Chris Pope concludes his post at City Journal on our healthcare systems like this:
The United States cannot solve its health-care challenges by adopting one or another country’s health-care system wholesale. But it could avoid lots of heartache by better aligning its four principal health-care systems. In recent decades, the Netherlands and Germany have sought to break down barriers between employer-sponsored insurance and individual coverage. The United States should do something similar.
I’ve said it before. We have an employer-based healthcare system larger than Germany’s, a single-payer system (Medicaid) larger than Canada’s, and a “dual payer” system like France’s or Australia (Medicare) larger than both of those systems put together. Needless to say our tightly regulated individual insurance system (PPACA) is larger than Switzerland’s by an order of magnitude. We even have a fully socialized system like National Health in the system of the Bureau of Indian Affairs although it is significantly smaller than BNH.
I agree that we need reform but I find it farfetched that uniting our healthcare systems under any single system will result in cost savings until and unless the Congress is willing to limit that system which it has shown little inclination to do. The burden of proof is on anybody who thinks that just scaling up any of these systems will inherently result in cost savings.
Practically no one would like the way I would reform our healthcare systems so I won’t even bother to outline it. Suffice it to say that the focus would be on public goods (non-excludable and non-rivalrous) and, consequently, would be limited to public health.
And then there is the VA.
Your point is not enough considered – scale and social cohesion matter when it comes to policy, not to mention politics.
Thank you. The VA counts as “fully socialized”, too, doesn’t it? Nonetheless, it’s still smaller than BNH.
There are several things I’m emphasizing here:
– we are not completely without experience with other healthcare systems
– we’re big and lacking in social cohesion
– the evidence either for economies of scale or economies through uniformity is scant
There’s actually one more point I didn’t work into this post. The market clearing price of healthcare in the U. S. is at least a third lower than what we are presently spending. That’s an argument against both poles of policy preferences.
The VA is a bit of a hybrid – if you have other insurance, the VA will charge that insurance for care, so they are an “insurer” of last resort for a lot of stuff and don’t cover everything (The exception is 100% disabled vets, who get everything for free), but they do provide a lot of basic stuff at a low cost because they provide a lot of direct care.
Many people who advocate strongly for socialized insurance or even an NHS-style socialized system, argue that as a monopoly, the government can set prices and make it more in line with other countries. You see this argument also with Medicare being able to “negotiate” drug prices.
But the problem with this argument is obvious – the government has not forced down prices in any other domain. Defense is also a government monopoly – why isn’t the federal government setting fiat pricing or “negotiating” better on F-35’s so we can get more of them? Handing total control of paying for medical care to the federal government will see the same problem without significant reforms and checks-and-balances.
Tanks are actually a better example. If we want to produce tanks, we’ve got to be willing to pay companies to produce them. There is no private market. You don’t see General Dynamics selling batches of tanks to Hertz Rent-a-Tank. Healthcare is sort of “fungible”. We don’t have one sort of healthcare for veterans, another for the poor, and another for the rich. Yes, there are differences based on willingness to pay but the same docs can move between systems.
One of the basic problems with our healthcare “system” is our resistance to having completely different classes of medicine.
Tanks work too – the point is that if you make the government the sole buyer of tanks (or health care,) that won’t magically reduce costs. The various medical lobbies are just as powerful as defense lobbies.
No kidding. It’s not an accident or a law of nature that Medicare is presently paying around $140,000/year for each medical resident. That was part of the price the AMA extracted for not opposing Medicare in the first place.
My point was that if you control the costs on tanks enough, we’ll stop producing tanks. If we control costs in Medicare, we won’t stop having healthcare.
On the point of comparison. When comparing the US to Europe, the right comparison is not the US to an individual country in Europe — it is the US to the EU.
The EU has 26 health care systems; and I don’t think anyone has suggested an EU wide health care system. European efforts has been on pooling efforts where their is scale, like purchase orders for vaccines. AFAIK, the easy pickings on scale at the Federal level have already been implemented in the US (i.e. operation warp speed, FDA, NIH, CDC, etc).
The more privatized that medical care is the more it costs. That has been universal. Singapore tried to go to a heavily privatized system but gave up when costs increased too much. Is there any guarantee costs would go down under one system? No, but we already have the costliest care and the costliest part of our costly care is the private part of the system. Medicare typically pays 20%-30% less than private carriers for the same care. So while I still think based upon what we have seen work in the rest of the world, we would be better off with everyone in a single system. I am pretty agnostic about what kind. If we arent going to do that then maybe we just eliminate the highest cost part of the system.
So going to one system by eliminating private insurance would along decrease overall spending.
Steve
“So going to one system by eliminating private insurance would along decrease overall spending. ”
That’s assuming that the 20-30% less costly figure is an accurate apples-to-apple comparison and that medical professionals (and their lobbyists) will be fine only being compensated by Medicare at Medicare rates.
Given how Congress works, I’m not confident that costs won’t explode unless some serious controls are built in. This is a big deal because medical spending is 1/6th of the total economy, and that’s a lot to give to our political system.
So I like the idea of some kind of universal coverage, but I want to see the details about how cost controls would work in practice.
And lets not forget the Federally Qualified Health Centers which provide seed money (and higher medicaid/medicare payments) for a complete clinic including dental.
With the existing programs you could cobble something together but, folks would rather grandstand then select the next rant on the rolodex.
Its not just medical professionals. Its for facilities, devices, medications, everything. However, if medicine is able to refuse cost control measures why are we even talking about this? We are stuck with higher costs. This is something I hear pretty often from people who prefer a more market oriented approach, as though hospitals will be glad to take 25% cuts because they were market derived.
We arent going to get better control of costs until everything is on the table and we decide it is serious issue. It will probably work best if we try to do it gradually.
Steve
Was scanning some old stuff. Medicare has capped insulin at $35/month. People on private insurance can pay 10 times that. The pharma industry has been engaged in ever greening of the patents. They have every incentive to do that with the rewards of having multiple systems.
https://www.hopkinsmedicine.org/news/media/releases/why_people_with_diabetes_cant_buy_generic_insulin#:~:text=A%20University%20of%20Toronto%20medical,it%20and%20patent%20any%20improvements.
Drug companies have made incremental improvements that kept insulin under patent for more than 90 years.
Insulin can cost $120 to $400 per month for patients with no prescription drug coverage.
Many patients with diabetes have lapses in medication that can lead to serious complications requiring hospitalization.
A generic version of insulin, the lifesaving diabetes drug used by 6 million people in the United States, has never been available in this country because drug companies have made incremental improvements that kept insulin under patent from 1923 to 2014. As a result, say two Johns Hopkins internist-researchers, many who need insulin to control diabetes can’t afford it, and some end up hospitalized with life-threatening complications, such as kidney failure and diabetic coma.
Steve
You don’t need to turn over all medical financing to the government to solve the very real problem of insulin costs.
” Its for facilities, devices, medications, everything. However, if medicine is able to refuse cost control measures why are we even talking about this? ”
The question is whether or not Congress will force cost control under single-payer or not. They’ve yet to enforce cost control when given the opportunity, and we all know how powerful industry lobbying can be.
This is why I reject hand-wavy arguments that single-payer would inevitably reduce costs. There’s little evidence Congress will make the difficult political choice to reduce the income and profits of the medical industry. Again, this is 1/6th of the economy we’re talking about, and the entrenched interests will do everything they can to ensure Congress under a single-payer system doesn’t institute cost control. It might be OK if Congress could hold the line on cost growth, but they’ve failed completely at that too.
I REALLY like the idea of single-payer. I’ve been a beneficiary of Tricare for a very long time and while it has issues, I like it a lot. And it’s essentially single-payer although everyone except active duty has copays and/or enrollment fees.
But Tricare isn’t a cheap program and it has the advantage of leveraging uniformed medical personnel. It’s also not a representative cohort. It’s not clear it could be scaled, and even there, Tricare only attempts to keep cost growth at or below the national average for civilian health plans.