And now, I will pretend to oppose single-payer...
Matthew’s post seems to be the most controversial, so let jump right in there. He suggests that, contrary to what most of us have been saying,
I am not sure that there's actually a real difference between a pure single-payer system, and market-based competition within social insurance … once everybody is in some type of social insurance pool with some level of progressive taxation and cross subsidy, then how we actually organize the provision and the reimbursement of care does not much matter.
I guess I am not so sure about what Matthew says. ...
As Diane has pointed out, “Private health insurers will always be in the business of avoiding risk since their ultimate goal will always be to turn a profit; and, the easiest way for them to make money is to steer clear of providing coverage to people who are sick and need costly services.”
Matt, of course, knows this. (He’s one of the people who taught me how they do it!) And I think he also knows that trying to regulate such practices out of existence is much easier said than done. That’s why (well, part of why) single-payer to me seems like the better option.
But I also think it’s important to be clear-eyed about single-payer. And since we’ve all been talking about the virtues of single-payer, let’s look at some of the more valid objections – even though they are not typically the ones that dominate the debate.
One is about setting prices. In a single-payer system, the government plays a much more direct role in setting prices. This raises fairness issues. If doctors and hospitals think a particular insurer isn’t paying enough, they can demand higher reimbursements and, failing that, simply refuse to see that insurer’s patients. But if they think the government isn’t paying enough, they really have no such option.
There are also efficiency questions: Will the government allocate its dollars – whether through price-setting or some sort of global budgeting – in a way that maximizes the public interest? You don’t have to be a card-carrying libertarian to believe that, as a general rule, the market probably sets prices better than the government will.
Then again, the general rules of economics frequently don’t apply to health care. That’s the whole premise of universal health care. Maggie – whose own book on health care, by the way, has also received rave reviews – makes this point well in her post, noting that the current system fosters all sorts of excessive use of medical care.
Her point, if I understand her, is that government would ultimately do a better job of allocating resources. And I mostly agree, in part because of the evidence abroad, although I’d be dishonest if I said I was 100 percent sure about this.
Another legitimate concern, it seems to me, is choice. I’ve said many times that a single-payer system would promote the kinds of choices American value most: Choice of doctors, hospitals, and treatment. And I stand by that. But a single-payer system, depending on its design, can cut down on a different kind of choice: Choice of financial exposure.
If it’s really one-size fits all, then everybody bears the same level of risk. Yet some people like to take more risks than others. Is it fair to make them subsidize those who disagree?
This is, of course, the reason the right not only opposes universal health insurance, but favors high-deductible insurance that transfers more risk to individuals. Needless to say, I wouldn’t go nearly that far – because, once you do, you’ve transferred the financial burden of illness away from the healthy back onto the sick, which is the opposite of what insurance – or, at least, social insurance – should do. But I’m willing to concede that people ought to have some freedom to choose their levels of exposure.
Fortunately, there’s an easy way to solve this without simply going for high deductibles everywhere. You build a system looks like Medicare or the French system: You have government provide a floor of coverage – preferably a pretty high floor – then let people purchase private supplemental insurance to fill in the cost-sharing gaps as they prefer. (You’d also have government-provided supplemental insurance for those too poor to buy it.)
That wouldn’t eliminate the problem of private insurance gaming the system, but it would mitigate it substantially. At the same time, it would leave some more room for individual preferences about risk.
(Note: I’m very curious to hear about Jason Furman’s new health care proposal – which he unveiled a few days ago but which I haven’t had a chance to examine. Ezra will apparently be writing about for the Prospect, soon, so maybe we’ll find out then.)
The other legitimate concern to me is disruption. Health care is one-sixth of our economy. That is a lot of dollars and a lot of jobs to move around – and a lot of insurance arrangements to change. No matter how bad the system seems now, such a massive transformation is bound to cause some difficulty.
Remember, you have an entire infrastructure dedicated to dealing with our private insurance system – from the armies of benefit consultants that companies employ to the minions of billing specialists that work for doctors and hospitals.
This infrastructure is a huge source of waste. But it’s also a source of paychecks. What happens to these people? And how quickly can we build a new one in its place? Again, I don’t think these concerns undermine the case for single-payer. But I do think we should take them seriously and come up with ways of addressing them.
I was going to say more about politics – but I think this post has gone on long enough. So I’ll be back soon with where I differ (somewhat) with single-payer advocates. (Hint: I agree with a lot of what Mark and Jacob have said.)
There are also major interests -- employers, organized labor, non-organized labor, government jurisdictions and programs -- that have invested decades in hammering out quid pro quo arrangements and public choice agreements, all of which would be torn up and thrown out by an abrupt adoption of SP.
It is unlikely that all of these stakeholders would watch their stakes being pulled out of the ground, and go quietly.
April 12, 2007 10:36 AM | Reply | Permalink
Jon--
You're absolutely right that s shift to a not-for-profit system would be disruptive. But
Hohn Conyer's bill (HR 676--the basic template for a single payer plan,recognizes this. Under 676
"the conversion to a not-for-profit health care system will take place over a 15 year period. U.S. treasury bonds will be sold to compensate investor-owned providers for the actual appraised value of converted facilities used in the delivery of care; payment will not be made for loss of business profits. Health insurance companies could be sub-contracted out to handle reimbursements."
Conybers bill has 78 co-sponsers and much union endorsement. See a good brief summary at http://www.house.gov/conyers/news_hr676_2.htm.
April 12, 2007 10:39 AM | Reply | Permalink
Well, I think you leave out one very important objection to single-payer (maybe not a deal-breaker, but an objection that requires a substantive answer).
The big problem of our current system is that the insured (large numbers of them, anyway) get very lavish healthcare from their coverage, while the uninsured or underinsured get squat. Which leaves you with a system that doesn't produce very good outcomes, both because the 2nd group is undertreated, and because the 1st group receives a lot of "supply-sensitive" care that they don't need (Wennberg's Dartmouth Atlas work is THE source on this topic), yet which is still extremely expensive because so many of the insured have access to expensive, cutting-edge technologies and treatments.
The objection is this: given this situation, universal coverage pushes everyone in the 2nd group into the insured group. While the previously uninsured and underinsured will doubtless receive better care, this scheme is likely to be unbearably expensive. In systems like Canada or the UK, the historical corrective to this problem has been to create a queue for access to extremely specialized services by consolidating them in a few regional tertiary care centers. This corrective isn't available to us in the U.S., however - due to the legacy of Hill-Burton, hospitals are everywhere in our country, and people with coverage can get access to highly specialized services without much difficulty.
Not to rain on the usual parade of health policy discussion on this site, but I do think that any sensible universal-coverage proposal needs to address this.
April 12, 2007 12:11 PM | Reply | Permalink
do a Google news search (+NHS+survey)
A new survey of British doctors excoriate the NHS of Britain. It's a cautionary tale -- health care is difficult to get right no matter what system you have.
The question is does the current system need radical reform or demolition? in other words if we could keep the current system, but force insurers to cover "pre-existing conditions", while the government steps in to assume some of their risks, and greatly increasing grants to hospitals and clinics. Would that fix the problem without dismantling the entire system from the ground up?
April 12, 2007 12:16 PM | Reply | Permalink
Jonathan
Quick question?
Is it fair... Is it fair to pay ... taxes? Is it fair to pay... for public transportation? Is it fair to pay for... parks. Is it in the "public interest"? Isn't that the question? Public parks, public transprtation and "public" single-payer; a case could be made that it is in the public's interest to fund all of these. Is it fair to for my tax money to go for parks -- if I "hate" parks.
I hope I didn't go down the wrong path here because I have not followed all the discussions.
Stephen from Minneapolis
April 12, 2007 12:16 PM | Reply | Permalink
I'm impressed by the reasoning and the conclusion about a high floor. If government sets prices beyond that, there could even be a benefit to those on the right who now decry such control: under a Bush administration, they'd simply reward procedures that kicked money to their richest contributors. When Halliburton gets into stents, we'd be doomed. (The English system has advantages, too, but then in England democracy is more contentious and, well, sometimes more democratic.) But I think Jon has a recipe for single-payer that works.
John
http://www.haberarts.com/
April 12, 2007 1:31 PM | Reply | Permalink
The insured in the USA get luxurious (i.e., very expensive) care. But is it good, convinient and timely care?
A recent study showed that that the insured poor in England get better care and have better outcomes than the insured wealthy in this country (British doctors and patients' complaints and general unhappiness with the defects of their system notwithstanding).
When I took a friend to the emergency room (it was a Sunday) for an accute infection, she mentioned that she had tickets to fly to England the next day and were there any contraindications to traveling. The doctor replied, "Go, by all means, if anything happens and there are complications, you'll get better care there than you will here."
April 12, 2007 1:46 PM | Reply | Permalink
I've wondered what effect a single-payer system will have on other types of insurance premiums. For example, my auto insurance includes coverage for medical payments, my homeowners' liability insurance factors in possible medical bills as does the face amount of my life insurance. If everyone's medical expenses are covered or at least significantly reduced by a single-payer plan, how much will the need for other types of insurance be reduced? What about malpractice insurance? How many small insurance agencies may fold? What will trial lawyers do?
April 12, 2007 2:07 PM | Reply | Permalink
It's important to understand that single-payer does NOT have to mean a system like the British NHS. The thing that makes the NHS unique is that not only does the government pay for health care. They also own the healthcare system. That is, most members of the healthcare profession in Britain are for all intents and purposes government employees. Most doctors in private practice are also in the NHS. Most hospitals are owned by NHS trusts. That is a far cry from the system in most other countries that have single-payer. Doctor dissatisfaction with the NHS is almost certainly a function of this ponderous ownership structure and less to do with the fact that it's single-payer.
It is impossible to imagine a system like the NHS in the US.
April 12, 2007 2:13 PM | Reply | Permalink
Jon- I'm sorry. I don't buy this logic? We cannot afford to waste health care dollars.
These displaced workers can transfer their skills to other sectors.
Also I hate to spoil the fun but in this whole blog-post and comments there is almost nothing discussed on the grandaddy problem of them all ahead-Compassionate and Ethical Cost Reduction.
A treatment based disease care system is NOT economically sustainable
Please prove me wrong on that latter statement?
Thanks,
Dr.Rick Lippin
Southampton,Pa
http://medicalcrises.blogspot.com
April 12, 2007 2:24 PM | Reply | Permalink
This is utterly at odds with the experiences of both me and my family.
There is perhaps one area where the standard of care in the UK is better than in the US and that is in prenatal, childbirth and postnatal care. My wife gave birth to two kids in London and one in New York. In London, she got two days in the hospital for one delivery that was relatively uncomplicated and three days for one that had some complications (although not serious ones). In the US, she got one day. More important, there were TWELVE DAYS of home visits after she came home by a midwife/nurse, which was absolutely invaluable. Needless to say, that sort of thing barely exists at all in this country.
But in virtually all other areas, the general standard of care is comparable or lower, especially in the treatment of chronic disease, like cancer or diabetes. The virtues of the British system are that it is supremely more efficient and cheap than the American system. The childbirth examples are instructive. My second son was delivered by a single midwife, who merely called in a doctor right after the delivery to do a quick check of the baby. In the US, there were THREE doctors in the delivery room: an obstetrician, an anesthesiologist and a neo-natologist. All because there was ONE slightly elevated risk factor that turned out to be nothing.
Overall, the UK spends about half of what we do for health outcomes that, in the aggregate, are comparable or better. So how can outcomes be better than the US while the standard of care is generally worse? Surely it has to do with the greater emphasis on preventive care. Access to a general practitioner is easy and of course free. But there are many other factors at work as well.
April 12, 2007 2:47 PM | Reply | Permalink
"These displaced workers can transfer their skills to other sectors."
Now I'm sure that you're really a physician!
The logic of the point is that we're talking about millions of people whose livelihoods are tied into the system as it exists now, and much of their knowledge and skills are specific to it. Moreover, many of these people live in towns and cities that are not as economically vibrant as we'd like, and having their employer liquidated would be a tremendous burden. Assuming that millions of people can transfer seamlessly into equivalent work elsewhere is, at the least, an intellectually lazy argument.
More to the point, what politician is going to vote for a plan (that might or might not work) that could potentially cost hundreds or thousands of jobs in his/her state/district?
April 12, 2007 2:55 PM | Reply | Permalink
April 12, 2007 4:51 PM | Reply | Permalink
Displaced workers will be taken care of by being offered positions, and new training as needed, to have gainful employment within the new single payer universal coverage system. And they'll actually get to do jobs that help people!!
We need folks who can triage calls, organize health promotion sessions, do community outreach, all kinds of jobs that will be needed for the new focus on HEALTH rather than the current focus on treatment of disease.
Of course it will not be an easy task, but none of this easy. It will be the right thing to do.
April 12, 2007 5:56 PM | Reply | Permalink
government price-setting won't work here, but let's consider our agricultural policies. The government doesn't set prices, but the huge subsidies they dole out keep food prices low for everyone. So, would the same logic apply to health care?
April 12, 2007 6:21 PM | Reply | Permalink
That's a bogus argument. You're making it sound like a highly disruptive, and zero sum game.
As others point out, nobody is arguing for overnight complete reorientation of health care.
Even in the most extreme and totally unlikely hypothetical, imagine all health care was nationalized tomorrow like Venezuela or such, those people would still have jobs during a transition period, and could also transition into providing real services, as opposed to paper churn and waste, like additional health care to patients for example.
Realistically the changes will take place over a period long enough for people to transition.
Nurses and medical assistants will be able to do less paperwork and more care. Paper pushers and marketing people made obsolete by efficiency can transition into other industries that will themselves have more capital to spend for rational products, as they're spending less on medical waste.
April 12, 2007 7:34 PM | Reply | Permalink
"access is easy" -- that says it in a nutshell.
April 12, 2007 8:13 PM | Reply | Permalink
The government has been setting prices since the 1960s. Medicare and Medicaid are the leading indicators of prices. Until health insurers decided, in the late 1980s to pay LESS than Medicare, what Medicare paid, everyone paid (except Medicaid). So, what is the big deal with government setting prices?
If elites (health care providers) have no access to an alternative price mechanism, then they will have to be price takers. This could BECOME a way to slow down medical care inflation, for godsake. Doesn't seem like a bad idea to me.
On the other hand, due to the easy manipulation of price setting through political influence, I am not convinced that government price setting WILL slow down medical care inflation. There needs to be a "firewall" between government price setting and electoral politics.
As to retaining a role for private health insurance companies. I cannot think of any good reason. Let 'em wither and die. People are very poor judges of how much risk they can bear, so best for public policy to make that decision.
April 12, 2007 11:32 PM | Reply | Permalink
Re: The objection is this: given this situation, universal coverage pushes everyone in the 2nd group into the insured group. While the previously uninsured and underinsured will doubtless receive better care, this scheme is likely to be unbearably expensive.
The majority of the uninsured are young and healthy people. They will be net payors, not net consumers. I doubt we will see some huge increase in costs. Note that Medicare and Medicaid, despite having an older and sicker user base, are still cheaper per capita than most private insurance pools
April 13, 2007 5:55 AM | Reply | Permalink
There will be few displaced workers outside the marketing departments and the executive offices. The work the insurance industry "grunts" do will still be necessary even in single payor. With more people covered there may even be more work to be done
April 13, 2007 5:58 AM | Reply | Permalink
Many single payer proponents promise spectacular reduction in health care costs due to elimination of inefficiencies. It seems to me that means fewer employees or lower pay for them.
April 13, 2007 6:34 AM | Reply | Permalink
Re: your specific example, neonatal care in the US is heavily slanted towards NICUs, because they're such money-makers for a medical group, even though there's not much evidence that you get healthier infants by emphasizing them.
April 13, 2007 8:48 AM | Reply | Permalink
I had great medical care when I worked for the US Congress: US Army nurses and doctors right there in the Rayburn Building.
My eldest daughter was born in Japan, and the attending obstetrician was kindly supplied by the aircraft carrier Enterprise, The Big E, which used to be home-based in Yokosuka.
All anybody should want, seems to me, is the same sort of medical care that anybody gets from the military.
Do we ask our soldiers and Marines for their HMO papers when they need bandaging up?
April 13, 2007 8:53 AM | Reply | Permalink
"The other legitimate concern to me is disruption. Health care is one-sixth of our economy. That is a lot of dollars and a lot of jobs to move around – and a lot of insurance arrangements to change. No matter how bad the system seems now, such a massive transformation is bound to cause some difficulty.
"Remember, you have an entire infrastructure dedicated to dealing with our private insurance system – from the armies of benefit consultants that companies employ to the minions of billing specialists that work for doctors and hospitals."
Right. So you pass the Edwards plan, which lets folks gradually transfer into a Medicare-type "floor" system of their own accord, letting private insurance as folks' primary insurance slowly wither on the vine.
Voila!
Next problem?
April 13, 2007 8:55 AM | Reply | Permalink
Well, the uninsured are a pretty heterogeneous group, and the underinsured are even more so, and you're assuming that people will only use the health care they need (even when the empirical evidence suggests otherwise). Remember that health services are rival goods, and that a principal complaint about the current system is the runaway inflation in costs - universal coverage will have the effect of vastly increasing demand for goods we already think are too expensive.
April 13, 2007 8:57 AM | Reply | Permalink
I appreciate the sentiment, but if this is a serious discussion I do think any universal-coverage proposal has to be realistic about the political climate and what we can reasonably expect from the people who would be tasked with signing it into law. Otherwise this is an academic exercise and nothing more.
April 13, 2007 9:01 AM | Reply | Permalink
Is it fair to tax me for the roads I don't drive on? (Someone said) "the cost of civilization is taxes."
Jack Lohman
April 13, 2007 9:42 AM | Reply | Permalink
Fax machines displaced FedEx, and email displaced Fax machines, but they all adjusted and we've live happily thereafter. (Sort of.)
Some displaced workers (brokers who draw commissions, high-paid executives) will have to find other avenues, but the grunts (and that has diminished with electronic billing) can be retrained in medical technologies and nursing, and even in the development and management of a national health care database.
Jack Lohman
April 13, 2007 9:52 AM | Reply | Permalink
Huge savings can be realized by eliminating the wasteful "healthcare" spending that now fuels massive profits of HMO's, other insurance co's, and bit Pharma as well as the mega mult-million dollar salaries of their CEO's.
How that will impact our economy I'm not sure but I don't think it will push many people into poverty or out of their jobs.
April 13, 2007 9:58 AM | Reply | Permalink
This does not comport with Maggie Mahar’s statement:
“private insurers’ profits and administrative costs account for only 4.5% of our total health care bill”
Do you contest her numbers?
I didn’t question the effect on the economy. I merely suggest that if large health care cost savings are going to be realized, there will likely be dislocation of employees. That is not a bad thing … happens every day in a healthy economy.
April 13, 2007 10:57 AM | Reply | Permalink
NPE
I watched the Las Vegas event a few weeks ago. All #7 Democratic presidential candidates who attended referenced prevention(Check out the video-cast)
Former Gov. John Kitzhaber of Oregon is a prevention advocate as is,of all people, Mayor Michael Bloomberg of New York who is not running for president -YET?
Don't be so quick to dismiss prevention as politically impossible
Dr. Rick Lippin
Southampton, Pa
http://medicalcrises.blogspot.com
April 13, 2007 1:38 PM | Reply | Permalink
Re: Many single payer proponents promise spectacular reduction in health care costs due to elimination of inefficiencies. It seems to me that means fewer employees or lower pay for them.
Well, we would cut out the need for large-scale marketing and advertising, and certainly would get rid of lots of (highly paid) upper management. But we'd need at least as many, if not more, mail room clerks, customer service reps, auditors and accountants, claims examiners, case management specialists, health case IT professionals, financial analysts and other such folk. Public plans do not administer themselves, and in many ways they are even more byzantine than private plans.
April 13, 2007 2:51 PM | Reply | Permalink
Re: and you're assuming that people will only use the health care they need
The term "Need" is a bit vague, but in my experience only hypochondriacs and perhaps the shut-in elderly look forward to doctor visits. There are strong incentives against using healthcare quite apart from cost: it's almost always inconvenient, sometimes unpleasant, painful, dehumanizing even dangerous. After all, how many people have spinaltaps or lower GIs because they enjoy them? All in all I think you will find more instances of people avoiding healthcare when they need it than the other way around.
April 13, 2007 2:56 PM | Reply | Permalink
So you are not among those who promise that SP will be much less costly?
April 13, 2007 3:41 PM | Reply | Permalink
Ann -- I take it from context that in your experience as a medical professional, patients have always consistently followed the courses of treatment recommened as best for them, and have done so without resistance, complaint or backsliding ... but you may have heard tales of patients who behaved otherwise.
Indeed, you may know of highly efficacious treatments that are not unalloyed goods for every patient.
I also take it that you have not encountered any lingering resistance of resentment among workers who have been made redundant by improved labor efficiencies in the industries where they (and generations before them) built their careers ... but you may have heard of people who do not celebrate their transitional displacement as enthusiastically as the rest of us who profit from these efficiencies.
In this context, may I suggest you give Mark Schmitt's piece another careful read?
April 13, 2007 5:08 PM | Reply | Permalink
Actually I do think it would be less costly, but because A) few marketing costs B) no need to pay dividends to stockholders C) No multiple layers of management D) prices will pretty much be set by fiat as Medicare/Medicaid do now, thus holding down medical inflation.
April 13, 2007 5:56 PM | Reply | Permalink
.
Maggie Mahar suggests that profits and administration account for 4.5% of the total bill if you believe her.
Price controls seem to be the only option. Do you think that will work very well? What will happen when the nurses go out on strike?
April 13, 2007 6:56 PM | Reply | Permalink
Typical evidence is that administrative costs of PRIVATE health insurance ranges from 12 to 25% of costs.
April 13, 2007 8:19 PM | Reply | Permalink
An important pro-SP argument Cohn leaves out:
Changes to 1/6th the economy sounds pretty scary.... But only until you realize about 5/6th of the economy, all but the top, are already suffering due to run-away costs!
Ironically, included in the 5/6th already suffering are much of the 1/6th in HealthCare, themselves paying too much for the inefficient system!
Many Americans are already losing jobs and American companies losing competitiveness, which is not simply a one time cost, but eroding fundamentals. Lightening the HC burden on the "other 5/6th" of the economy will spur growth, helping everyone, including the 1/6th in HC.
April 14, 2007 3:57 AM | Reply | Permalink