At NRO Jonah Goldberg declaims:
Meanwhile, the Democrats know that Obamacare has been a huge albatross for their party and understand that the best thing that could happen for them is if the Republicans agreed to keep Obamacare in name (i.e., abandon the rhetoric of “repealâ€) but do whatever is necessary to make the thing work. But the GOP is doing the opposite. It’s largely keeping Obamacare in terms of policy (at least the really popular parts) but rhetorically its claiming to destroy Obamacare utterly. So, both the Democrats and the Republicans end up claiming this is a repeal of Obamacare when it’s not. It’s all a war for the best spin, not the best policy.
to which Kevin Drum responds:
Would Democrats be willing to support some conservative priorities—tort reform, HSAs, block granting Medicaid—in return for this? Beats me. But Democrats have sure made it clear that keeping Obamacare and fixing it is what they want. If Republicans truly have any interest in this, they shouldn’t have any trouble finding willing listeners.
which would sound as though they’re in material agreement. Except for one small detail. Does Kevin have any proposal for “fixing” the ACA that doesn’t involve shoveling ever-increasing amounts of money at it? It seems to me that’s a basic problem. The system as constructed (not as envisioned but as constructed) isn’t stable.
The more we have these battles about Obamacare the more I think we are headed for what Warren Buffett and the dems have wanted all along — universial health care, aka single payer. The foundation for this was set in place when Obamacare was passed, knowing it was unsustainable and would fail.
The rest of us are just along for the ride.
Drum doesn’t have a proposal, but I do. Convert the for-profit insurance companies to non-profits. Let them compete nationally, pay them based on how many customers they get and require that all profits be disbursed to those customers as rebates. Also encourage those companies to reduce administrative costs with a bonus structure for efficiency.
That’s the single-best thing you can do to fix Obamacare.
Good on you for proposing something. There’s a constitutional problem with your proposal. This:
is an unconstitutional taking. However, premiums rise and will continue to rise with the cost of care. As Uwe Reinhardt put it 15 years ago, it’s the prices, stupid.
Consequently, any reduction in insurance company administrative costs including cutting them to zero, i.e. single-payer, cannot achieve the desired objective.
The single biggest current problem with Obamacare is lack of competition. Making the industry non-profit and national in scope solves that immediately. Yes, premiums will rise due to other factors but this buys time. It also eliminates both the perverse incentives to decrease costs by denying coverage and the costly departments devoted to finding ways to deny that coverage.
I agree but it’s remarkably little. The administrative costs of the Canadian system are about 15%. Assuming we can equal that the best we can achieve is to cut our present insurance administrative costs in half. At the present rate of increase in health care costs cutting insurance company administrative costs to zero and having the federal government assume them through a single-payer system would give us about two years. Cutting them by less would provide commensurately less running space.
I don’t think Canada’s system is a good example to follow. As you point out their administrative efficiency is only marginally better than the private insurance industry. It doesn’t need expensive ad campaigns, complicated payments and billing departments or recision teams, so where’s all the money going?
Beats me. But in terms of economy and culture we’re more like Canada than we are like the U. K., France, or Germany so it’s as good a comparison as we’re likely to find. I wouldn’t be surprised if the floor on health care insurance administrative costs were higher in the U. S. than it is in Canada.
That’s why after supporting a single-payer system for the U. S. for about 20 years I threw in the towel 25 years ago. We need to cut costs and we can’t do that by relying on a change in who pays to do it for us.
I don’t see how it would be possible to substantially reduce administrative costs without getting rid of the fee-for-service reimbursement system (something I think is necessary).
Like Dave, I’m not sure how it would be possible to force insurance companies to become non-profit, especially when every other part of the system will remain for-profit. I can also see a couple ways for them to get around that anyway.
The easiest way is to fund formation of new insurance firms as non-profits and slowly squeeze the for-profit sector out of existence.
Fee-for-service isn’t what impacts private insurance administrative costs but it is a major component of overall cost growth. The byzantine complexity of our multipayer system in which each company has multiple schedules, advertising, and recision teams require a lot of manpower. Fixing that is the simplest part of the problem. The hard part is getting doctors and executives to take a pay cut.
I think FFS is a big part of that byzantine complexity. It’s not surprising that medical coding is experiencing huge growth as a career (complete with certifications, etc.).
And as long as FFS exists, it is a practical impossibility to get doctors and executives to make a pay cut.