everyone but suffers from the lack of innovation Jon described. The cool thing about the Bismarck model is that it promotes competition within a regulatory environment and at the same time gives people a chance to speak up about the kinds of drugs/innovations they want. In the Bismarck Model Consumer groups (and Germany had a hard time getting those off the ground--would not be a problem here lol) have a seat at the table together with docs and insurers when they decide how much an innovation should cost.
With the caveat that each EU member state has its own healthcare system (with a lot of shared ideas but also a lot of differences), my experience growing up in my member state was that people would frequently turn to private providers, even though everyone is mandated to pay the premiums for the public plan. The big advantage in my opinion is that you have more leverage when negotiating prices, if the private provider knows that there is a suboptimal but free option for you.
So, I do support the public system I used to live under before moving to the US, even though my family was using private providers more.
I’m Scandinavian so I’m surely biased by my access to universal comprehensive healthcare, free university, parental leave, subsidized pre-K, basic income for the under-18 and whatnot, but the single most baffling thing about the US is the insistence that marginal consumption for the well-off is a more worthwhile policy goal than universal healthcare. Frankly, there is something deeply sociopathic going on here.
If you rode the trains in NYC (abysmal, but the most expensive to build) or sat in on the NYC schools (abysmal, but the most expensive in the world) you might understand. The government here provides incredibly little value for our money.
If we're going to frame things aggressively, I'm happy to pit "letting people keep what they have earned" against "restricting people's access to medical care because they have low-paying jobs" any day.
Sure, any empirical support for that argument? My reading of the empirical evidence is that the US health care system is mediocre both in terms of quality and efficiency, but maybe you can prove me wrong?
I find it unlikely that your disposable income is 10x of mine, but if it is, I know from personal experience that you would not notice much if you lost most of it.
This isn't how these systems work, though. You're confusing the UK (nationalized healthcare) with countries like Canada (nationalized health INSURANCE). The hospitals and doctors are still private, they just get paid by a government plan instead of an insurer plan. A plan with some amount cost-sharing (i.e. not M4A but a more reasonable plan) shouldn't disrupt the market, it just makes it so nobody will accrue massive amounts of unnecessary medical debt.
Matt and Marc: what about Medicaid for all? Basically Medicaid expansion to include everyone. Sounds much easier because all you have to do is spend money instead of altering the structure too much
Yes, this is probably the viable way to get to universal coverage in the US. Medicaid for all, plus employer and Obamacare insurance top-up, plus Medicare for the old.
Medicaid is run by individual states. After NFIB v. Sebelius, that means vanishingly small control over how the states choose to implement it. Our uninsured population is currently high because of decisions made at the state level (FL, TX, and GA).
Medicaid plans are simply not portable between states. Private insurance sucks, but at least they try to keep plans consistent between states so that things are somewhat portable. Without that backstop, things will get even worse.
Medicaid is cheaper on paper, but only because they push a lot of their costs onto other actors. There is no cost saving to be had here.
A better idea would be just to build a new national single payer plan. It would be insanely complicated and expensive, but at least we wouldn’t need to do it through the CMMS.
I think you've missed the most important point about why some degree of government-sponsored healthcare is desirable, which is something I've realized in the course of the current pandemic: To a degree, everyone's health affects the people around them. At least when it comes to communicable diseases, your inability to get tested, vaccinated, or treated potentially affects everyone you come into contact with, and through them, lots more people. It is therefore to MY advantage for YOU to have access to healthcare. This is a valid rebuttal to the kind of people who say things like, "My taxes shouldn't pay for your healthcare."
Now, there's still room to debate how much, or what type, of healthcare falls into this category. Purely elective procedures, probably not. But even many types of care related to non-communicable health issues have benefits beyond the individual receiving the treatment. If treating you for some condition helps you to return to work sooner or avoid going on permanent disability, then that again benefits society in general.
So if you're going to open with a paean to precision and care, you should maybe think a little harder about a statement like:
> There are 28.9 million uninsured people. Nobody should be uninsured.
Because the problem is _not_ that N number of people lack, of all things, an insurance policy. I'm hard pressed to imagine a metric _less_ related to the problems at hand than "are a sufficient number of people handing over a monthly tithe to Anthem/Aetna?" If anything, the fact that we've decided that the economic model that we apply to hedging against the risk of auto theft or house fires is an appropriate one for handling the near-certainty that we will in our later years require medical care is the original sin of this debate.
I guess I'm not worried about the monthly tithe to Anthem (which is why I'd prefer to just cut out Anthem out of the whole thing) so much as I'm worried that a 23 year old who mostly doesn't need insurance gets hit by a car while he's biking and falls into medical debt that will prevent him from accruing any wealth for decades. Mandating that he fork over his tithe to Anthem will only make him mad since he thinks he doesn't need insurance, but I still want him to have it, and I would spend my tax dollars to ensure that if he does have an accident, he won't fall into tremendous debt
If your concern is catastrophic coverage, a mandate with strong enforcement that people carry insurance that has a $20,000 deductible [which could be acquired very cheaply for a 23 year old] would solve that problem.
There are major problems with the US healthcare system, but many of them come from the high sticker prices of many procedures, a problem that Medicare-For-All wouldn't necessarily solve (Bernie Sanders isn't going around saying doctors are paid too much).
The problem is that a lot of people can't afford insurance. That's where Biden's plan is actually really smart. With more and more jobs not offering insurance (less than half of Americans bought their insurance through their employer in 2019 and that was Before the pandemic) if you do away with the cap on who gets eligible for subsidies and cap insurance premiums to your income and make the insurance you can buy gold rather than silver, you make it possible for the over 18M and growing Americans who buy their insurance on the individual market to continue to do so.
That's medicare, and it's model is exactly right (certain payment for certain care needs). The subject here is the other uncertain healthcare costs (and potentially costs for things like vaccines that reduce risk).
I live in a country with universal healthcare and can confirm it's worth fighting for. Healthcare isn't even something I think about. Having a baby? Just show up. Don't even need your wallet, just your health card. I can't imagine having to fight for this basic necessity.
One thing I notice about countries with universal healthcare (eg Australia), is that lots of things apparently don’t count as healthcare. Like dentist visits, birth control prescriptions, psychiatrists…
Depends on the country. In Japan, having a baby is not covered because the Japanese don't think that you are sick when you are pregnant/giving birth and health insurance covers you when you're sick. I guess my point is that what health insurance covers depends on what the country's culture is and, to a large extent, what it was at the time universal health coverage was implemented. For a very long time, Europeans did not consider dental hygiene part of health care. In many cases, they still don't. So it's not covered.
Thanks Marc! Would love to learn more about the history of how healthcare became so entangled with employment. To what degree is this so in other OECD countries? Did they go through an exercise of disentanglement to get their healthcare systems to the place they are currently?
Great article Marc, and I totally agree with you that our goal should be increasing coverage, period, and that we should apply political pressure to achieve any individual policy that would get us closer to that goal. I think a big pitfall is being overprescriptive on specific policy, and we all too often in this debate we somehow let perfect be the enemy of the good (see: you are literally killing people if you don't support immediate universal 100% government provided healthcare).
Honesty, pragmatism, and ambitious goals good politics make.
Matt or Marc - when the ACA was first being put together, wonky technocratic progressives had lots of ideas about how to bend the cost curve of health care in the US. I've heard Sarah Kliff say recently in podcast interviews that a lot of the things that were supposed to bend the cost curve didn't work the way people had hoped.
I'd love to read an in-depth update on the state of cost control - what worked, what didn't, how are costs looking now vs 2008, and what new ideas have been put forward since then.
Yes, this should be blindingly obvious to the entire political spectrum. There are only two valid opinions about US healthcare: "it should be universal and not tied to employment", or "I don't understand US healthcare". Adopting any of the other OECD models would improve outcomes, shrink government deficits, and increase corporate profitability.
There are many, many ways to get to the point where health care isn’t tied to employment. But it is a really hard problem, since health insurance coverage varies wildly between insurance providers.
The most we can realistically do in the near term is ensure that you have SOME coverage regardless of employment status, even though you probably won’t be able to keep your doctor.
It would be really great if had a public option – a standard national health care plan that allowed access to all doctors – but that is going to be astoundingly difficult to build. We are talking decades and billions.
There are a lot of options out there that run the spectrum from primary socialized to primarily market. What they all have in common is their universality, though. The US decision to offload healthcare planning to employers is the worst of all models but it makes (made) taxpayers happy for a while because it was an invisible tax. The typical family is down ~$15,000 a year in this hidden tax - that's a very large room for optimization. Do $2000 checks stimulate the economy? Try $15,000 checks, and every year!
Yeah.. ESHI emerged during WW2 as a way for employers to attract workers since they couldn’t increase salaries due to price controls, and it just grew from there. In hindsight it was a terrible decision, but I guess most decisions are terrible in hindsight.
If we could redesign it from scratch, then single payer would absolutely be the option. At this point, though, the transition costs are impossible.
Honestly, the most progressive system at this point would be:
1) Implement ACA 2.0 so that everyone has access to health care at a fair market price with controlled costs, but minimal changes to the current system.
2) Everyone with comprehensive health insurance gets a (taxable) check to cover healthcare, and they get to pocket anything left over.
I like to imagine that once everyone has healthcare through the marketplaces and mandate that would somehow enable a transition away from employer-mandate healthcare but that's 100% wishful thinking on my part.
I think that's actually correct. A huge part of the complexity of the current system is working around the uninsured. The problem becomes much more tractable if everyone has insurance.
Stacy Abrams is my hero. A large part of the remaining uninsured are in Texas, Florida, and Georgia. Capturing any of those states and implementing medicaid expansion is a crucial next step to getting to universal coverage.
This is exactly correct! Employer-based health insurance benefits are simply a REALLY big pay cut that automatically goes to a paying for a very overpriced product that you may or may not actually need of or want at any given time. I’ll take the market value of my benefits, thank you very much, and use them to shop around and pay for the health care my family and I need. (Oh wait — that’s impossible!)
It's really discouraging how conservatives have regressed since 2008, when McCain's pitch to address health care was to end the tax exemption that makes employer-provided health insurance so attractive compared to higher wages. That was far from ideal, but it was at least a meaningful change that addressed part of the issue. Now it's just "health care is fine exactly how it is, shut up you commie".
Yep. What critics of healthcare reform don't seem to realize is that the current model isn't even a market model. It's a "market" where private individuals pay for insurance but don't meaningfully choose their insurers.
Big ups to Marc the intern. I'd bet it's intimidating to write the first article for a website NOT written by it's founder and one of the best-known policy writers in the United States, about an issue as complicated and aggressive as universal healthcare. Good work, the article turned out great. It matches the style and tone of Slow Boring and has depth to it.
Needed more typos to truly match Matt's style
Nice to see Intern Marc flexing his writing skills! Great stuff.
Does he prefer 'Intern Marc' or 'Marc the Intern'?
Either way lets see more of him!
"Mini-Matt".
I'm a primary care doctor in Southern California in a small private practice. We accept most insurance plans (except straight Medical b/c it simply does not pay enough per visit to break even). We have a mix of straight Medicare/PPO and HMO. My husband works for Kaiser so I've been able to compare various systems and here are my thoughts and observations:
1) I am definitely in favor of a single payor system. Not only do I think it is ethically necessary for a society to care for its citizens, but I agree with Craig, who reflected that "everyone's health affects the people around them." Simply put, I think access to a decent, basic level of health care should be a right (like access to education), not a privilege.
2) There definitely needs to be a "tiered" system. Those who are rich or who can afford, should be able to purchase better access, fancier procedures, "concierge medicine," what have you. I know some people are fixed on fairness and equity, but in my opinion, efforts to enforce "equity" cause untold damage. Utopian visions are frightening.
3)Deciding what is covered will be difficult. There may be wait times for procedures. There will be articles in the papers about how someone had to wait 6 months for their knee surgery, while the rich guy in the next town got his in a week. But you know what? Covering basic primary care , vaccines, generic blood pressure/diabetic medications, etc, is HUGE (as I think the article points out). And I would like to see a cost analysis (if possible) about possible cost-savings if these issues are controlled and people don't end up at the emergency room when their illnesses are out of control .
4) One well-run system would hopefully cut down on costs. I am appalled by the amount of waste that I see simply in my practice. For example- if I have a patient with HMO, money goes to his provider (for ex: Blue Cross), then a portion goes to the IPA, and finally to pay for his care. Think about all of that administrative nonsense - the people at Blue Cross , then the reviewers at the IPA level, etc. And the duplication of tests is outrageous, partly because we don't all have access to one set of records, so the endocrinologist orders the same blood tests that the primary care doctor just did. Whatever else about Kaiser (and it has its flaws), it is generally an efficient, evidence-based, well-oiled machine. To my mind, it's a good model for how socialized medicine could be.
5) Last issue . This is the tough one and I don't have a solution. End of life care. It's very, very expensive. Are there rules that would be put in place if we/the taxpayer are paying for everyone's care? Are there age limits to dialysis? To intubation? What about the person who is brain dead? This is tough, a slippery slope. And what the Republicans use to scare the public: remember the death panels?
Thanks! It’s always good for these discussions to hear from the people actually doing the work, and who actually have to deal with the pain points in the current system.
I agree with most of your points, but why does that lead you to single payer specifically? There are a lot of different realistically achievable ways to get to universal coverage, and it seems like any form of universal coverage would deal with the issues you raise.
We don’t have a full BidenCare plan yet, but it does seem like it would be broadly compatible with what you are talking about.
I guess I see inefficiency and waste in the current patchwork insurance plans we have now. So, again there are multiple levels of bureaucracy with all of the individual plans (Anthem vs Aetna...) As a doctor it's frustrating as well bc all of these different plans cover different medications and procedures. So for example, there's no easy way for me to know which medication is preferred until I get a notice from the pharmacy that something wasn't covered and I have to try switching it. My fantasy would be a single plan where I know what's covered and what is not. Again: the Kaiser model.
But universal coverage of any sort would be great. My brother (a doctor as well, who describes himself as right of center) thinks Medicare for All is a terrible idea and would actually promote run-away medical costs. He prefers market-based competing plans. I disagree, but maybe he has a point.
My opinion is that we will get there. Biden care/ Buttegieg's plan and Obamacare all the baby steps we need to eventually get to single payor. Marc suggested that in the article as well. The country is not ready to move to single payor yet. (I personally think the term "Medicare for All" is not good marketing bc Republicans label it "socialist" and seniors think they will lose something if MC gets expanded to everyone. But ... marketing, not my specialty).
I think that makes a lot of sense. Those seem like big problems that we should be tackling, and it is a total mess.
The patchwork also generates some perverse incentives, in that it seems to be getting harder to get insurance companies to pay for preventative care. They have figured out that people change their insurance enough that someone else will have to foot the bill when the patient gets seriously ill.
I worked as a software consultant, and was dropped into a number of health insurance companies. The weirdest part was how desperately focused they were on making things as simple as possible for the providers. In their view they were providing a simple front end for your guys, and protecting your from the really insane patchwork of details THEY had to deal with. They negotiate with labs, pharma companies, tons of regulators, policy and procedure, auditing, fraud detection, external auditing, and that’s even more of a patchwork.
I think the main thing we need to do now is start building a public option. Do it big, do it right, and focus on transparency, reporting, and consistency. Build it as an open framework that can coordinate with everyone make things simple.
If we start now, we should be in a great place by Kamala’s second term.
It's not that weird. Providers are organized enough that CMS uses CPT codes--which the American Medical Association (which represents dues-paying doctors) develops rather than its own HCPCS codes.
I think the concern that if costs are entirely born by a single government payer, there won't be a lot pushing them down is fair. (When the government takes action to put downward pressure on costs, someone affected will complain that the specific rationing decision is bad - it strikes me as a special-interest dynamic.)
But I think you've also hit on a huge problem with the current system: no one is putting downward pressure on costs now because neither doctors nor patients have great visibility into the system.
There is actually a lot of downward pressure on costs. I huge amount of cost controls were added as part of the ACA, and (possibly as a result of that) health care inflation has actually been low for the past decade.
The downside of that is added complexity. There are now whole compliance layers keeping down costs, but adding to the complexity.
I'm sure Elana will agree that that is just making her job harder ;)
Number three --deciding what gets covered is one of the questions that I think is going to be tough. It's going to be subject to politics and even if we turn it over to an ostensibly independent scientific panel, politics is still going to play a role -- one of the best examples is the fight over recommendations for screening mammography for women in their 40's.
A lot of the controversy is going to be around women's reproductive health and I do not want a situation where in case of an ectopic pregnancy, removing the entire fallopian tube is covered, but methotrexate is not. Not covering spinal fusions unless they meet criteria would probably save money both money and lives. Still, I expect that there will be strong political pressure to cover them for conditions that the science says they're ineffective for.
There will be political pressure and anger. But we’re actually not starting from scratch. Look at MC, a govt program that is actually affordable, and fairly good coverage. And coverage is pretty evidence-based. I still hear people angry bc it doesn’t cover what they want it to cover. Ex: doesn’t cover PSA (prostate blood test) for screening unless there is a reason, such as family history. But that’s based on evidence.
Universal care needs to be good enough, not perfect. There will ALWAYS be a class-based difference in care. Period. But w universal coverage at least people will have access to top preventative care. And no one will go bankrupt bc they got into a car accident or they were diagnosed w cancer.
I'd just like to point out one thing that is *not* wrong with the present-day state of affairs, and which needs to be left unchanged at all costs by any reform: The richest country in the world (USA) is footing the bill for a whole lot of medical research (both new pharmaceuticals and new procedure development) which would not be happening without that money.
Something like a good new Alzheimer's, diabetes or Parkinson's drug would alleviate way more death and suffering worldwide over the long run than more equal care in the US would. Reducing pharma profits (as would surely result from Medicare For All's passage) could easily delay the development of such drugs by 5 or 10 years. That's a pretty price to pay for health care equity in terms of the global body count over those years.
I'm definitely not saying don't provide universal coverage. I'm saying either do it in a privately-provided way that doesn't wreck the incentive structure we have in place now, *or* introduce a new publicly-funded incentive structure for medical research, prove that it works, *then* switch to single-payer.
Glad someone raised this issue because it always seems to get glossed over in healthcare reform discussions. As far as I've seen, none of these reforms have addressed the issue of pharma innovation. It's either "pharma is bad so let's shorten patent terms" or "let's have some hazily defined prize in exchange for giving up patent rights" without delving into the specifics of how that would actually work.
This is not to defend the American healthcare system, which is pretty suboptimal! But someone, somewhere needs to pay for innovation, or we don't get any.
I would like to point out that not every other country on Earth but the US is poor. I have lived both in the US and the EU, and I have seen wildly different prices for drugs that are available in both, so I'm pretty sure that rich states like France or Germany are indirectly benefiting from how high American drug prices are.
Absolutely, and I think the other rich nations have a moral responsibility to contribute more. But we (Americans) can't control them, we can only control ourselves.
Or uh, at least we used to be able to control ourselves?
You don’t need to control other nations though!
Greece has the following policy. For a drug to be covered by insurance, its price must be no higher than the average of the three lowest prices of the same drug in other EU member states. (The best source I found in English is this: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5005395/)
I don’t believe it would be weird for the US to adopt a similar rule (maybe substituting OECD for EU, and taking the average of the highest prices or something). My guess would be that this would lead to companies raising their drug prices in other rich countries, which would lead to better balancing of the R&D costs.
I would be kind of surprised if it had that effect, since most of the other countries in question have various sorts of price controls for drugs.
Well, isn't that a type of price control for the US too? Assuming that the price of a drug in France is x, and a US rule says that this drug would be covered through insurance in the US if its price is up to 2x. The manufacturer would have to choose between lowering the US price, increasing the French price, or saying that they don't care, thus potentially losing insurance coverage either in France or the US. I assume that if a drug stops being covered through insurance, its market share will probably fall, so there is the trade-off facing the manufacturer.
My point is that raising the French price might not be an option, since the French price control law could make that illegal depending on the details. So the result is lower revenue rather than more equal prices.
America spends so much more than other countries on healthcare, compared to Canada it's about double per capita. So while some may go to administrative costs and poor health of Americans (some of which is deadweight loss due to lack of universal care), there's no way that's 50% of spending. I think a lot more than people think is the US footing the bill for expensive treatments to the benefit of the rest of the world.
I'm curious about this topic. Do you have any sources or further reading that can quantify this effect?
There are a lot of different takes on it, and plenty are certainly critical of the position I'm taking here, but from what I've seen those criticisms tend to rest on misunderstandings about econ (like: "pharma companies make way more than they spend on research"... True, but the point isn't to set things up so they end up with exactly enough money to fund their research, the point is to incentivize their research spending at the margin, that is, to make research more profitable so that they'll engage in more of it).
I haven't actually done a huge amount of reading on the numbers, now that I think of it, although the reason for that is that no one seems to disagree that pharma companies make most of their profits in the US. See: https://fortune.com/2018/08/09/trump-drugs-prices-pharmaceutical-research/
"Something like a good new Alzheimer's, diabetes or Parkinson's drug would alleviate way more death and suffering worldwide over the long run than more equal care in the US would."
Sorry, I'm going to need a citation for that. The first great Alzheimer's drug that preserves cognitive performance for an extra year is most assuredly not going to "alleviate way more death and suffering worldwide" than a better treatment for malaria would.
I agree about malaria, the comparison I was making was whether equity in insurance coverage within the US (which is what MFA would achieve) would alleviate more death and suffering than a good Alzheimer's drug. I think the answer is likely no, the drug would be more beneficial over the longterm.
You know what would be exciting? Be honest about how much taxes would go up to pay for this and don’t lie and claim we’re only going to tax the 1%.
Ok! Most people's taxes will go up to pay for this, but it may be true that it costs less money for them than the healthcare they were previously spending the money on
Have you looked into union hostility to Medicare-For-All? A lot of unions bargained for gold-plated healthcare plans in lieu of higher wages, so eliminating private insurance & raising taxes on corporations has a net effect of significantly shrinking the compensation premium for union members.
Yeah… It was one of the things that made Warren’s plan so toxic.
Companies with good unions would not have to pay for worker’s health care, but pay that money in taxes instead. The union workers would have their coverage replaced by public plans with less tailored benefits. The workers would also need to pay taxes to get coverage. The companies don’t gain anything, and the union workers are worse of.
Meanwhile companies like Uber, who currently don’t pay their drivers health care (or even consider them employees), wouldn’t need to pay additional taxes under the new plan. The drivers would need to pay more taxes, and get public healthcare in return.
The main winner is the companies like Uber, who now don’t have to pay taxes that all their competitors do.
True. Which is probably one of the reasons we should transition to a universal private healthcare. Already less than half of Americans buy their healthcare through their employer and that percentage has been decreasing over time as more and more of us transition to contract work and employers increasingly get out of the business of health insurance. If you make the health insurance product equivalent to what you would buy from your employer in terms of quality (ie, financial protection) and cost, that transition will not be as painful.
I think this may be too big a nut for private healthcare to handle, even if we were ok with the negative externalities. Witness the recent failure of Haven.
I think the only real way forward is to first concentrate on building a solid, federal, public option. We need something that can talk to providers, insurance companies, and customers across the country with a consistent set of APIs. This needs to be done company by company, provider by provider, and doctor by doctor. This is a massive job, but eventually we can get to the point where we have a common data interchange and reporting in the entire system.
We need to build this with the current stakeholders, and make them part of the system. Until we build this we have no real way of determining where the fraud is, and where money could be spent more effectively. This will also allow us to reduce complexity in the entire system, removing headaches for doctors and making insurance cheaper. This gives us standardized levels of care, some cheaper and some more comprehensive. You should be able to change employers and employment status without losing your doctors, and keep the same level of care when moving states.
We also need to drive the uninsured rate as close to zero as possible. This is necessary morally, but also practically… the system becomes a lot easier to manage if everyone has an entity responsible for paying for care. This means implementing Medicaid expansion the remaining Republican states, and finally fixing the donut holes and funding cut-offs in the ACA.
Basically, this is Joe Biden’s health care plan.
Once we get to this, there are a bunch of ways forward. We could choose to go towards single payer at this point. My favorite option would be just to send everyone with a defined level of coverage a monthly check to help cover health care expenses and premiums. Everyone gets the same amount, and you get to pocket anything leftover at the end of the year.
Public option is private insurance. So is Medicaid and Medicare. The FI is private, the docs are private, the hospitals are a mix of public and private (with public hospitals often charging more and don't get me started), insurers are private, the cars (Uber/Lyft) that get you to your appointment are private, contractors that work on IT are private. What's public? The ultimate payer and the negotiator. We are almost at universal public system. We "just" have to upgrade our IT and make a couple other changes (eg, licensure and letting anyone who is qualified become a doctor if they want to and med school is free). Stuff like that.
The interesting question here is how much of the cost should fall on new taxes vs on the relative stinginess/means testing of the public insurance offered. I agree that it would save money in the aggregate but there are real limits on how far you can rely on the latter before you need to consider some sort of national VAT/GST of the sort found in Europe (Imagine the political nightmare of pushing that through). This seems to militate in favor of an Australia-esque system where there is a very basic public health insurance plan with private supplementation necessary and encouraged. Great work on the first post! -A fellow undergrad
Not to me it isn't. If you look at box 12 of your W-2, you will see a figure with DD next to it. That's how much your employer (assuming you buy your insurance from your employer) took out of your overall compensation to pay for your insurance. Now, you don't pay taxes on that part of your compensation (which is why it's not a salary and I deleted my post because I accidentally called it that) but so long as the taxes are equivalent to or less than the compensation minus the taxes I would have paid on that part of my compensation, how I pay for my insurance doesn't interest me all that much.
That is MASSIVELY dependent on the approach taken. I believe that is true for the ACA 2.0 approach, but it is completely false when dealing with M4A variants.
I don’t believe that for a second. The amount of money being spent by private insurers and out of pocket private citizens is high.
The majority of health insurance is Employee Sponsored Health Insurance. Your company pays a big part of your insurance premiums for you, in pre-tax money.
If we move to single payer, then your tax dollars pay for your health insurance (with progressive cost sharing so the rich pay and everyone else pays a bit less). Your company no longer has to pay your premiums, and POCKETS THE CASH.
If we left it that that, it means single payer costs about $30 trillion over ten years, which isn’t possible. We now have to figure out how to tax companies trillions to get back the money they managed to pocket.
No one has a slightest idea how to do that fairly and progressively. The net result is trillions of dollars diverted from health care into corporate profits.
We tend to massively overestimate how much health care spending goes to company profits. Even wonks seem to misinterpret what “medical loss ratio” numbers actually mean. Eliminating all insurance and pharma company profits would barely make a dent.
How does this work? It seems that the company that used to pay your premiums now has to pay your higher tax rate. The leftover winnings get split between the worker and the employer, unless the government makes it a slightly higher tax than needed and takes some of them too.
There aren’t any winnings to split.
Take the example of a median income single person on an average ESHI plan. The employee pays about $1.5k a year, the employer pays about $6k per year, and government subsidies make up the rest. Replace that with a single payer plan funded by $7.5k of additional taxation on someone.
You need to get the company to pay at least $6k in additional taxes in order for the worker not to get shafted. If you don’t, then you are subsiding a tax increase on the worker to pay for cuts in corporate expenditures. Very regressive.
You could simply decide that, since the company used to pay $6k in benefits, and it no longer needs to do so, then you can just replace that with a $6k tax on the company.
That would work, if all companies paid ESHI. But half of all Americans don’t get health care through work, so there are lots of companies that don’t pay for employee healthcare. Should those companies pay tax, or not?
If they don’t pay, then you are penalizing companies for providing health care… You are taxing union companies to pay for tax cuts for Uber. Very regressive.
If they pay their fair share, then you are penalizing companies that employ primarily working-class people rather than those that employ higher income earners (who typically have ESHI). You are also really helping higher income self-employed people, who typically earn more since they are funding their own benefits. Very regressive.
Really important comment, thank you!
"In 2019, the federal government and households accounted for the largest shares of spending (29 percent and 28 percent, respectively) followed by private businesses (19 percent), state and local
governments (16 percent), and other private revenues (7 percent)."
https://www.cms.gov/files/document/highlights.pdf
By my computation, nearly 52% of current health spending will need to be onboarded to the Federal government if businesses will be taxed for their contribution. It may be less if there is some role for continuing state and local funding.
With health spending at $3.8 trillion dollars, that's $2 trillion that needs to be shifted onto Federal balance sheets.
I haven’t crunched the numbers for a few years, but that seems broadly accurate. The top line numbers from CMMS are a little misleading, though.
There is a bit of a fuzzy boundary between federal, state, and local spending, but the numbers seem about right. A big chunk of the federal spending is actually just tax revenue that is not collected from corporations in order to subsidize employers to contribute to employer health care plans. A big chunk of the state and local revenues are taxes on companies in exchange for providing health care.
Let’s assume that all the people who get health care other than through an employer can be converted to single payer. This would include Medicare, Medicaid, VA, SCHIP, SSDI, and the thousands of other federal, state, and local programs. Let’s also include people on ACA plans and the uninsured.
Let’s assume that this can be done as efficiently through single payer as through the patch work. I think that is wildly optimistic, but let’s keep it simple.
This leaves half the population with ESHI. For an average single coverage plan, the employer pays about $6k per year and the employee pays about $1.5k. That works out to one trillion paid per year by employers, and 250 billion by the employee. Family plans really complicate the math, but those work as rough numbers for a lower bound.
But let’s look at a median income individual single worker. Right now they pay $1.5k a year for health care. Under single payer they would pay $7.5k in taxes, and get health care for free. The real winner would be their employer, who pockets the extra $6k.
Obviously, you want to figure out how to tax the money that you are giving the corporations so you don’t have to tax the worker that much. You are giving a trillion dollar per year tax cut to employers, then trying to figure out how to raise a trillion dollars in corporate taxes.
We simply don’t know how to do that without massive regressive consequences.
Some people try to fudge the numbers by assuming a 20% total savings on ESHI by conflating MLR and profits. Even if, like Elizabeth Warren, you count the same imaginary savings multiple times, you still don’t have enough money to fill the gap.
And some of that subsidizes Medicare's underpaying for treatment.
You would also have massive dislocation. Insurers are keepers of your electronic health records. Private insurers don't have systems programmed in COBOL. Public insurers do. I would be interested to know how you plan to marry those IT systems so that (eg, people with diabetes) can continue getting their meds.
Is that a guess, or have you actually encountered an insurer still using COBOL? Would not actually surprise me.
I’ve worked with public and private health care, and there is not a huge amount of difference in the tech stack in each. Of course, there are bunches of private companies providing Medicare/Medicaid services, and lots of governments operating private insurance plans, so they aren’t all that different.
There is a TON of work being done on how to share medical records in a HIPPA compliant way. Some private insurance companies still exchange data by converting records to ancient EDI binary files designed for Medicaid, since they can’t agree on any other standards.
It's not a guess. I have not worked directly with the private sector but as part of the effort to pay for Kymriah (more on that here https://www.newyorker.com/magazine/2019/07/22/the-promise-and-price-of-cellular-therapies?irclickid=RyMyd11uDxyLTEQwUx0Mo36KUkEUIx2xxw%3A1Qo0&irgwc=1&source=affiliate_impactpmx_12f6tote_desktop_Bing%20Rebates%20by%20Microsoft&utm_source=impact-affiliate&utm_medium=2003851&utm_campaign=impact&utm_content=Logo&utm_brand=tny) we did have to figure out third party liability, which included private pay. (Kymriah is carved out of Medicaid managed care plans in virtually/all states (I think it's all but I have not done a comprehensive survey of all states that cover Kymriah) that cover it because it's that expensive.) Anyway, one of the issues on both sides is the incompatibility of the systems. There was one case of a lady who was at the time (this was when Kymriah was only approved for people under 18) who was running out of time both because the Leukemia was destroying her blood cells and because she was aging out of the benefit but the hospital asked her to drop one of her public insurance coverages because they said their IT system was not able to talk to the public IT system. Of course since she was Medi-Medi, they asked her to drop Medicare (which at least at that time paid less than Medicaid so one could be a bit skeptical) but there you have it.
Yeesh… My first coding job was writing Fortran 77 to read data from magnetic tape reels. Hand crafted data frames and a compiler so gormless that it would let you assign 3=7, so 3*3 would return 49.
I’ve a modem with a top speed of 3 bits per second, and sent data packets down a wire running the same protocol since 1914.
But COBOL… That’s _OLD_. ;)
Yep. The one thing government is super, super reluctant to pay for is IT upgrades. Especially billing system IT upgrades. How are you going to justify them? Right now, Medicaid and Medicare systems both of which (let me remind you are ultimately run by CMS) can't "talk" to one another. The protocol for people who are covered by both is that a provider bills Medicare first and then, after Medicare pays him, sends copies of the paid bills along with the bill to the Medicaid system so that Medicaid can cover the rest. But here's the thing. The patient doesn't see any of that. Their benefits are not affected by it in the least. It's "just" a headache for the back office people. Now, you started to see some of the issues with never upgrading your IT with CAR-T which, I expect once it deals with solid tumors, is going to force the issue and then all of a sudden you will see a whole new IT system in the public space. But until then (and we're probably talking about a decade), no politician is going to try to justify more money for computers so that billing people can have an easier time of it.
"...but it may be true that it costs less money for them than the healthcare they were previously spending the money on"
Or it may leave them worse off. You have no idea.
Like most policies, the effect would vary by individual situations, but *on average* the idea is that taxes go up, premiums go down, wages for workers moving off their employer plans go up (amount depends on how much of the saved healthcare premiums employers pocket as higher profit). Hopefully that's a wash, though it's certainly not a guarantee. What's clearer is that job lock would be reduced, which is a pure efficiency gain, and that lower-income people would have overall better access to medical care - which I suppose you can argue about the economic merits of, but seems to me that's a positive thing.
"...the idea is that taxes go up..."
But no one can say by how much and for whom.
In the US, health outcomes are worse and expenses greater. In pretty much all countries with government run healthcare, costs are lower.
Then you'll need to be honest as to what rigorous cost controls are going to do to medical providers who are set up for living in the current environment. And the administrative savings won't come close to saving anyone.
Are people going to be ok having 1 or 2 main hospitals for good sized cities?
Sure, doctors can make less money. They'll figure it out.
It's exactly this kind of ignorant response that is going to doom reform efforts. Staff costs are <10% of medical expenditures. You can cut doctor salaries in half, it's not going to save medical centers.
There are wild inefficiencies in healthcare. My last company could accurately predict who was likely to have botched surgery and the only people we could get to pay for it were programs operating under Medicare funding models. The providers had a negative incentive since it meant less procedures performed!
I don't want a system where doctors make less. I want a system where doctors make more. We are a wealthy nation, we can afford it.
I’d rather have more doctors making the same.
That’s fine too. But what would be unquestionably worse would be health care professionals making less so that a bunch of leftists can engage in moral preening.
Have you looked at what nurses get paid in the UK?
What outcomes are worse? I'd certainly rather be an American than a Brit when if I had cancer.
It's clear you arent here to participate in good faith discussions.
For what it's worth, many European countries' cancer survival rates ARE lower than the United States: https://ourworldindata.org/cancer#cancer-survival-rates-by-income . Would not have thought this until checking it just now.
Because they’re cost controlling for things with likely marginal benefit. It would be interesting to see end of life care costs in the US vs other countries.
Skimming this, it looks like US end of life care costs are higher than European peers by around 15-20%: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/working_papers/2018/pdf/wp18-18.pdf . I wish it covered more countries, in particular the UK and Canada, but it's a start.
It's clear that I despise politics. And that you haven't looked at cancer outcomes across different systems.
If you get rid of insurance altogether and then actually “bend the cost curve” through efficiencies and some decent market competition, I bet you could fund the federal catastrophic “welfare” program ensuring universal access with just the cost savings and not have to increase taxes at all. I still don’t understand why universal government insurance is a popular idea.
Perhaps it's because the federal government is pretty bad at a lot of things.
I doubt anyone will be convinced, but there is no real difference in efficiency between public and private health care entities. They are all entities in a heavily regulated marketplace. Every entity acts the way it does because of the regulatory constraints, not because of any “government” / “free enterprise” differences.
Privatization won’t magically reduce waste. Federal monopsony power won’t magically reduce costs.
How do we know? Because there are lots of private, for-profit companies managing Medicare and Medicaid. There are lots of state and federal actors that sell health insurance in the private market. They all co-exists because there are only marginal differences in efficiency.
I’ve worked at both. Offices at private companies are nicer, the cubicles have more tchotchkes, and the coffee machines are WAY better. Everyone is stressed. Everything else is pretty much the same.
The rules for private insurance are structured to optimize cost savings and efficiency, and to minimize fraud. There are vast layers of primary and secondary auditing to make sure that claim amounts are minimized. The downside is complexity and a lot of denied claims.
The rules for public insurance are structured to provide specific levels of coverage, and reducing harm. Administration costs are absurdly low, because everything is done on the cheap. Money is always a constraint, but the rules make detecting fraud and waste hard. It is genuinely hard to tell if an unexpected expense is fraud, or if it is critical funding that prevents the entire system from collapsing.
I am completely unsurprised by this.
Is it though? What services do you think the government is so bad at providing? And in each case, why is it bad at providing them? I think if you take a fair look at it, you'll see that mostly it does a good job providing services, and the areas where it doesn't the reason is usually because somebody wants them to not do a good job.
The Interstate Highway system works pretty well, but it worked better before its funding stayed level through decades of massive growth for the country. People generally really like the postal service, but clearly satisfaction went down when the current administration intentionally sabotaged its services. Satisfaction with Medicare, Medicaid and the VA are all higher than private insurance, and measurable costs and outcomes are better too. Social Security is incredibly effective and well-liked and operates on ridiculously low administrative costs. The FAA, despite plenty of problems especially recently, still has a remarkable track record of increasing the safety and availability of air travel. The hodgepodge of welfare programs leaves tons of room for improvement, but it still makes a huge positive impact on poverty, child hunger, etc.; it did a lot better before people claiming government can't help forced massive cuts to prove themselves right.
It's easy, and incredibly lazy, to just say government can't do anything right. As Yglesias noted recently, Vienna is proof that publicly-owned housing can be great, just as surely as New York is proof that it can be terrible. Presumably it's possible for a private phone company to be great, though my own experience is that Verizon is pretty terrible. There's no magic here; whether it's private or public, to provide good services you have to want to do it and work toward that goal.
Administrative costs of Medicare and of the veterans administration are a fraction of what they are in private insurance (it helps, of course, to not have the attitude that it’s better to incur 99cts in admin and legal costs than to pay out 1$)
“it helps, of course, to not have the attitude that it’s better to incur 99cts in admin and legal costs than to pay out 1$“
If you’re willing to accept fraud, then, sure.
The attitude of private insurers seems to be to resist every claim.
And if you rather pay 99ct in admin and legal costs than pay out 1$ for a claim that with a probability 50% honest/50% fraud, you're still doing a terrible job.
(and don't forget that if you focus on fraud, you will also reject claims with small errors in it, just because it's very convenient to deny a claim)
"People generally really like the postal service, but clearly satisfaction went down when the current administration intentionally sabotaged its services."
Prove it. I mean, really
You say it with that pure, nihilistic zeal, like nothing about public opinion can ever be known because there's no truth. Well...there's plenty of polling on the subject, have a look around. Here's a recent one that shows both the high support and the dissatisfaction with recent service: https://www.filesforprogress.org/memos/voters-demand-protecting-and-funding-usps.pdf
What I was asking for proof of was the lie that "the current administration intentionally sabotaged its services."
The US spends plenty on health care already. The issue is rather that a radical restructuring of health care is needed. But it is true that in contrast to moving the manufacturing base to China, the political elite is probably not inclined in this case to shrug and say ‘them’s the breaks’.
Progressives seem to operate in a framework where the soaring cost of healthcare in our current pseudo-market-based system is like gravity - a physical law that can only be overcome by pushing against it. But in reality do have control over that gravitational force, and I reject any proposal that doesn't deal directly with it. We have zero price transparency in the current system - the consumers of the service have no idea what the service costs and neither do the providers of the service! Healthcare providers have no incentive to bring value to the service. That's the first thing that has to change.
That was pretty much the approach they took when designing the original ACA. They included every single tool to control costs that they could think of.
I don’t think anyone really knows for sure why or how, but it seems to have worked. Health care costs stopped growing out of control starting in 2008, and isn’t as huge a problem these days.
Your position is that the cost of healthcare isn’t a problem these days?
The cost is a problem. “Soaring costs” – how much the cost is increasing, is not currently a problem.
The cost of healthcare per person is, indeed, really high…. Northwards of $10k per person per year. Part of that is due to the unique dysfunctions of the US health care system, and part of it is that the costs of services in the US are broadly more expensive than other places.
Costs were, indeed, rising sharply before the ACA passed. At the time there was real concern that the soaring costs were going to trigger a death spiral.
But since then insurance costs have largely not increased, and remained well under the inflation rate for at least from 2008 – 2018. I don’t have a solid idea about the last two years, though.
It's not a problem currently but I expect that costs will increase post-pandemic because there is a lot of pent up demand for elective procedures (which is how the healthcare system makes its money) and the CAR-T systems will come back roaring. We were expecting an average of 40 per annum beginning in 2020. That of course didn't happen but all that means is that the first year we can expect to see a new 60-80 CAR-T procedures/drugs. (They're procedures in Switzerland and cost 1/3 of the average price in the rest of the world but because of a 1990s policy issued by the FDA, not a law, not a regulation a policy CAR-T is considered a drug virtually everywhere).
Hi Rob - some quick google searches didn't show any substantive slow down in costs increases for health care spending. In fact the top line article was that they continue to grow significantly faster than inflation. Maybe I was just looking in the wrong places, but can you provide some info on where your getting that info?
Understandable… Google has a whole bunch of different charts showing different aspects of spending. The chart at https://www.chicagofed.org/publications/chicago-fed-letter/2018/407 looks about right.
The overall cost slowdown was a pretty well known phenomena post ACA. There was a whole bunch of head scratching in that the fall started before the was ACA actually implemented.
That said: I haven’t followed the numbers closely for the last two years, since I stopped working with health care companies. Finance is, somehow, less depressing. The sense that I get from Charles Gaba’s blog is that overall cost inflation is still under control, but there is some upward pressure from pharma prices.
It seems like drug development and manufacturing costs are continually exploding, as new biologics are significantly more complicated than simple small molecule drugs. Eventually that is going to cause some price jumps.
This type of comment is why politics in America doesn't work. People make criticisms that aren't even factually correct and offer nothing constructive.
1. The ACA had specific price transparency measures. Google it. You'll see
2. Progressives talked about cost reduction so much that during the 2020 primary Politico ran a story called "Would Medicare for All really save money?"
3. US healthcare is the most expensive in the world by far and produces some of the worst outcome of any rich country, which are also getting worse (life expectancy fell each of the last 4 years). It's chutzpah to dismiss change because you care about cost efficiency.
Have you ever attempted to shop around for insured medical services in the US? I have, and it's a frustrating task. Neither the insurers nor the providers could tell me ahead of time what my cost would be. We are not talking about percentage points here -- there can easily be a five-fold difference between apparently similar providers (both in-network, same, very common service). I've had both employer-sponsored insurance and directly purchased insurance from an ACA exchange. There is no difference in price opacity between them and I saw no observable improvement post-ACA implementation.
None of this is to say that better price transparency should be a gating mechanism to preclude universal coverage. On the contrary, with a single or at least dominant payer, it should be possible to greatly improve transparency around price, quality, cost and service quality. There wouldn't be the same argument about the need for confidentiality on contractual terms.
Toothless measures that clearly didn’t work. We need a policy and cultural shift to pull this off.
That’s one of the few concessions to reality that progressives make. The United States suffers from catastrophic cost disease. Fun fact: even if you exclude military spending, Canada spends slightly less per person at all levels of government combined and managed to include healthcare for that amount of money.
Nobody really knows why providing services is so expensive in the US, but it is, from healthcare to education to transit: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-construction-costs.html
Progressives look longingly at the public services offered in Europe, but if Europeans got as little for their money as Americans they might not be willing to support those programs!
This post started out strong and then veered. You say we need to “deal directly with” prices but then say the answer is “transparency”? That is just doing the same “talk around the issue” you just complained about. Why don’t we deal with prices directly and just do price controls on these services?
That's a harder sell than just letting people see itemized prices on a list that's not a bill. Start with the easier lift - in *theory* free market evangelists should be 100% on board with more information & ability to compare prices/know them ahead of time.
Fair points.
However... as a recently-diagnosed Type 1 Diabetic, I've joined a myriad of diabetes facebook groups that are global in nature. What I've learned is that in single-payer insurance programs, there are distinct decisions that country-based benefit managers make around which innovations the citizens of said country are able to enjoy... and not.
In most all state-based health systems, people are "stuck" with a certain technology that has been approved by the state for 3 years at a time, at a time when diabetes management technology is accelerating on an annual basis thanks to technology. This happens in America too, under Medicare. My dad is also diabetic, and his choices are so much more limited than mine. It makes me miserable to think about what he's missing out on because his insurance is state-based.
If state-based systems are unable or unwilling (or can't afford to) keep up with medical innovations, then how can I support such a system, when I enjoy the latest and greatest technology support under my private insurance plan? And how do we incentivize entrepreneurs and companies to push the envelop on medical innovations if there's a limited market for it?
If we go with state-based basics PLUS private add-ons, I can get behind that. But I've switched from being pro-single-payer to anti-single-only-payer, now that I see things from the inside.
This got cut by the final version of the piece, but I'm fully on board with private add-ons. I just want everyone to have government health insurance, and then if people want to buy additional plans, sounds good to me.
The universal healthcare system that has arguably been most successful is the German model (aka the Bismarck model). Germany went to universal, private insurance back in the 19th century and that basic model works still and not just in Germany. It has been adopted by countries as different as France and Japan. The Beveridge Model (UK/Canada) does indeed cover everyone but suffers from the lack of innovation Jon described. The cool thing about the Bismarck model is that it promotes competition within a regulatory environment and at the same time gives people a chance to speak up about the kinds of drugs/innovations they want. In the Bismarck Model Consumer groups (and Germany had a hard time getting those off the ground--would not be a problem here lol) have a seat at the table together with docs and insurers when they decide how much an innovation should cost.
Isn't that similar to the Megan McArdle approach, which was mandatory catastrophic insurance, then private add-ons
With the caveat that each EU member state has its own healthcare system (with a lot of shared ideas but also a lot of differences), my experience growing up in my member state was that people would frequently turn to private providers, even though everyone is mandated to pay the premiums for the public plan. The big advantage in my opinion is that you have more leverage when negotiating prices, if the private provider knows that there is a suboptimal but free option for you.
So, I do support the public system I used to live under before moving to the US, even though my family was using private providers more.
I’m Scandinavian so I’m surely biased by my access to universal comprehensive healthcare, free university, parental leave, subsidized pre-K, basic income for the under-18 and whatnot, but the single most baffling thing about the US is the insistence that marginal consumption for the well-off is a more worthwhile policy goal than universal healthcare. Frankly, there is something deeply sociopathic going on here.
If you rode the trains in NYC (abysmal, but the most expensive to build) or sat in on the NYC schools (abysmal, but the most expensive in the world) you might understand. The government here provides incredibly little value for our money.
"...the insistence that marginal consumption for the well-off is a more worthwhile policy goal than universal healthcare."
By "marginal consumption for the well-off" you mean letting people keep what they have earned?
If we're going to frame things aggressively, I'm happy to pit "letting people keep what they have earned" against "restricting people's access to medical care because they have low-paying jobs" any day.
Take it up with the doctors.
Yes, precisely that. It's just not very important as a moral matter.
Sure, any empirical support for that argument? My reading of the empirical evidence is that the US health care system is mediocre both in terms of quality and efficiency, but maybe you can prove me wrong?
I find it unlikely that your disposable income is 10x of mine, but if it is, I know from personal experience that you would not notice much if you lost most of it.
This isn't how these systems work, though. You're confusing the UK (nationalized healthcare) with countries like Canada (nationalized health INSURANCE). The hospitals and doctors are still private, they just get paid by a government plan instead of an insurer plan. A plan with some amount cost-sharing (i.e. not M4A but a more reasonable plan) shouldn't disrupt the market, it just makes it so nobody will accrue massive amounts of unnecessary medical debt.
Matt and Marc: what about Medicaid for all? Basically Medicaid expansion to include everyone. Sounds much easier because all you have to do is spend money instead of altering the structure too much
Yeah this seems like not a bad idea. Noah Smith has mentioned the same idea, but with lowering the Medicare age to 0. https://www.bloomberg.com/opinion/articles/2020-08-13/universal-medicare-not-medicare-for-all-is-the-best-health-fix
Yes, this is probably the viable way to get to universal coverage in the US. Medicaid for all, plus employer and Obamacare insurance top-up, plus Medicare for the old.
Under Medicare: cover kids and FT students as well and then every two years lower the rates for older citizens
Yesh… What a profoundly terrible plan.
Medicaid is run by individual states. After NFIB v. Sebelius, that means vanishingly small control over how the states choose to implement it. Our uninsured population is currently high because of decisions made at the state level (FL, TX, and GA).
Medicaid plans are simply not portable between states. Private insurance sucks, but at least they try to keep plans consistent between states so that things are somewhat portable. Without that backstop, things will get even worse.
Medicaid is cheaper on paper, but only because they push a lot of their costs onto other actors. There is no cost saving to be had here.
A better idea would be just to build a new national single payer plan. It would be insanely complicated and expensive, but at least we wouldn’t need to do it through the CMMS.
I think you've missed the most important point about why some degree of government-sponsored healthcare is desirable, which is something I've realized in the course of the current pandemic: To a degree, everyone's health affects the people around them. At least when it comes to communicable diseases, your inability to get tested, vaccinated, or treated potentially affects everyone you come into contact with, and through them, lots more people. It is therefore to MY advantage for YOU to have access to healthcare. This is a valid rebuttal to the kind of people who say things like, "My taxes shouldn't pay for your healthcare."
Now, there's still room to debate how much, or what type, of healthcare falls into this category. Purely elective procedures, probably not. But even many types of care related to non-communicable health issues have benefits beyond the individual receiving the treatment. If treating you for some condition helps you to return to work sooner or avoid going on permanent disability, then that again benefits society in general.
So if you're going to open with a paean to precision and care, you should maybe think a little harder about a statement like:
> There are 28.9 million uninsured people. Nobody should be uninsured.
Because the problem is _not_ that N number of people lack, of all things, an insurance policy. I'm hard pressed to imagine a metric _less_ related to the problems at hand than "are a sufficient number of people handing over a monthly tithe to Anthem/Aetna?" If anything, the fact that we've decided that the economic model that we apply to hedging against the risk of auto theft or house fires is an appropriate one for handling the near-certainty that we will in our later years require medical care is the original sin of this debate.
I guess I'm not worried about the monthly tithe to Anthem (which is why I'd prefer to just cut out Anthem out of the whole thing) so much as I'm worried that a 23 year old who mostly doesn't need insurance gets hit by a car while he's biking and falls into medical debt that will prevent him from accruing any wealth for decades. Mandating that he fork over his tithe to Anthem will only make him mad since he thinks he doesn't need insurance, but I still want him to have it, and I would spend my tax dollars to ensure that if he does have an accident, he won't fall into tremendous debt
If your concern is catastrophic coverage, a mandate with strong enforcement that people carry insurance that has a $20,000 deductible [which could be acquired very cheaply for a 23 year old] would solve that problem.
There are major problems with the US healthcare system, but many of them come from the high sticker prices of many procedures, a problem that Medicare-For-All wouldn't necessarily solve (Bernie Sanders isn't going around saying doctors are paid too much).
I don't know how many 24-year-olds you know, but a $19,000 medical bill would certainly qualify as a catastrophe for the majority of them.
The concern was "falls into medical debt that will prevent him from accruing any wealth for decades".
$19,000 would be a significant hardship but not that.
I'm not worried about the 23 year old either. She's on her parents' plan.
The problem is that a lot of people can't afford insurance. That's where Biden's plan is actually really smart. With more and more jobs not offering insurance (less than half of Americans bought their insurance through their employer in 2019 and that was Before the pandemic) if you do away with the cap on who gets eligible for subsidies and cap insurance premiums to your income and make the insurance you can buy gold rather than silver, you make it possible for the over 18M and growing Americans who buy their insurance on the individual market to continue to do so.
That's medicare, and it's model is exactly right (certain payment for certain care needs). The subject here is the other uncertain healthcare costs (and potentially costs for things like vaccines that reduce risk).
I live in a country with universal healthcare and can confirm it's worth fighting for. Healthcare isn't even something I think about. Having a baby? Just show up. Don't even need your wallet, just your health card. I can't imagine having to fight for this basic necessity.
One thing I notice about countries with universal healthcare (eg Australia), is that lots of things apparently don’t count as healthcare. Like dentist visits, birth control prescriptions, psychiatrists…
Depends on the country. In Japan, having a baby is not covered because the Japanese don't think that you are sick when you are pregnant/giving birth and health insurance covers you when you're sick. I guess my point is that what health insurance covers depends on what the country's culture is and, to a large extent, what it was at the time universal health coverage was implemented. For a very long time, Europeans did not consider dental hygiene part of health care. In many cases, they still don't. So it's not covered.
Thanks Marc! Would love to learn more about the history of how healthcare became so entangled with employment. To what degree is this so in other OECD countries? Did they go through an exercise of disentanglement to get their healthcare systems to the place they are currently?
Great article Marc, and I totally agree with you that our goal should be increasing coverage, period, and that we should apply political pressure to achieve any individual policy that would get us closer to that goal. I think a big pitfall is being overprescriptive on specific policy, and we all too often in this debate we somehow let perfect be the enemy of the good (see: you are literally killing people if you don't support immediate universal 100% government provided healthcare).
Honesty, pragmatism, and ambitious goals good politics make.
Matt or Marc - when the ACA was first being put together, wonky technocratic progressives had lots of ideas about how to bend the cost curve of health care in the US. I've heard Sarah Kliff say recently in podcast interviews that a lot of the things that were supposed to bend the cost curve didn't work the way people had hoped.
I'd love to read an in-depth update on the state of cost control - what worked, what didn't, how are costs looking now vs 2008, and what new ideas have been put forward since then.
Yes, this should be blindingly obvious to the entire political spectrum. There are only two valid opinions about US healthcare: "it should be universal and not tied to employment", or "I don't understand US healthcare". Adopting any of the other OECD models would improve outcomes, shrink government deficits, and increase corporate profitability.
There are many, many ways to get to the point where health care isn’t tied to employment. But it is a really hard problem, since health insurance coverage varies wildly between insurance providers.
The most we can realistically do in the near term is ensure that you have SOME coverage regardless of employment status, even though you probably won’t be able to keep your doctor.
It would be really great if had a public option – a standard national health care plan that allowed access to all doctors – but that is going to be astoundingly difficult to build. We are talking decades and billions.
There are a lot of options out there that run the spectrum from primary socialized to primarily market. What they all have in common is their universality, though. The US decision to offload healthcare planning to employers is the worst of all models but it makes (made) taxpayers happy for a while because it was an invisible tax. The typical family is down ~$15,000 a year in this hidden tax - that's a very large room for optimization. Do $2000 checks stimulate the economy? Try $15,000 checks, and every year!
Yeah.. ESHI emerged during WW2 as a way for employers to attract workers since they couldn’t increase salaries due to price controls, and it just grew from there. In hindsight it was a terrible decision, but I guess most decisions are terrible in hindsight.
If we could redesign it from scratch, then single payer would absolutely be the option. At this point, though, the transition costs are impossible.
Honestly, the most progressive system at this point would be:
1) Implement ACA 2.0 so that everyone has access to health care at a fair market price with controlled costs, but minimal changes to the current system.
2) Everyone with comprehensive health insurance gets a (taxable) check to cover healthcare, and they get to pocket anything left over.
3) Focus efforts on the more difficult problems.
I like to imagine that once everyone has healthcare through the marketplaces and mandate that would somehow enable a transition away from employer-mandate healthcare but that's 100% wishful thinking on my part.
I think that's actually correct. A huge part of the complexity of the current system is working around the uninsured. The problem becomes much more tractable if everyone has insurance.
Stacy Abrams is my hero. A large part of the remaining uninsured are in Texas, Florida, and Georgia. Capturing any of those states and implementing medicaid expansion is a crucial next step to getting to universal coverage.
Working around the uninsured is actually a big part of why we have the mess we do, The uninsured (generally) don't vote.
This is exactly correct! Employer-based health insurance benefits are simply a REALLY big pay cut that automatically goes to a paying for a very overpriced product that you may or may not actually need of or want at any given time. I’ll take the market value of my benefits, thank you very much, and use them to shop around and pay for the health care my family and I need. (Oh wait — that’s impossible!)
It's really discouraging how conservatives have regressed since 2008, when McCain's pitch to address health care was to end the tax exemption that makes employer-provided health insurance so attractive compared to higher wages. That was far from ideal, but it was at least a meaningful change that addressed part of the issue. Now it's just "health care is fine exactly how it is, shut up you commie".
Yep. What critics of healthcare reform don't seem to realize is that the current model isn't even a market model. It's a "market" where private individuals pay for insurance but don't meaningfully choose their insurers.