In this morning’s The Conversation feature at the New York Times columnists David Brooks and Gail Collins banter about the advantages and disadvantages of a single-payer system. I think that Brooks’s head is basically screwed on right on this subject.
I wouldn’t have an objection towards going to a single-payer system as part of a comprehensive package of healthcare reforms that also included cost controls, mostly by reducing the demand for healthcare and increasing its supply. Without those additional reforms I would be vehemently opposed to changing to a single-payer system, largely because as noted yesterday we have pressing problems with our system and only get a bite at reform once a generation. We can’t let the opportunity to do what we must do pass pay in the pursuit of ideological objectives we’d like to achieve.
In my view the most we’d be likely to achieve by going to a single-payer system are some marginal reductions in the cost of administration. Judging by Canada’s experience we probably can’t save more than 10 or 15% of costs by that means, a pittance when you recognize that we’re spending twice as much per capita on healthcare as the nearest competitor, tiny Switzerland. That’s not nearly enough and it does very little about the trend of increasing costs which is the one item we must come to terms with. Healthcare administrative costs are not the largest segment of the healthcare cost pie, they’re not the only segment that’s increasing, nor is they the segement that’s increasing the fastest.
There are any number of other ways to improve the efficiency the administration of health insurance claims other than going to a single-payer system and they’re ways that are more consistent with the direction that I’d like to see our government start taking. I may expand on that as time allows.
There is no need for radical reform of our healthcare system. All that is needed are some simple reforms to make it more like Walmart, Home Depot and Sears:
1. Force all healthcare providers to post all charges for all procedures by CPT code on the web for all to see.
2. Disallow price discrimination so as to treat all clients the same who walk in the door.
3. Tax all healthcare products and services just like any others.
4. Impose income tax on health insurance “benefits.”
5. Eliminate licensing requirements for all healthcare professionals and hospitals.
6. Post the outcomes record of all providers on the web.
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You’ve brought this up before, but where are you getting your information on single-payer?
The administration cost savings aren’t a surprise, but you could probably drive down compensation rates with single-payer (not just for doctors, either), if Canada’s any indication. That might, in the long run, reduce the total number of doctors out there (although since you’d have a larger population getting treated, it might even out a bit), but it would be a cost control. Or, you could take a page out of the Singaporean notebook and attach a mandatory contribution to a Health Savings Account (since we already have mandatory contributions to Medicare, you could switch that over and raise it as a percentage of income), so that the first couple thousands in medical costs are drawn from that instead of general tax revenue.
In any case, at least theoretically, it would shift the system over to one where patients were prioritized for treatment on the basis of need (that’s usually what I hear from Canadians, by the way – they mention that you might wait a bit longer for certain things if you’re not critical, but people with critical conditions get treated immediately).
No, but it would save some money, and it would simplify a lot of the bullshit that doctors have to deal with in terms of insurance companies and patient payment.
I assume you’re talking about the costs of providing care, and of introducing and using new treatments.
That helps if you have a chronic condition (as well as the funds to go around, possibly over the country, looking for a deal on providers), but it’s not so useful in, say, emergency care.
You mean like the Community Rating? That’s a possibility (although you’d have to rigorously enforce it – my guess is that a lot of companies would try to sneaky about denials), and it seems like it’s going to be part of any real health care reform that gets through.
You’d need to couple that with an individual mandate to buy health insurance, though, otherwise people will tend to avoid picking up policies until they get sick. That undermines the whole business model of insurance.
I’m pretty sure they already do.
Unless you come up with some other way of helping with the purchase of health care, all this will do is make it more expensive for individuals to get insured, and for companies to insure them.
Are you being sarcastic with this post? This would be a disaster. You’d have good doctors mixed in with countless quacks.
Who is doing the evaluations, and how are they tracking the doctors’ performance if anybody can claim to be a doctor?
Going over to a single-payer system to save on administrative costs and, once you’ve imposed a monopoly using the monopoly powers to impose cost reductions are two different arguments.
I believe we can achieve administrative cost savings by going to a single-payer system, although there are other ways. We can’t achieve cost savings. However, we can produce scarcity. That’s the history of price controls.
Brett,
You seem to be confusing health care with insurance, a common problem nowadays. I am a voluntarily uninsured person and am not speaking to insurance of any kind in my post here.
1. Force all healthcare providers to post all charges for all procedures by CPT code on the web for all to see. The AMA already promulgates a list of all medical interventions by CPT code, whether emergency, elective or chronic. Medicare maintains a list of “allowances”–what Medicare effectively pays for a covered procedure.
Unfortunately, the AMA thinks its list is its property and will release it only piecemeal on the Web. Fine. Then what the Feds need to do is come up with their own CPT code list and require it to be used in all medical billings, whether private or billed to insurance or Medicare/Medicaid.
You will not be able to find out what the Medicare “allowances” are per CPT code without filing a FOIA request. This is nonsense!
The idea here is to hide all pertinent health information from the consumer, so that he is kept fully in the dark.
You are dead wrong in saying that the CPT code and allowance are not useful in emergency care. I have twice gone to bat for friends who went to our publicly funded Brackenridge Hospital of Austin for emergency care, one for gall-bladder attack and the other for kidney-stone attack. Each was billed about $1800 for the care received. Way too much. So I filed a FOIA, found out the allowances per CPT code and wrote the hospital demanding identification of the interventions they made by CPT code as a condition of payment, same as an insurance company or Medicare would do. They refused, probably imagining a lawsuit in which it would be revealed how badly they were screwing the private payer. So Brackenridge was refused payment. They ended up writing off both bills!
By the way, the same was done with the separate radiology and lab bills in both cases and those billings were discounted to the Medicare allowance and paid. So there!
2. Disallow price discrimination so as to treat all clients the same who walk in the door.
No, I don’t mean “Community Rating.” Insurance is a religious superstition that I am not considering here. I am talking about buying health care by CPT (or ICD-9 or DRG) code just as you buy a tool from Sears, where the prices are listed on the Web, where everybody is charged the same, and where no insurance is involved, for Christ’s sake!
3. Tax all healthcare products and services just like any others.
“I’m pretty sure they already do.”
Well, I haven’t seen any 8.25% sales tax tacked onto any medical bill here in Austin.
4. Impose income tax on health insurance “benefits.â€
“Unless you come up with some other way of helping with the purchase of health care, all this will do is make it more expensive for individuals to get insured, and for companies to insure them.” Wrong. It will eventually eliminate overuse of medical tests and care and lower prices. Most importantly, it will level the playing field; as it is now, the maligned “uninsured” are carrying the burden unfairly. Do you realize that the uninsured participate in the 50% Federal subsidy of health “benefits” while underutilizing treatment themselves?
5. Eliminate licensing requirements for all healthcare professionals and hospitals.
“Are you being sarcastic with this post? This would be a disaster. You’d have good doctors mixed in with countless quacks.”
Of course I’m not being sarcastic. Read a little of Nobelist Milton Friedman if you need a tutorial in how the market solves such problems. Rearing kids is more important than health care, so I suppose you advocate licensing parents with the State setting the standards?
6. Post the outcomes record of all providers on the web.
“Who is doing the evaluations, and how are they tracking the doctors’ performance if anybody can claim to be a doctor?”
Who’s doing the evaluations is whoever the consumers pay to do them, whether Consumers’ Union or Underwriter’s Laboratories or some such. The unlicensed providers would not even need to be forced to supply that outcome information, but then, we consumers don’t have to deal with providers who don’t comply! Have you ever read Adam Smith or Free to Choose?
Just a technical note:
As a former engineer and finance guy most of my life, I’m always cautious about quality of data. So I’d be careful with blanket statements about admin costs and comparisons. Here in the US we have various insurance business models from indemnity insureres (who show low admin and high “medical loss ratios” by the design of their business model) all the way to the HMO’s who perform all kinds of admin.
Further, accounting policies differ, and sometimes admin costs are buried in medical expenses.
Given these issues, a little common sense rather than raw data observation may be in order. Does anyone really think government is a model of administrative efficiency? The empirical record – and a trip to, oh, the DMV – would suggest otherwise.
Dave,
I think a single payer system would reduce costs if we went the “full monty” to a completely nationalized system. Of course, that’s politically impossible, so we’re likely to end up with a hybrid single-payer system with most of defects of the current system along with most of the defects of a true single-payer, nationalized system.
It’s also interesting that the current narratives portray insurance companies as the evil behind the problems of healthcare, meanwhile the AMA and others go unmentioned.
How nice for your friends. That’s not so helpful if you’re the one stuck paying – are you going to say “No, that hospital charges too much for heart attack treatment – take me to the other place!” in the ambulance?
Fine, you weren’t talking about insurance, then.
What, by reducing people’s ability to get the ability to pay medical bills? That will reduce usage of medical care, but we don’t usually consider being too poor to pay for health care to be a good thing.
The market doesn’t magically eliminate quacks, particularly with imperfect information on the buyer’s side (they don’t know, for example, whether or not that doctor actually has the medical degree and training, or whether he got the degree from some type of diploma mill, or even completely faked the thing).
And for those people who don’t have regular access to the Web, or subscription to this information?
And if they’re the only people in the neighborhood, or the only affordable ones?
Brett,
Brackenridge, as a publicly funded hospital, is required to take all comers in the emergency ward and treat them until they are “stabilized,” regardless of ability to pay. I didn’t set it up that way, but since it’s the rule they need to treat all comers equally!
It will reduce medical costs by elimininating unnecessary screening tests, like those for prostate cancer and all the penny-ante flu, common cold, inoculation and physical exam testing that amount to nothing more than tuneups, oil and filter changes that should not be covered by any insurance and wouldn’t be if the “benefit” were taxed. The “demand curve” for medical care would be shifted down causing prices to fall. Econ 101.
The market doesn’t eliminate quacks but can identify them just as Consumer’s Union identifies lousy cars. Do you think the Medical Boards eliminate quacks? No way: the boards exist to protect quacks same as the Teacher’s Union does. A de-frocked fraudulent, felonious physician easily takes up a new practice in a neighboring state!
You are right that access to the Web and access to information on medical and insurance data is both important and hard to obtain, even for sophisticated searchers. But that is rule for good tools, where pricing and comparison information is freely posted on the Web and advertised on TV.
You can’t find good teachers, good lawyers or good hospitals or physicians that way because the government enforces an oligopoly and everybody has an interest in hiding the ball. At least you’re not forced to hire a lawyer or attend a lousy school (yet!) like you are forced to use the lousy overpriced USPS and, soon, lousy Obamacare.
As far as having to deal with “the only people in the neighborhood,” have you ever heard of Medical and Dental Tourism? Right there in Mazatlan you can get your dental care good and cheap; likewise for Budapest. You will pay 1/10 the US oligopoly cost for major surgery in Thailand and be treated better and faster!
It is sad to think that the only folks who will have choice under Obamacare will be legal and illegal aliens who will not be “covered.” Everybody else will be subject to rationed, delayed and inferior medicine.
What, like most Americans have the money to fly all over the place to get a better deal on treatment?
You’re questioning the need for prostrate screening? The aggressive screening campaigns are a big part of the reason why the US prostrate cancer survival rate is so high.
Sure, you could save money, but it’s not just about money – we want a health care system that works to save the most lives.
Andy,
I am an voluntarily uninsured person and do not see all those defects that you see in the current healthcare delivery system in this country. I have seen those defects in systems in Europe and South America where I have lived and worked. The medical and dental care offered in this country are the world’s best, by far.
One problem that I encounter hereis the fact that I pay taxes to cover every insured person’s healthcare. A insured rich person like Michael Dell (if he were foolish enough to carry health insurance) pays some 55% less than I do for the same care since he pays with pre-tax and pre-FICA dollars and I pay with after-tax dollars.
The other problem is that I have to search hard for physicians who do not try to screw me by charging me even more than they charge the insured for the same procedure. (Actually, the physician who treats the insured has a 40% overhead for paperwork, filing, negotiating, justifying and waiting in dealing with insurance, with the result that a private payer gets 70% of the “care” that the insured gets.)
Yesterday I called the vaunted MD Anderson Cancer Center of Houston, asking for pricing for a routine Colonoscopy under private-pay and under Medicare. Would you believe it took me a full hour in their voicemail labyrinth to get to a person who could give me that information? Of course they are embarrassed and reluctant to admit that they charge a private payer $4800 if no polyps are found. The Medicare allowance for the same procedure (they accept Medicare assignment) is $191, of which the patient’s co-pay is $38.21. So they are overcharging the private payer, who pays 24 times as much as Medicare for the SAME PROCEDURE but without the paperwork, delay in payment, or denial of payment!
I don’t know about you, but there’s NO WAY I’m gonna let sleazoids like that stick anything in my bunghole, especially while I’m not conscious!
But thank Adam Smith there are now physicians in this country who refuse to deal with insurance companies or Medicare/Medicaid and all their paperwork and who take all comers at the same price! I am painfully aware that they will either have to bend over or emigrate once Obamacare is inflicted upon the nation.
Jimbino,
That’s great you don’t see any defects. I see quite a few, the most pressing of which is that health care costs are increasing at 2-3 times inflation and, unless stopped, will eat the entire GDP of this nation. I see the problem that Dave has mentioned many time here – a lack of providers and the inability to produce more without importing them from other countries. I see an incentive system that pushes doctors to where the money is, which is not primary care. Those are just a few of the problems and the single-payer options that are politically viable don’t solve those fundamental problems.
As a result, I don’t support a single-payer system in this country because I don’t think it would solve any of the most pressing problems. I think they COULD be solved under a single payer system, but only if it represents pretty much complete nationalization which as I noted above, is in the realm of fantasy. The system you advocate is just as nonviable politically if not more so.
Personally, I don’t care what the system is since I don’t have an ideological dog in this fight. What I do care about is cost control, affordability, a safety-net, and producing enough actual health care to meet people’s needs when and where they need it.
The problem you described is not unusual. Private payers such as yourself end up subsidizing providers (ie. doctors and hospitals). Yes it’s a screwed up system, but it’s one that can be fixed without the extremes of nationalization or the market solution you support.
I support Single-Payer largely because I think it resolves the “insurance/coverage” side in terms of access – you don’t have people completely excluded from care due to inability to pay, and just as importantly, you don’t have the fear of total financial destruction if you get seriously sick even with insurance. In a sense, we already have a highly imperfect system of that for everyone (since you can’t be turned away from emergency room care on the inability to pay), and a form of that for senior citizens.
It certainly doesn’t solve problems with access to the supply of health care, but those are problems that every single health care system worldwide is struggling with – as Dave has pointed out earlier, all of them are struggling with issues of rising costs (even if those costs aren’t as high as the US’s) and how to incorporate innovation and technology into the system.
By “single-payer”, I mean “single-payer universal health insurance”. Universal health insurance, basically. Not nationalization on the supply side.
There’s the Singaporean system. Universal catastrophic insurance and coverage of the most expensive treatments, mandatory contributions to the equivalent of a Health Savings Account (to be used to cover costs), and cost controls on hospitals and doctors.
That would help keep costs down (since at least the first part of treatment would come out of people’s stored income), and clear up issues over who gets what treatment (since you could have it clearly stated what treatments will be covered by the government, and what aren’t).
Yeah great Brett.
Question: Where does the fully covered Singaporean find the best Singaporean doctors?
Answer: In the USA! Where his vaunted Singaporean health insurance is useless. No competent professional puts up with cost controls.
You think medical care is expensive now; wait till its “free.”
You think we have a shortage of GPs now; wait till we start putting cost controls on them!
Physicians are now advising their kids to steer clear of medicine and if they won’t, at to least master a foreign tongue so they can get the hell out of the USSA and go to some country where their efforts will be rewarded.
Do you have any proof of this, other than your say-so?
There are multiple governmental systems out there, ranging from the NHS in Great Britain, to the French System, to the Singaporean, and to the German (the French and German systems, by the way, beat the US in most metrics). I notice that all of them are cheaper.
Do you have anything other than pointless litanies?
Canada actually had around 32,784 general practitioners in 2007 for a population around 32,927,400, meaning a rate of around 1 general practitioner for every 1004 people. The United States had around 255,732 general practitioners in 2006, for a population of 299, 398, 484, meaning a rate of around 1 GP for 1,170 Americans. Looks like the Canadians are in no hurry to meet your slogan.
Of course, you would have known this, had you bothered to actually spend the five minutes to google it as opposed to simply regurgitating, word-for-word, some idiotic conservative slogans.