There’s one thing that’s got to be clearly understood: the problem with our healthcare system isn’t that healthcare insurance premiums are too high. It’s mathematically impossible for that to be the case.
Insurance costs are about 30% of total healthcare costs. No reasonable person believes that can be eliminated entirely—every system has costs of administration. We can only guess at how much that 30% might be reduced if at all. I think the best WAG is to use the Canadian experience as a model. Canada’s administrative costs amount to about 15% of the total. Cutting the administrative costs of our healthcare system in half won’t make healthcare affordable to everybody. It won’t even make it practical to subsidize just a few people’s insurance.
It most emphatically does not explain why we pay three times as much for healthcare as the country that spends the second most per capita (Switzerland). That’s the problem with our healthcare system—healthcare is too expensive here. And insurance premiums are high because healthcare is expensive. It’s not the other way around.
I’d be tempted to support this idea:
WASHINGTON — The health insurance industry said Wednesday that it would support a health care overhaul requiring insurers to accept all customers, regardless of illness or disability. But in return, the industry said, Congress should require all Americans to have coverage.
The proposals, put forward by the insurers’ two main trade associations, have the potential to reshape and advance the debate over universal health insurance just as President-elect Barack Obama prepares to take office.
In separate actions, the two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, announced their support for guaranteed coverage for people with pre-existing medical conditions, in conjunction with an enforceable mandate for individual coverage.
In the absence of such a mandate, insurers said, many people will wait until they become sick before they buy insurance.
if only to debunk the idea that insurance reform alone will cure the problems with our system except for one thing. Our experience with healthcare reform in this country is that we get one bite at that apple once every 10-15 years.
The history of federal tinkering with the healthcare system goes back about 40 years and since then there’s been one major course correction or attempt at a major course correction roughly every 10-15 years. The first big reform after the enactment of Medicare and Medicaid back in the 1960’s was when the government shut down the gravy train that physicians and hospitals had been riding in the late 1970’s. During that early period there was little oversight of the new system and healthcare providers asked for and got nearly anything they wanted. Physician salaries and hospital revenues soared, many times the rate of inflation, much faster than other professions. That’s the core problem we’re dealing with now: we’re starting at too high a base.
The next major attempt at reform was Hillary Clinton’s ill-fated attempt to revise the system. Not much but a bitter taste resulted from that. The next major reform after that was Medicare Part D.
I have no idea where people get the idea that we’re going to have the political will to fine tune the system indefinitely. The record just doesn’t support it. And we need to solve the pressing problems at hand now not wait until the next time the ring comes around.
Isn’t that part of the argument for Canadian-style single-payer? That doctors can’t get too excessive salaries, since their groups negotiate on a fee schedule for covered services with their provincial governments, and you can only do so many patients? Of course, that has its own problems (you don’t get as many specialists).
In any case, I’m not surprised the “mandate game” has come up, again. It seems to do that every 10 years, actually; Nixon started it, and every now and then you see a state try and pull it off.