Kudos to Jonathan for his important new book.

One of the reasons we are talking about what's the right approach -- or the most politically feasible approach -- to insuring all Americans is that millions of Americans are telling pollsters and politicians that the health care system is in crisis. The public has put this issue on the table for the political system -- not the policy wonks.

Individuals, like those profiled in Sick, experience the health care crisis in many ways. But is there a explanatory diagnosis for why the health care system is not serving them?

Perhaps some people think the problem is not enough careful tinkering with the system we have. But increasingly, the diagnosis that makes the most sense will focus on the structural failures of the private health insurance industry. If insurance companies make their profits by denying care, refusing to cover people who are expensive, spending more money on advertising than they do on wellness, and just passing along increased health costs -- then the public may decide that tinkering with the private health insurance system (and subsidizing and regulating them to do what their business plan doesn't allow them to do) is not the way to go.

So I'm betting that the public, making the diagnosis that the private insurance industry is a key part of the problem, is unlikely to be impressed by tinkering. And many experts and commentators (who do think in their heart-of-hearts that single payer is the way to go) may be surprised that the public won't see "regional buying pools" and individual mandates as giving them the kinds of guaranteed coverage the system doesn't currently offer.

This promises to be an exciting discussion. Many of us who think single-payer is the right direction have thought long and hard about step-by-step ways to get there. Jacob Hacker's plan, recently published by EPI, is structured to allow lots of choise -- including ways to let Harry and Louise keep the private health plans they now have if they like them.  But the big question is the one Jonathan asks here:  will tinkering, even at an ambitious scale, get us a health care system that covers everyone, affordably, and with the kinds of structural arrangements that can begin the reorganization of the health care system to control the spiralling health care costs our economy is now facing?

Roger Hickey, Campaign for America's Future www.ourfuture.org

The insurers are currently the main problem. It's an industry whose business model requires sloughing off patients and the unhealthy, i.e. the very people who need medical care. The whole industry is based on NOT providing the service it sells. Insane.

Government should NOT waste money subsidizing these leeches through hybrid plans or any other way. That'll just make the problem worse.

Single-payer may have problems, but none of them have to be as bad as giving money to the source of our current medical care fiasco!

Thanks for having this important discussion. I have a few points.

1) Can we distinguish "insurance" from just giving people money? "Insurance" in the classical sense means that a client pays the insurer slightly more than their average, "expected" cost in exchange for insuring that you won't get cleaned out if something horrible and unexpected happens.

But this model has nothing to do with health care as a right. If someone has cancer, we tend to say they have a right to care (or, if care is really scarce, they have a right to a fair shot at care). But if we *know* they have cancer, then their expected costs are wildly high. So classical insurance alone is not sufficient here. I think it muddies the waters to call single-payer "insurance."

2) The problem with "health care as a right" is that society is basically setting infinite utility on purchasing medical goods and services. That's what a "right" is-- something that trumps everything else, especially economic things. Thus, costs will increase without bound.

Please explain why the incentives do not push heavily in this direction.

3) Why not try to set up an incentive scheme where

(a) There are many private health providers, who can charge whatever they want. But they are not *insuring* anything, they just bundle together some services and sell it to individuals. You could call them "health bundlers" or something.
(b) People buy this bundle or that bundle or whatever else, in a free market.
(c) The government reimburses each individual, in such a way that the more expensive your plan is, the more you have to pay out of pocket, even though the government still helps you out.

Basically, this is a cost control mechanism. The insurance overhead goes away because insurance is no longer a part of health care, and seemingly there is some downward pressure on health care prices because consumers have incentive to pick a cheaper plan.

I haven't read your book but I have recently experienced the health care system first hand.  It is horrible, even with good insurance -- or maybe because of it.  There is something more fundamentally wrong with the current health care model than how it is financed but I don't think that can be fixed until we get past the current health care choice so many now face:  your money or your life.

I favor the single-payer plan as you describe it.  It will be the easiest to sell to the general public because it is what many, many people are already familiar with: Medicare for basic coverage; private insurers for supplemental; anything left to be covered by the individual.  This is what most seniors I know have. They and at least one of their children know how it works. It may not be perfect but it is a good place to begin the conversation.

As a somewhat flip aside, maybe we should just kick this can down the road until behavioral economics has developed to the point where we understand how humans make moral calculations.

It would seem that a large part of the problem here is that we want "merely monetary" health care issues to be trumped by the moral issues. But if you do that straightforwardly by calling health care a right, it leads to setting infinite utility on health care services, which means all of society should drop whatever they are doing TODAY and go work in the health care industry.

I doubt that's actually what people want. Instead, perhaps we should come to a deeper understanding of how we value health care, and how much it would be efficient to value health care.

Nancy Irving

Here's something I wish you'd address:

In an earlier piece/post of yours (I forget where I saw it) you repeated a standard argument in favor of universal coverage, namely that we get worse health outcomes and higher costs than the other industrial democracies (all of which have universal coverage) because of the millions who put off care until they face emergencies.

I worry though that this is exactly the wrong argument to make, if we are to convince the middle-class voters who will decide what in fact is to be done.

This is because middle-class voters, most of whom have some kind of employer-based coverage now, don't really care what the average outcome is.

Worse, many of those now covered privately believe that our outcomes compare poorly with, say, France's only because all our poor people, with their "pathologies" and "bad habits," pull down our average health statistics.

These people--who will, I repeat, decide the matter--are apt to believe that if you look *only* at our middle- and upper-class folk, our health outcomes in the U.S. are *much better* than in, say, France. And thus, they believe that universal care, while it might be better *on average*, will really only improve health outcomes for the poor, *while worsening outcomes for themselves*.

I would like to know what the statistics show. Is this feeling on the part of the middle class based in fact?

I don't know. But if it is *not* based in fact--if outcomes for even those now covered by private insurance would be improved under universal coverage--this needs to be said, and loudly, because self-interest, not altruism, is what will decide this issue.

Thanks.

=== We are trying to get people who can't afford it health care, though a proper system of insurance or reimbursement ===

That is how the "compromise" position is being framed, yes, and presumably once it is on the table the Democrats will be forced even farther toward the Radical Right's preference. Personally I would like to hear more about the German system, where every legal resident gets the same solid (not basic) level of care through a single payment mechanism (not a single provider), and the very well-off are still free to buy more if they wish. I don't think the opening round should be just the 40 million currently with zero regular care.

sPh

To recap, the reasons for rejecting politically calculated half-measures are:
1. It's wrong to even consider it. ("discussion ... ought to start with ... which policy would actually work best)"
2. It's wrong to even consider it. ("its analysis becomes self-fulfilling")
3. SP might scare opponents into adopting half-measures.

There's no acknowledgement of the arguable merits of political calculation ... and no recognition that political calculation could be anything but an out-of-hand rejection of SP. This strikes me as unpersuasive, and embarrassingly tendentious.

You are right. Buying a bundle of health services will include buying some stuff you may not use, so the "health bundling" company will want to estimate your likelihood of using each of the different services, so they can give you an accurate price for the bundled plan. So insurance is a part of the picture, unlike what I said.

The "insurance" companies could be separate from the "health bundlers"-- there could be a few companies that focus on predicting the cost of taking individual A into health plan B. I'm not sure whether this would be more or less efficient than if the bundlers/insurance companies were the same. Conceivably it could be better, if it led to fewer duplications of effort in predicting costs.

(Insurance *would* go away if the government decided to pay 100% of people's health care costs, no matter what plan the individual opts for. But the scenario I described is not that scenario.)

I believe that the problem with healthcare in America is the all-consuming profit motive. These days the hospitals, insurance companies, drug companies, doctor's groups, etc all want to make a profit. There is no sense of the communal good in any of this.
Imagine for a moment that your local fire department had to make a profit. How would they do this? Would they charge for service? Hire fewer firemen? Use cheaper equipment? And how would this benefit the community? How would it affect you? etc. etc.
For myself, I have experienced healthcare in other countries--including serious surgeries--and I guarentee that the U.S. DOES NOT have the best healthcare available! That is the first big myth in all of these discussions. Healthcare here is defined by whether you have insurance, and if so what your insurance will pay for.
I don't like the idea of mandating insurance coverage (as auto and homeowners insurance is now mandated), since I believe that insurance coverage often gets in the way of getting the care you need. We have this lovely myth that our healthcare decisions are made by ourselves and our doctors, but in reality the decisions are mostly made by insurance clerks who know nothing of our situation and can approve or deny a course of treatment.
Furthermore, although my doctor was initially surprised, he now knows that I will not take any medicine that is advertized on TV. I figure that if they have to spend many millions of dollars convincing you to use their product, you probably do not need their product. Also all that advertizing increases the cost of their product.
Anyway, I am in favor of single payer universal care, and believe that if we were all covered, we could chose (there is your "choice", conservatives!)to go to a doctor or not without having to factor in how much money we have (or don't have) at the moment.

I'm not sure whether this would be more or less efficient than if the bundlers/insurance companies were the same. Conceivably it could be better, if it led to fewer duplications of effort in predicting costs.

In reality I think most people could afford to pay for their routine care on a fee-for-service basis, leaving insurance companies to cover only unaffordable, unexpected expenses.. The question is whether a large number of customers purchasing routine care would drive costs down or whether there would still be a need for bundling companies to serve as an intermediary between customers and health care providers.

Although I agree with much of Mr. Cohn's case, I think he misses something important, in not distinguishing between markets, and that was the original idea behind single-payer.

There is a health insurance market, but there is a separate health care provider market. Affecting the health insurance market by creating a single payer relates to competition only in that market - and it need not, by the way, entirely eliminate such competition.
It may be that the only way to foster natural and fair competition in the insurer market is to introduce a single payer. Individual consumers of health care services can't be all that choosy, so insurers (if they are even involved) have a "competitive" advantage. The introduction of a single payer can provide that element of choice into both markets, especially the insurer market, where the current situation of big insurer/individual consumer does not.

But independently of the insurer market, there both can and should still be competition in the health care provider market. I hope Mr. Cohn isn't missing (or ignoring) that very important point.

The single payer model is potentially a rich model. I would suggest that even if the debate assumes a single payer element or aspect, there is still plenty of room for discussion. What doesn't serve rationality in the debate, however, is to assume single payer can only be this or only be that, only to be able to dismiss the whole model for ideological reasons.

It is often said that 30% of health insurance premiums go not to providers but to the administrative overhead and net profits of the  insurance companies.

Does anybody know how many dollars this administrative overhead saves the system by preventing unnecessary medical procedures, compelling the use of cheaper drugs, acting as a drug on escalating hospital and physician fees, etc.?

If there are gains to the system, the 30% figure may not be quite as high as it might, at first, appear to be. 

NO. They can have a say in what they will pay for, but they should NOT be the deciding factor in what treatment is provided.

Sorry, that’s just not reality. Even a benign government will limit how much they will spend on you if they are unable to raise taxes or borrow anymore and there is demand by other people for other free services that they need to meet.