I wonder how many economists, libertarians, or advocates of health care reform would take the affirmative side of this debate question:

Resolved:  the U. S. should have a health care system that covers only some of the American people and 74% of which is subsidized by the government.

I suspect not many.  But that’s the status quo as characterized in this post at American Prospect (hat tip:  Mark Thoma).  If you oppose reform, believe reform is impossible or undesireable, or propose solutions that are political non-starters, that’s exactly the proposition that you’re defending.

Mark concludes:

…the reality is that the current system is not functioning for all and it is not sustainable going forward. Changes to health care will happen, the question is type of changes will occur.

I agree with that completely.  Mark supports transition to a single-payer system the virtue of which, as I understand it, is that administrative costs (which in the United States have risen to be the largest single component of healthcare costs) can be brought in line with the administrative costs in other developed countries (which are considerably smaller although rising).  In my view we need to consider making a transition to a system in which the demand side incentives and the supply side bottlenecks are both addressed.

Is that a single-payer system?  Is a single-payer system a first step in the right direction?  It would be more prudent to start considering this now rather than waiting for the flywheel to come off and producing a poorly considered system in the middle of an emergency.

14 comments… add one
  • Having witnessed the madness that is the US health care system and its sheer perversity, it strikes me that a universal basic single payer provisioning for core health services with private add ons could hardly do worse. Ideological whinging aside.

  • julie Link

    Anyone thinking seriously about Us health care should google Dr. Berwick. He is an advocate of an open system were results and methods are transparent. With a few million dollars he got 2/3rds of US hospitals to sign onto a few simple reforms which are estimated to have saved a hundred thousand lives. It is opinion that up to 50% of our expences are waste.

    He is hated by many doctors because if the surgeon who operates on you has a higher than average rate of fatalities he wants you to know it. Obviously this isn’t popular in a system were doctors avoided admitting mistakes and spending modest amounts to rectify them to one were they got to pretend they were perfect with huge malpractice settlements being the response of an embittered public. It did not matter that a system which admits mistakes setlles with many more, but pays less because public good is not an issue to many doctors if it requires actually admitting they goofed.

  • Thanks, julie, I will.

    The problem (and the reason I mention the supply bottlenecks) is that every cost saving in healthcare represents somebody’s income. Getting the administrative costs i.e. private insurance company profits out of healthcare is what motivates those who advocate a single-payer system under the theory that by doing that you can get more bangs for the buck.

    Greater efficiencies through reform of hospital and physician practice is another but I believe that, unless the supply bottlenecks in healthcare are relieved that’s unlikely to reduce costs.

  • Nate Ogden Link

    Problem with HC reform is the proposals come from people with no idea what they are talking about. Single Payor won’t solve any issue only worsen them. I know this because for the past 18 years my family has owned a TPA which pays insurance claims. If we are lucky we get $20 per employee per month regardless if they cover family or not. That’s less then 5% of the cost. If you could completly eliminate our expense you have only managed to reduce healthcare 5%. If you think a government regulated monoply could do it cheaper please try. To think admin is the largest component of HC makes no sense unless your including provider administrative cost which wouldn’t be addressed by a single payor, there still billing. None of the mentioned problem areas address the true problem with our system…consumption. Our HC cost more because we consume more and until you tell people no the cost will increase. You can’t offer steak and lobster at a buffet and not have to raise cost cause that is what everyone will eat

  • Forget single payer… that would give either the gov’t or a corporation complete control over what type of treatment we get.
    As an doc who worked for years with the IHS, might I suggest that for catastrophic stuff, it’s fine. For “luxuries” like fixing knee cartilege or getting an MRI for your back, forget about it.
    My suggestion is a two tier system…let those who don’t have insurance go to clinics and get care for serious stuff…not handouts.
    After all, why should taxpayers pay for yuppie’s luxury items (prozac for PMS, belly tucks etc) while poor people, who don’t go to docs unless they really need to pay taxes for it?
    Ironically, in the days before we had to write everything to get paid, we docs did a lot of “free” care…not something that can be done with HMO’s.

  • I think that’s a perfectly reasonable suggestion, Boinkie. As I see it the key problem is cost control and I haven’t seen much on the table that would do that. For those on one side of the aisle it’s single-payer which would, at best, have a one-time effect. For those on the other side of the aisle it’s tort reform which is not a major cost component.

    Nate Ogden:

    The stats I’ve seen are that administrative costs amount to 35% of the total healthcare bill. If you’ve got better stats, I would very much appreciate seeing them.

    I’m looking for solutions not proposing them.

  • Nate Ogden Link

    It depends on how you define administrative cost. Employers define it as how much it cost them over and above claims to run their plan. Economist might include providers cost to bill and keep records. Either way a single payer with no competition will cost more then a free market and complying with government mandates and regulations cost more. Ask any hospital about complying with Medicare rules. Take government totally out of the system you will see a huge drop in cost.

    It’s not as complex as people make it, it is all about consumption. 10 years ago we would get just under 2 claims per employee per month average for a group, now it is well above 4. People are getting more care, most of it wasted.

    An example to show the last point and illustrate why single payor would be a complete failure. Look in the back of financial magazines or small business papers and you will see ads for imaging centers and sleep studies. They clearly state it’s a for profit business and you don’t need to be a doctor. Starting a couple years ago we got flooded with claims for sleep studies and other questionable diagnostic test. The cost got so out of hand most of our clients don’t cover them anymore. Private sector when forced can react to abuse if not prohibited by regulation. In a single payor system they give campaign contributions to politicians, get their test covered then just charge more and run more needless test. Medicare now covers most experimental treatments for cancer and new drugs, it’s a huge slush fund for corporations now, and look at the cost spiral out of control. No politican is going to turn down easy money and constituents demanding their slight ray of hope be covered on the tax payers dime no matter how long the shot. Single payor is snake oil, only thing it fixes is the sellers pocket book. Look at the history of government subsidised healthcare, the start with gernerous benefits then increase them for political goodwill till it breaks the system then slash them and start all over again. TennCare being a prime example. Is a rollercoaster healthcare system what we strive for?

  • Nate Ogden Link


    Every person is reguired to maintain 40K deductible healthpolicy provided by private companies with limited goverment regualtions as it pertains to covering experimental and test treatments. Policies are guaranteed issue and pool rated. Gov covers poor.

    Published pricing along the lines of a simplified CPT/UCR system cut to about a 1/4 of current codes though. Do away with DRGs.

    Claims over the 40K are paid at set pricing no matter who the insurance is through, once person passes their threshold government discount kicks in.

    Employers or individuals can buy insurance for services under 40K, minimum deductible around 2000. Insurance means protection from an uncertain event, annual physical is known insurance is a poor way to provide healthcare financing.

    Expand HSAs and HRA for people to be responsible for using their money wisly and questioning doctors.

    No PPOs or HMO people go see any doctor they want based upon quality of the doctor and how much the doctor charges.

  • It’s not as simple as cutting down on “unecessary procedures.’ My sister had terrible internal pain. Doctors decided it was psychosomatic and that she was looking for painkillers. Her brother in law, a doctor, suggested she get an ultrasound. Her HMO refused it as ‘unecessary.’

    She was finally diagnosed with a rare sarcoma — in the later stages — resulting in two major surgeries and multiple chemos. Now it’s mtestisized to lung and bone. More surgeries. More chemo. There is a vast difference in survival rates in this cancer between the early diagnosis she could have had, and the too damn late diagnosis she got from a pennypinching HMO.

    Hundreds of thousands of dollars — and most likely the life of a woman with a two year old daughter — so that the HMO could save seventy-five bucks on an ultrasound.

    Sorry, but the Republican ‘let them eat cake’ approach is pennywise and pound foolish. We pay twice what other countries pay, and see no health benefits. And one recent study indicates that even wealthy Americans are less healthy than middle class Brits with their supposedly inferior socialized medicine.

    There is something wrong with health care in this country — wrong practically and wrong morally. More free market voodoo is not the answer. Your local hospital is not a Wal-Mart.

  • Nate Ogden Link

    in a free market system were your sister was free to see which ever doctor she wanted and spend her money how ever she wanted she could have got that $75 ultrasound. HMOs are a method of rationing that outlived their purpose and are on the death bed…true capitated HMOs that is, the financial entity the HMO was formed under will go forward as it has better legal standing then a health insurer. I don’t know anyone that advocates the continuance of HMOs but if you ignore what spawned them your doomed to have to put up with them again in the future. Prior to HMOs cost was going crazy with providers elbow deep in employers’ pocket with fee for service plans. People abused the PPOs and even more so the indeminty plans which left employers no choice but to go with very restricitive HMOs. Anyone advocating single payor or looking to the government for solutions for healthcare problem needs to also admit the federal governments role in creating the HMO monster. It wasn’t just a simple legislative gaft that allowed them to be formed there was federal legislation mandating that every employer group over 100 lives, or right around there, offer an HMO. HMOs in the early days picked off the young healthy workers driving the loss ratio of the PPO or indeminty plan up each year forcing more and more people to the HMO till the other plans where prohibitivly expensive. Employers finally got to a point were they dropped all plans but the HMO. It’s funny to watch someone complain about HMOs and beg for socialized medicine when the HMO is what socialized medicine gave you. If you go to a single payor government issued universal policy what do you think it will look like? Most likly everything you decry now just with no oiption to buy your way out or choose something else.

    Not to be cold but for someone’s life being at stake why didn’t she get the ultrasound done anyways? Our HC system allows any person with $75 to get an ultrasound. That’s why it is better then any other socialized system. Ratioing happens all the time in other systems, but over there if you wanht to skip the line you either have to be supper rich, go out of country, or you have no alternative. Your in a free country not a communist one, we were founded on individual freedom and reponsibility, if you think you need an ultrasound borrow the money from family and go get one.

    The paritisan jab was off base and shows the problem when you listen to liberal academia and their studies. Our free market provides access to the best healthcare in the world, meaning it is available for those that choose to take it/earn it. If rich or poor people choose to live unhealthy lifestyles, short of a big brother mandate that all citizens get annual check ups and follow their doctors order, what can any health system do?

  • Nate:

    If socialized systems are so terrible why do they get better longevity for half the money? The French have lower infant mortality and longer lifespans and spend a fraction of what we do, and yes, they have minority populations and immigrant populations in the mix.

    As for the $75 ultrasound, she believed her doctor was giving her honest medical advice as opposed to keeping an eye on her company’s profit margin. If my sister were French she’d likely have gotten the appropriate care, despite all the scare stories about rationing. Because she was American and made the mistake of trusting her profit-driven doctor, she has a rather different prognosis.

    It’s not a case of liberal media: the numbers are pretty simple. We spend far, far more and die younger.

  • Nate Ogden Link

    I have never heard of a universal healthcare proposal or single payor proposal in the US that would make providers employees of the system with fixed salaries. Under all the proposals out there now doctors will still be profit driven. As long as doctors are motivated by profit with no checks by their patients that scenerio will continue to play out. You will never get the medical community in the US to accept fixed incomes.

    Infant mortality, life expectancy, etc etc being directly coorelated to quality of Healthcare delivery is an academic falacy. As an axample my company got a new client 3-4 years ago, an existing client of ours that offered decent healthcare bought another comapny. We went down to enroll the people and found a few with serious medical conditions. One gentleman in particular was diabetic but non compliant with his Drs care instructions. Over the next 3 years he lost a foot, then a leg, then died. The insurance we gave him would have covered all the care and hospitilazation he needed. We made countless efforts to get him compliant and he refused. How does his decision to refuse to do what was needed and needlessly run up cost negativly reflect on our delivery system? No delivery system can force people to take responsibility for their own care. That man chose to die, while wasting 100,000’s that could have been used by other people for better care. Your sister chose to believe a Dr instead of taking responsibility for her own care. The freedom our HC system allows, like all of our other freedoms in america, comes with personal responsibility.

    Every month we see people that get their stomach stapeled because it is easier then watching what they eat and exercising. Some cases the people really have no choice but 75% of the time it’s personal choice, the mortaility rate on that procedure is ridiculus yet people take the expensive easy way out. That’s not an option in socialized medicine. Our infant mortality is due to lifestyle not lack of healthcare. Every mom in this country except some super rural places has access to free prenatal care regardless of income. It’s by choice they choose to not take it, how does any HC delivery method change that? Are you going to pass laws that mothers must get prenatal care, people must eat less McDonalds, how about a national exercise law?

  • Nate:

    My sister’s to blame for believing her doctor? I see. So you’d rather have people mistrust their doctors which would, of course, require an endless series of second opinions? And you have no problem with paying as patients go from doctor to doctor to doctor because they are not supposed, under your theory, to take a doctor’s advice seriously?


    You dismiss as fallacy the idea that health care is related to longevity? Oh? Then why, pray tell, do we bother having health care? It doesn’t help for a doctor to give an innoculation? It doesn’t help for a doctor to check on fetal development? Doesn’t help to diagnose and treat strep before it becomes something more dangerous? None of that contributes to longevity? One wonders why we bother with doctors at all.

    Your position is absurd on its face, and your strained effort to place the blame on the patients is morally appalling. That’s nice you have your anecdote of the guy who won’t take his insulin, but that’s a vignette, not an explanation for the fact that we pay TWICE what other countries pay. I’m betting that some Frenchmen also don’t follow doctor’s orders.

    Our infant mortality is due to lifestyle? No doubt. But then the same would hold true for countries that have lower infant mortality and do it at half the cost. Right? Or are we to assume that women in European countries never drink while pregnant? If not, why? Possibly because they have better health care education, better prenatal care, better follow-up from their evil socialized systems?

    As for taking doctors out of the hunt for profits, they are in part so motivated because our system requires them to take on hundreds of thousands of dollars worth of debt to become educated in their field. Then it requires that they meet huge insurance costs. Then it requires them to keep at least one full-time employee who does nothing but keep up with health insurance regs and harrassment from a dozen different companies. Offer family practice doctors a chance to make a clean 80 0r 90k a year without all the debt and hassle I’ll bet two thirds would sign up tomorrow. I guarantee you if I put it to my kid’s pediatrician he’d go for it.

    Every other advanced country manages it. You seem determined to convince us that we can’t. Are Americans just dumber? Or is it just that there are a lot of hogs at the trough who don’t want to cut back and change their lifestyles?

  • Nate Ogden Link

    Mistrust their Doctor no, but also not blindly follow every piece of advice without questioning it. You place doctors on a pedestal like their super humans who only desire is to serve the humbled masses. Medicine is a job just like any other. Doctors by profession are no more honest or ethical then used car salesman, attorneys, or politicians, do you believe every word they tell you? This is the logic that disproves your entire liberal utopia…no one is 100% concerned about your health and well being besides yourself. Everyone else has at least some ulterior motive in the advise or service they provide, to not take this into account and be recognizant of it is foolish and endangering your own life. Knowing what your sister does now does she wish she had spent the $75 to pay for her own ultrasound? What has changed from then to know? Only her trust of the medical community. How you can blame the healthcare system but place no blame on the doctor or your sister is just foolishness. Only two people had the power to order that test when it was needed, the majority of the blame would go to the doctor for cutting corners or missing something and a little to your sister for not questioning it. No matter the delivery system surronding that appointment one of those two people must order the test, even if we had French Healthcare there is no assurance that test would have been ordered if both parties acted in the same manner. You would rather trash an entire system then admit the real problem.

    If your theary on life expectancy and HC delivery was true why is there not a bigger difference in our mortality tables for those with and without insurance for periods of time exceeding X? I never said good healthcare won’t extend your life I said you can’t determine it based on HC delivery. Your straw arguments show the weakness of your beliefs. Countless studies show American’s watch more TV, eat more, exercise less and generally lead an unhealthier lifestyle then most other countries. We also work more years, longer hours, and complain of more stress. You would ignore all those readily available indicators of increased healthcare cost and lower life expectiancy and blame our delivery system instead.

    What’s morally appaling is people advocating drastic change without any facts. Have you pointed out any facts to support you position that change would improve our system? Most studies place diabeties non compliance at 50% or more. These people know what they have to do and choose not to do it yet you want to place no responsibility on them? If you want to be French and have a wet nurse then move to France, here in America we have a history of personal responsibility and most American’s want to keep it.

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