While I’m on the subject of healthcare reform, one of the things that has baffled me for years about the subject is how narrow the debate is. Both sides treat the multiple possible different models for healthcare systems as though they were dangerous and foreign when the reality is quite different.
How would Americans have reacted to a single payer system? Pretty well, I’d say off-hand. The federal government runs the largest single-payer system in the world, Medicare. It also runs the largest fully socialized system in the world—the VA which, astonishingly, is larger than Britain’s National Health Service.
And then there’s the Medicaid system. IMO the inevitable trajectory of the PPACA is towards something resembling Medicaid for all, an outcome I strongly suspect that almost no one will like.
Just to put add a little fuel to this fire, here are the costs per patient of those three government health systems:
| System | Cost per patient |
| Medicare | $10,365 |
| Medicaid | 5,790 |
| VA | 6,000 |
By comparison present per capita healthcare spending in the U. S. is around $9,146 (which includes Medicare, Medicaid, the VA, and purely private spending).
I realize that to some extent I’m comparing apples to basketballs but it at least provides a basis for thought.
I suspect Medicare could be significantly more efficient were it empowered to negotiate prices, and assuming those tasked with getting the best deal had any interest in doing their jobs.
The government doesn’t know what “cost” is independent of a private market. U.S. programs outsource cost-discovery to the private sector by purporting to pay a percentage of what the private market costs.(*) That is where the wheel hits the road. A government monopoly will have to discover what cost is when it cannot afford the benefits it’s paying or it lacks providers for services.
(*) Not that providers don’t know how to game this system, but they can only game it to the extent they can manipulate prices across public and private systems.
That’s certainly another way of looking at it, PD. I have tended to view our system as one in which Medicare is a price support.
One of the interesting things is that the medical specialty that wages of the most portable specialty (GP) are the most comparable across international markets. I have tended to view that as our healthcare system pushing up the cost of medicine worldwide.
I frequently deal with government insurance programs outside of healthcare. I don’t think this is an easy issue. It’s not a price floor/ceiling issue. If the government is the only source of income for a given set of services, how does the government know it is paying too little or too much?
Sure, the cost per patient for Medicare is higher than for Medicaid or the VA, but it has to be noted that the patient has already paid for a lot of his Medicare “benefits” over a lifetime of working. Though I am entitled to Medicare after some 45 years of paying FICA taxes, I find it cheaper to get my care through medical tourism, where I pay a fraction of what my annual premiums, deduction and co-pays would come to.
Medicare, Medicaid and the VA should just contract with Cuba, just 90 miles away from our shores, to provide medical and dental care for qualifying Amerikans.
“If the government is the only source of income for a given set of services, how does the government know it is paying too little or too much?”
Interesting question and it reminds me of military service. Accession and retention statistics are very closely scrutinized and analyzed in the US military. While adjustments to base pay and entitlements are difficult because it requires an act of Congress the services use other incentives to try to ensure they achieve the desired quantity and quality of manning. The military competes with the US civilian labor market and adjusts as necessary, though not always successfully. All this has to be managed to remain as close as possible (without exceeding) the Congressionally authorized end strength.
That’s just one aspect though, only about 1/3 of the pie is spent on personnel.
The VA acts similarly with respect to doctor compensation. If anything the VA might give a bit of a clue what the actual market cost for salaried medical professionals might be.
The VA might, as long as you understand they work many fewer hours than people in private practice.
Steve
Steve,
I’ve read there is a big difference in the hours. Maybe you can shed some light on why fewer hours and $150-300k a year are insufficient to attract physicians into the VA system.