Universal affordable coverage is actually compatible with supply side competition, you don’t have to have a system where the government directly pays for everything, like the British NHS. It is still not compatible with pure libertarianism of course, unless the level of wealth in a country is such that everyone can afford insurance without government aid or private charity.
As you know I usually find myself complaining about how things are organised in the Netherlands, but in the last few years things have improved in the healthcare sector. Our new system has some interesting features that deserve attention.
If you’re going to have state intervention, this may not be a bad way to do it. I don’t expect you to be enthusiastic about this, but I hope you’ll agree this is actually one of the less crazy ideas of those crazy Dutch 🙂
Discussion there much recommended, especially the role of the AMA in reducing competition.
#
Where I live, in the Netherlands, we have had a hybrid system for a very long time. For the past couple of years we have been moving towards a more market based system. In the US, we see a trend away from pure market forces. We may end up converging to a common system.
Some features of the Dutch system:
* Insurance is mandatory
* People with lower incomes get a healthcare allowance
* Individuals can choose their insurance company
* Individuals have to pay their insurance bill every month, making the costs visible
* Insurance companies have to accept all applicants
* Insurance companies have to offer everybody coverage for the same price and cannot differentiate between the healthy and the sick, the young and the old.
* Medical institutions and insurance companies have to compete
* There is a government fund and equalisation scheme for chronically ill patients, which means insurance companies can still make a profit on them
* Insurance companies have to offer basic, minimal coverage specified by law
It is far from perfect, but it combines universal, affordable coverage with competition on the supply side. I think it is a tremendous improvement over the largely socialised cartel we had previously.
I don’t want to lose the good health insurance I have now so someone else can be covered. That may sound callous until some government flunky tells your otherwise healthy 75 year old mother replacing her hip just isn’t worth it.
Sacrifice, it’s what’s for dinner.
If the issue, for most Americans, boils down to merely reducing healthcare costs, as the author claims; then the simplest way to do that is to prohibit carriers from negotiating prices with and paying providers directly. If individuals negotiate directly with and pay providers and seek reimbursement afterwards then prices will surely drop. This will restore some semblance of a market for health services which has not existed since the advent of medicare.
The surest way to lower costs is to eliminate health insurance altogether. Then you will have an authentic market for healthcare.
A pure market for healthcare existed in the USA until the beginning of the Korean War. It worked pretty well. The average lifespan was only marginally shorter than it is today.
Of course, doctors didn’t get rich then. Hospitals did not have the enormous overhead they have today. When you were sick or hurt, you went to the doctor or the hospital, were treated and then you paid what you could, over time if necessary. Few, if any people were denied treatment. That changed with the largescale implementation of group health insurance in the fifities. This marked the end of any kind of market mechanism in healthcare. Patients could demand more and doctors could charge more. Hospitals could afford to make greater and larger capital improvements. Doctors and hospitals also began refusing treatment to those that were uninsured. Did people live longer with the advent of health insurance? Only a little.
The greatest gains in group health and longevity were made between 1900 and 1945. These gains were the results of clean drinking water, sanitary sewers, childhood immunization, and anti-biotics developed in the thirties and forties. Of all the great advances in healthcare and technology, since 1950, only improvements in trauma treatment have contributed to longevity. Every other advance has just barely chipped at the edges while costs have spriraled out of control.
It’s classic Ponnuru; well-argued, remorselessly logical, entirely correct — but unfortunately bloodless, unlikely to move anyone except that tiny sliver of people who have not yet made up their minds but who are persuadable by an appeal to pure intellect.
It’s a sad fact o’ life, but the possibility that Liam Neeson’s wife died in part because a Canadian government bureaucrat had written off good air ambulance service in Ontario as “wasteful” spending will be a far more potent argument against government-run healthcare than anything Ponnuru here says.
One might argue he is really addressing politicians, people who have the brains and involvement to think through the issues carefully. But that’s a joke. Politicians support, or do not support, universal health care coverage purely for its political effects. You can be damn sure they’ll be sure their own health-care is carefully exempt from any horror they impose on the rest of us. Or else they’ll just go buy what they want from where it’s still available, the way Canadian legislators fly to the US to get treatment they’ve denied to ordinary Canadians.
Bill,
The situation you describe is far more likely to happen under the US system, where “some corporate flunky tells your otherwise healthy 75 year old mother replacing her hip just isn’t worth it.”
Under a universal health coverage system like in Canada, elected officials are ultimately responsible for the quality of service. Let that quality drop, and you get voted out of office. You can imagine the uproar if people’s parents didn’t get decent health care.
Older people have the advantage: Seniors *vote*, far more than young adults. The political parties are well aware of this, and know not to offend them.
The chart below shows the stats on hip-replacements in Canada: http://secure.cihi.ca/cihiweb/en/media_10mar2004_tab2_e.html
As you can see, plenty of people over 75 are getting hip replacements, and the number is climbing. For people 85+, the number of hip replacements is up over 60% in ten years.
“Of all the great advances in healthcare and technology, since 1950, only improvements in trauma treatment have contributed to longevity.”
I’m sure the hundreds of thousands of cancer and heart disease victims alive today that would have died quickly 20 years ago agree with you.
Carl,
Medivac helicopter are expensive to buy and operate. Whether one is available is a function of population density, not the type of health care system. Low-population rural areas in the US go without them too.
What you DO find more often in Canada, is medivac fixed-wing aircraft. I grew up in northern Manitoba, and my sister was once airlifted down to Winnipeg on one. A helicopter would not have made sense – the distances involved are just too great. While the ski slope was within helicopter range (only just), planning needs to take the whole province into consideration. And it’s a very big province.
Jardinero1,
Longevity has also occurred in chronic diseases such as heart attack (stents, bypasses) and diabetes. Although the maximum length of life (~100 years) has not gone up, there are many 50 to 85 year old people now alive that would have died in the 1950’s. The reason 65 years was chosen for Social Security was most died by then. Our modern life has more food (and less stress) which leads to the chronic diseases. And the orthopedic surgery now possible is amazing! Reduce the costs, of course, but I’ll take today’s medicine, thank you.
It’s interesting that the article by the NRO writer did not mention Medical Savings Accounts. Like other forms of insurance, this would have catastrophic coverage only. The addition of tax deductibility for minor medical expenses helps the deal. I guess politically these were “tried” but failed due to Ted Kennedy mucking them up as a precursor to government coverage. Maybe the writer just wanted to get half a loaf rather than the better answer.
IMO there should be some form of universal coverage. E.g. immunization. With universal immunization everyone benefits from the results of that program. The question is where you draw the line. Sometimes the line is drawn where a condition is life-threatening or not. When that is the case there are usually private practices for those cases where people either want more expedience or want coverage for something the basic universal coverage scheme won’t do.
Ponnoru leaves off the most important reason to
have single payer health insurance. The overhead
losses of the major insurers is 30%, which means
approximately 30% of all dollars shot through a
Health insurance company are not delivered as services.
Given the US spends 18% of GDP on Medical services
while the Rest of the G-8 spend 12% on medical
services, it seems that eliminating Insurance Companies
would be the best place to start.
it may seem unbelievable but the efficiency of Medicare
is 1% for service delivery compared to 33% for united health. The government is 30 times better then private
industry, a truly damning statement, i have never seen.
as for medical savings accounts they are in law,
most people don’t like them and they don’t work.
Too much paperwork and too little value.
The overhead losses of the major insurers is 30%, which means approximately 30% of all dollars shot through a Health insurance company are not delivered as services.
It doesn’t have to be. That’s an artifact of the rest of the screwed-up system. Get some competition in there and it will get better (assuming that it’s true).
it may seem unbelievable but the efficiency of Medicare
is 1% for service delivery compared to 33% for united health.
It doesn’t just “seem” unbelievable. It is unbelievable. It’s nonsense.
More competition isn’t going to fix it.
While a government bureaucracy may be less efficient than a private one, in the case of the US system a doctor has to deal with 100 *parallel* bureaucracies.
US doctors have to charge higher fees to cover the salary of a full-time staffer to deal with over a hundred different insurers, all of whom – because of competition – are bent on denying care whenever possible to keep costs down.
Canadian doctors also pay much lower malpractice insurance fees. In the US a doctor’s mistake, beyond the initial damage, may render the victim uninsurable for life. This is a big part of the huge lawsuits in the US.
Canadians are far less likely to sue in the first place, since they’re not having to absorb devastating financial losses in addition to any physical losses when something goes awry. The cost of fixing the damaging treatment will be covered. No matter what happens, the victim will remain insured for life. When lawsuits do occur, the awards don’t have to include coverage for future medical costs, which reduces the insurance company’s liability.
Let that quality drop, and you get voted out of office.
Well, we know that’s c*ap on the face of it.
Canadians are far less likely to sue in the first place. .
Mainly because in Canada, losing a lawsuit requires that you pay a part of the winner’s fees, something the US will never adopt as long as the trail lawyers association continues to contribute hugely to the Democrats. If/when the US adopts a NHS you can be sure that the lawyers will be feeding at the trough just as much as they are now and with the same expense to the general populace.
US doctors have to charge higher fees to cover the salary of a full-time staffer to deal with over a hundred different insurers
Most of the staff’s time is spent processing medicare (government) forms and making sure they don’t make a mistake that could shut them down. Virtually all the doctors I know only cover a few plans to keep things tidy. It’s unlikely this will change much at all.
And thanks for dropping by Roger. One likes to recognize a pro salesman when one sees one.
Jack,
I hope you’re not thinking of the system of paying small medical bills (for glasses, supplies, etc.) by the end of the year or lose the money. The Health Savings Accounts (sorry for any confusion, see hsacenter.com) using “Golden Rule” catastrophic insurance, where you get to keep the extra in an Medical IRA using a special credit card for doctor visits, etc. The HSA should be much less expensive than the present health insurance. For Co-pay, most doctors use credit cards anyway. But Ted Kennedy messed it up, plus as with Undertakers and Cell Phone companies, medical insurance is such a racket.
We can agree that the American system is not a true Free Enterprise system. But government is not the answer. Medicare screws the doctors so much that many want nothing to do with it.
Rand doesn’t believe the Numbers, I will cite CAHI
One of the most common, and least challenged, assertions in the debate over U.S. health care policy is that Medicare administrative costs are about 2 percent of claims costs, while private insurance companies’ administrative costs are in the 20 to 25 percent range.
Now CAHI went and dug in a bit, and really went through,
and they still found a massive economy in the Medicare
program.
when you dig in and look at the real costs of private insurance overhead it works out to about 50%.
Those numbers are meaningless absent a description of the accounting and what “administrative costs” and “overhead” mean (and they mean different things in government programs than private ones — if I kept my books the way the government does, I’d be in jail).
scott I know the difference between Flexible spending
accounts and Health Care savings accounts.(Medical IRAs)
FSA’s are tax advantaged 12 month small accounts
and a Medical IRA is an invested longer term account
with the idea that it will grow over time and become
a source for expenses in old age.
the problem with Medical IRA’s is that an individual
has no bargaining power with a hospital, medicare
has great rates, United Health and Blue Cross get
great rates, individuals get screwed, plus anyone who
has a medical IRA now just lost 50% of it’s value
when the market caved in.
Medical IRA’s are a distraction at best”.
> * Insurance is mandatory
What happens to folks who refuse to buy? (Do they get thrown in jail?)
> * Insurance companies have to offer everybody coverage for the same price and cannot differentiate between the healthy and the sick, the young and the old.
So, if I’m young and healthy, I’m paying more so someone old and/or sick can pay less. As someone young and healthy, I’m going to try to avoid that.
> * Medical institutions and insurance companies have to compete
Actually, they don’t. They can quit.
> * There is a government fund and equalisation scheme for chronically ill patients, which means insurance companies can still make a profit on them
Such a scheme is necessary only if the total private payments are not enough. They’re not able to get enough young and healthy to participate and/or the “same price” (charged everyone) isn’t enough.
> * Insurance companies have to offer basic, minimal coverage specified by law
Which almost certainly means that some people are paying for things that are useless to them.
Jack Lee claims that govt healthcare in the US is more cost-efficient than private healthcare.
Interestingly enough, we can actually look at the totals. It turns out that about half of Americans who have “insurance” get it through govt. Yet, the cost of to cover that half is the same as the cost of covering the other half. If there is a savings somewhere, it’s being wasted somewhere else.
However, I’m a reasonable person. I’m in favor of opening up govt healthcare at cost to everyone. If/when it’s actually cheaper and better as Lee believes, folks (and companies) will flock to it and abandon the private system.
What? Lee can’t make things work unless everyone is forced to play?
Health care doesn’t happen magically. It is a service provided by people to other people. The people who provide it are entitled to compensation for their service.
If you have a “right” to their service, you allegedly don’t have to compensate for that service. Problem.
If you have a “right” to pay only what you can “afford” for their service, you effectively claim the right to tell them what you will pay for the service they still can’t deny you. Problem.
This whole debate originates from the fallacious declaration of health care as a “right.” It should be shot down at that point and not one syllable later.
Andy
I said “Medicare is more efficient then private health
insurance”. Now My brother used to work for the
feds and had Blue Cross as his provider there.
Blue cross is only marginally more efficient then
United Health or Aetna, same as Tricare being only
marginally more efficient then Aetna.
Where the efficiencies come in is having the government
administer the benefit.
VA was very efficient in the 1990s at administration
and provision of benefit.
now how do you make public health care mandatory?
simple, expand medicare. Everyone pays an additional
2% of salary, as medicare and they get a medicare
card.
Now, Medicare needs to then turn around and reorient
services. Medicare pays all primary care and a formulary
list of solely generic drugs. Medicare covers accidents
and severe conditions until you spend 30 days in the
ICU and after that they transfer you to a hospice.
If people want catastrophic care, plastic surgery,
reconstructive surgery, brand name drugs,
or extended ICU they can buy Medicare supplementals
just like my Grandmother did.
primary care provision isn’t the expensive part of medicine
what’s expensive is ICU care and Pharmaceuticals.
If people want that they can buy that insurance.
K,
In my province (Manitoba), the Conservative Party was voted out of office (and the NDP voted in) almost *exclusivly* on the health care issue. While I have little use for the NDP, health care HAS improved.
Having the health care system accountable to the voters *works*.
As for calling me a “pro salesman”, that’s a dishonest cop-out, the kind commonly used by the tinfoil hat crowd. (Point out flaws in 9/11, “North American Union” or PETA theories, and you get accused of having your parking validated by the CIA, the CFR, KFC, Mossad, the Illuminatti, Them, They, etc.)
I’m no salesman. I’m just a programmer who has experience with the Canadian system, and compares notes with friends in the American system.
>> * Insurance is mandatory
> What happens to folks who refuse to buy? (Do they get thrown in jail?)
Lol, no they don’t get thrown in jail. I think the government just goes after their money. Politicians and the newspapers don’t spell this out very explicitly, but I think the uninsured are mostly illegal immigrants.
Medical insurance has been compulsory for decades if not longer, so most people were registered with their local insurance institution anyway. The new system has been operating for a while and I don’t remember all the details of the old system, which was very complicated anyway. There was a two-tier system: a subsidised public system (‘sickness fund’) for people with low incomes and a private system for people with higher incomes. IIRC insurance premiums for the sickness fund were deducted automatically from your paycheck. The insurance institutions were regional cartels who operated in districts. I don’t think there was ever an absolute monopoly in any district.
There were some vestiges of the pre-1960s systems were different groups in society (‘pillars’) lived more or less separate lives with separate institutions. There were socialists, (classical) liberals, catholics and protestants and maybe some I’ve forgotten, each with their own shops, labour unions, newspapers, radio & TV broadcasting organisations, sports clubs, political parties, churches, hospitals, insurance institutions etc. The mind boggles.
It was utterly paternalistic and anti-competitive. I can see how the features of the current system wouldn’t appeal to you, but for me, coming from the other extreme, they are a breath of fresh air.
>> * Insurance companies have to offer everybody coverage for the same price and cannot differentiate between the healthy and the sick, the young and the old.
> So, if I’m young and healthy, I’m paying more so someone old and/or sick can pay less. As someone young and healthy, I’m going to try to avoid that.
Good luck with that, they’ll know how to find you 🙂
>> * Medical institutions and insurance companies have to compete
> Actually, they don’t. They can quit.
I don’t think that has happened yet. What has happened is that insurance institutions (mostly ‘not-for-profits’ – yeah right) have started to merge and some badly run ones have been taken over by better run ones. The same is starting to happen with hospitals – finally failing management and institutions are starting to be held to account.
The insurance companies have been driving harder bargains with doctors, dentists, hospitals etc and they have been clamping down on fraud – both by patients and by doctors. Overpaid (and sometimes overqualified) employees have started losing their jobs, to be replaced by cheaper employees. The dentist no longer performs simple activities like removing plaque himself, but leaves the job to a cheaper assistent.
A small amount of market forces goes a long way!
>> * There is a government fund and equalisation scheme for chronically ill patients, which means insurance companies can still make a profit on them
> Such a scheme is necessary only if the total private payments are not enough. They’re not able to get enough young and healthy to participate and/or the “same price” (charged everyone) isn’t enough.
I’m not sure this fund is actively subsidised by the government although there are plenty of subsidies elsewhere, mostly targeted at consumers so as to stimulate competition. It’s a fund every insurer has to contribute to and gets money from if they have chronically ill clients. It serves to remove the incentive to cut down on care to chronically ill patients. Since insurers can still make a profit on them, they have an incentive to keep them happy so they won’t move to another insurer.
>> * Insurance companies have to offer basic, minimal coverage specified by law
> Which almost certainly means that some people are paying for things that are useless to them.
Absolutely, although there is still some choice. The basic package includes things like your GP, emergency care etc. But insurers are free to offer extra frills if they want to, as long as they also offer clients the choice of a basic package only. This includes things like homoeopathy and other quackery. You’ll not be surprised I chose not to pay for that. Insurers are also free to restrict your choice of doctor or hospital somewhat, or at least to offer discounts for preferred suppliers, although I think they are still somewhat reluctant to do that. Some insurance companies offer lower prices if you can ‘prove’ you lead a healthy lifestyle, for instance if you join a gym.
Interesting comments from people who do not live in the United States. I also think Jardinero1 is on to something.
Last December an article appeared in the Mensa Bulletin written by a retired businessman named Duane Bates who had worked in Europe for a number of years. The article appears on his weblog as HOW WELL DOES UNIVERSAL HEALTHCARE WORK?
What’s damning is that other countries have at least equal lifespans for about the half the money.
It’s been observed in many places that Americans pay quite a bit of money for treatments that do not, in fact, really work all that well if at all.
Socialism — even in health care — has multitudinous problems. But it does seem other countries — even those with highly socialized health care systems (think UK) — have managed to get a grip on costs without sacrificing life.
Libertarians need to both understand this kind of phenomenon and figure out at least some approaches to deal with the problem(s).
Jack and Chuck,
Sorry for being a broken record here, but the Health Savings Accounts have the most Free Market / Libertarian approach to the problem. You do not charge your oil changes, car washes, etc. to the Car Insurance company nor your grass cutting, etc. for Home Insurance. And when you need catastrophic insurance, the Health Insurance companies would go to bat for you with the hospital, like when the Car Insurance companies say where to get your car repaired.
Even if the market drives the value of the Medical IRA down, I answer so what, as long as it’s my money. Given that I get nothing back from my present health insurance, I’m still ahead. And I could have kept it in cash if I’m scared of the market.
Scott,
The point I was trying to make was that there are other things going on.
I am super rational when it comes to health care decisions. Some years ago my mother and I discussed what she wanted near the end of her life. She agreed with me — no extraordinary measures.
Other people don’t think like that. Some people will spend huge amounts of money in desperate attempts to prevent death — or their relatives will.
Then there are the people who trust narrow specialists. The specialist tells them that such and such a measure will enormously benefit them. They’ll spend the money, not realizing the doctor isn’t being entirely rational themselves.
Am I discussing irrational factors? You bet. Such irrationality has real world consequences.
Am I discussing lack of knowledge leading to dysfunctional behaviors and choices? You bet. Such lack of knowledge has real world consequences as well.
>> What happens to folks who refuse to buy? (Do they get thrown in jail?)
> Lol, no they don’t get thrown in jail. I think the government just goes after their money.
In other words you don’t know. So, let’s go with “what happens to folks who don’t give the govt money that it demands?” Hint – the answer involves threats and/or use of force. And, typically jail for the attempt. In short, refusing to pay for “mandatory insurance” does lead to jail. (The alternative being that Dutch scoflaws are incredibly obedient, which is inconsistent with being a scoflaw.)
> > So, if I’m young and healthy, I’m paying more so someone old and/or sick can pay less. As someone young and healthy, I’m going to try to avoid that.
> Good luck with that, they’ll know how to find you
(1) How do they know that I haven’t bought insurance and how do they know where to find me? and (more important) (2) what are they going to do? “Go after money” means jail and violence.
Rand Says
“Those numbers are meaningless absent a description of the accounting and what “administrative costs” and “overhead” mean ”
well i did include a link to the CAHI report which did
actually do all that, and still found Medicare was 3X
more efficient then Private Health Insurance, but,
you would rather Bloviate then follow the link, which
is perfectly fine.
Bloviate on, the Rest of the US are progressing.
Actually, the report that Jack Lee cited did not tell us that medicare costs less for similar or better outcomes. It merely claims that it spends less money under one label.
I’m all in favor of govt programs opening up at cost together with a voucher for covered people to leave (same cost) for the private system. If/when govt programs are actually more effective, they’ll gain users. When they’re not, they’ll lose.
Surely Lee won’t object if his goal really is more cost-efficient health care.
# from an earlier post by yours truly on reddit
Universal affordable coverage is actually compatible with supply side competition, you don’t have to have a system where the government directly pays for everything, like the British NHS. It is still not compatible with pure libertarianism of course, unless the level of wealth in a country is such that everyone can afford insurance without government aid or private charity.
As you know I usually find myself complaining about how things are organised in the Netherlands, but in the last few years things have improved in the healthcare sector. Our new system has some interesting features that deserve attention.
If you’re going to have state intervention, this may not be a bad way to do it. I don’t expect you to be enthusiastic about this, but I hope you’ll agree this is actually one of the less crazy ideas of those crazy Dutch 🙂
Culled from an earlier post on the Mises blog:
http://blog.mises.org/archives/008070.asp
Discussion there much recommended, especially the role of the AMA in reducing competition.
#
Where I live, in the Netherlands, we have had a hybrid system for a very long time. For the past couple of years we have been moving towards a more market based system. In the US, we see a trend away from pure market forces. We may end up converging to a common system.
Some features of the Dutch system:
* Insurance is mandatory
* People with lower incomes get a healthcare allowance
* Individuals can choose their insurance company
* Individuals have to pay their insurance bill every month, making the costs visible
* Insurance companies have to accept all applicants
* Insurance companies have to offer everybody coverage for the same price and cannot differentiate between the healthy and the sick, the young and the old.
* Medical institutions and insurance companies have to compete
* There is a government fund and equalisation scheme for chronically ill patients, which means insurance companies can still make a profit on them
* Insurance companies have to offer basic, minimal coverage specified by law
It is far from perfect, but it combines universal, affordable coverage with competition on the supply side. I think it is a tremendous improvement over the largely socialised cartel we had previously.
I don’t want to lose the good health insurance I have now so someone else can be covered. That may sound callous until some government flunky tells your otherwise healthy 75 year old mother replacing her hip just isn’t worth it.
Sacrifice, it’s what’s for dinner.
If the issue, for most Americans, boils down to merely reducing healthcare costs, as the author claims; then the simplest way to do that is to prohibit carriers from negotiating prices with and paying providers directly. If individuals negotiate directly with and pay providers and seek reimbursement afterwards then prices will surely drop. This will restore some semblance of a market for health services which has not existed since the advent of medicare.
The surest way to lower costs is to eliminate health insurance altogether. Then you will have an authentic market for healthcare.
A pure market for healthcare existed in the USA until the beginning of the Korean War. It worked pretty well. The average lifespan was only marginally shorter than it is today.
Of course, doctors didn’t get rich then. Hospitals did not have the enormous overhead they have today. When you were sick or hurt, you went to the doctor or the hospital, were treated and then you paid what you could, over time if necessary. Few, if any people were denied treatment. That changed with the largescale implementation of group health insurance in the fifities. This marked the end of any kind of market mechanism in healthcare. Patients could demand more and doctors could charge more. Hospitals could afford to make greater and larger capital improvements. Doctors and hospitals also began refusing treatment to those that were uninsured. Did people live longer with the advent of health insurance? Only a little.
The greatest gains in group health and longevity were made between 1900 and 1945. These gains were the results of clean drinking water, sanitary sewers, childhood immunization, and anti-biotics developed in the thirties and forties. Of all the great advances in healthcare and technology, since 1950, only improvements in trauma treatment have contributed to longevity. Every other advance has just barely chipped at the edges while costs have spriraled out of control.
It’s classic Ponnuru; well-argued, remorselessly logical, entirely correct — but unfortunately bloodless, unlikely to move anyone except that tiny sliver of people who have not yet made up their minds but who are persuadable by an appeal to pure intellect.
It’s a sad fact o’ life, but the possibility that Liam Neeson’s wife died in part because a Canadian government bureaucrat had written off good air ambulance service in Ontario as “wasteful” spending will be a far more potent argument against government-run healthcare than anything Ponnuru here says.
One might argue he is really addressing politicians, people who have the brains and involvement to think through the issues carefully. But that’s a joke. Politicians support, or do not support, universal health care coverage purely for its political effects. You can be damn sure they’ll be sure their own health-care is carefully exempt from any horror they impose on the rest of us. Or else they’ll just go buy what they want from where it’s still available, the way Canadian legislators fly to the US to get treatment they’ve denied to ordinary Canadians.
Bill,
The situation you describe is far more likely to happen under the US system, where “some corporate flunky tells your otherwise healthy 75 year old mother replacing her hip just isn’t worth it.”
Under a universal health coverage system like in Canada, elected officials are ultimately responsible for the quality of service. Let that quality drop, and you get voted out of office. You can imagine the uproar if people’s parents didn’t get decent health care.
Older people have the advantage: Seniors *vote*, far more than young adults. The political parties are well aware of this, and know not to offend them.
The chart below shows the stats on hip-replacements in Canada:
http://secure.cihi.ca/cihiweb/en/media_10mar2004_tab2_e.html
As you can see, plenty of people over 75 are getting hip replacements, and the number is climbing. For people 85+, the number of hip replacements is up over 60% in ten years.
“Of all the great advances in healthcare and technology, since 1950, only improvements in trauma treatment have contributed to longevity.”
I’m sure the hundreds of thousands of cancer and heart disease victims alive today that would have died quickly 20 years ago agree with you.
Carl,
Medivac helicopter are expensive to buy and operate. Whether one is available is a function of population density, not the type of health care system. Low-population rural areas in the US go without them too.
What you DO find more often in Canada, is medivac fixed-wing aircraft. I grew up in northern Manitoba, and my sister was once airlifted down to Winnipeg on one. A helicopter would not have made sense – the distances involved are just too great. While the ski slope was within helicopter range (only just), planning needs to take the whole province into consideration. And it’s a very big province.
Jardinero1,
Longevity has also occurred in chronic diseases such as heart attack (stents, bypasses) and diabetes. Although the maximum length of life (~100 years) has not gone up, there are many 50 to 85 year old people now alive that would have died in the 1950’s. The reason 65 years was chosen for Social Security was most died by then. Our modern life has more food (and less stress) which leads to the chronic diseases. And the orthopedic surgery now possible is amazing! Reduce the costs, of course, but I’ll take today’s medicine, thank you.
It’s interesting that the article by the NRO writer did not mention Medical Savings Accounts. Like other forms of insurance, this would have catastrophic coverage only. The addition of tax deductibility for minor medical expenses helps the deal. I guess politically these were “tried” but failed due to Ted Kennedy mucking them up as a precursor to government coverage. Maybe the writer just wanted to get half a loaf rather than the better answer.
IMO there should be some form of universal coverage. E.g. immunization. With universal immunization everyone benefits from the results of that program. The question is where you draw the line. Sometimes the line is drawn where a condition is life-threatening or not. When that is the case there are usually private practices for those cases where people either want more expedience or want coverage for something the basic universal coverage scheme won’t do.
Ponnoru leaves off the most important reason to
have single payer health insurance. The overhead
losses of the major insurers is 30%, which means
approximately 30% of all dollars shot through a
Health insurance company are not delivered as services.
Given the US spends 18% of GDP on Medical services
while the Rest of the G-8 spend 12% on medical
services, it seems that eliminating Insurance Companies
would be the best place to start.
it may seem unbelievable but the efficiency of Medicare
is 1% for service delivery compared to 33% for united health. The government is 30 times better then private
industry, a truly damning statement, i have never seen.
as for medical savings accounts they are in law,
most people don’t like them and they don’t work.
Too much paperwork and too little value.
The overhead losses of the major insurers is 30%, which means approximately 30% of all dollars shot through a Health insurance company are not delivered as services.
It doesn’t have to be. That’s an artifact of the rest of the screwed-up system. Get some competition in there and it will get better (assuming that it’s true).
it may seem unbelievable but the efficiency of Medicare
is 1% for service delivery compared to 33% for united health.
It doesn’t just “seem” unbelievable. It is unbelievable. It’s nonsense.
More competition isn’t going to fix it.
While a government bureaucracy may be less efficient than a private one, in the case of the US system a doctor has to deal with 100 *parallel* bureaucracies.
US doctors have to charge higher fees to cover the salary of a full-time staffer to deal with over a hundred different insurers, all of whom – because of competition – are bent on denying care whenever possible to keep costs down.
Canadian doctors also pay much lower malpractice insurance fees. In the US a doctor’s mistake, beyond the initial damage, may render the victim uninsurable for life. This is a big part of the huge lawsuits in the US.
Canadians are far less likely to sue in the first place, since they’re not having to absorb devastating financial losses in addition to any physical losses when something goes awry. The cost of fixing the damaging treatment will be covered. No matter what happens, the victim will remain insured for life. When lawsuits do occur, the awards don’t have to include coverage for future medical costs, which reduces the insurance company’s liability.
Let that quality drop, and you get voted out of office.
Well, we know that’s c*ap on the face of it.
Canadians are far less likely to sue in the first place. .
Mainly because in Canada, losing a lawsuit requires that you pay a part of the winner’s fees, something the US will never adopt as long as the trail lawyers association continues to contribute hugely to the Democrats. If/when the US adopts a NHS you can be sure that the lawyers will be feeding at the trough just as much as they are now and with the same expense to the general populace.
US doctors have to charge higher fees to cover the salary of a full-time staffer to deal with over a hundred different insurers
Most of the staff’s time is spent processing medicare (government) forms and making sure they don’t make a mistake that could shut them down. Virtually all the doctors I know only cover a few plans to keep things tidy. It’s unlikely this will change much at all.
And thanks for dropping by Roger. One likes to recognize a pro salesman when one sees one.
Jack,
I hope you’re not thinking of the system of paying small medical bills (for glasses, supplies, etc.) by the end of the year or lose the money. The Health Savings Accounts (sorry for any confusion, see hsacenter.com) using “Golden Rule” catastrophic insurance, where you get to keep the extra in an Medical IRA using a special credit card for doctor visits, etc. The HSA should be much less expensive than the present health insurance. For Co-pay, most doctors use credit cards anyway. But Ted Kennedy messed it up, plus as with Undertakers and Cell Phone companies, medical insurance is such a racket.
We can agree that the American system is not a true Free Enterprise system. But government is not the answer. Medicare screws the doctors so much that many want nothing to do with it.
Rand doesn’t believe the Numbers, I will cite CAHI
http://www.pnhp.org/news/2006/january/cahis_claim_of_medi.php
One of the most common, and least challenged, assertions in the debate over U.S. health care policy is that Medicare administrative costs are about 2 percent of claims costs, while private insurance companies’ administrative costs are in the 20 to 25 percent range.
Now CAHI went and dug in a bit, and really went through,
and they still found a massive economy in the Medicare
program.
when you dig in and look at the real costs of private insurance overhead it works out to about 50%.
Those numbers are meaningless absent a description of the accounting and what “administrative costs” and “overhead” mean (and they mean different things in government programs than private ones — if I kept my books the way the government does, I’d be in jail).
scott I know the difference between Flexible spending
accounts and Health Care savings accounts.(Medical IRAs)
FSA’s are tax advantaged 12 month small accounts
and a Medical IRA is an invested longer term account
with the idea that it will grow over time and become
a source for expenses in old age.
the problem with Medical IRA’s is that an individual
has no bargaining power with a hospital, medicare
has great rates, United Health and Blue Cross get
great rates, individuals get screwed, plus anyone who
has a medical IRA now just lost 50% of it’s value
when the market caved in.
Medical IRA’s are a distraction at best”.
> * Insurance is mandatory
What happens to folks who refuse to buy? (Do they get thrown in jail?)
> * Insurance companies have to offer everybody coverage for the same price and cannot differentiate between the healthy and the sick, the young and the old.
So, if I’m young and healthy, I’m paying more so someone old and/or sick can pay less. As someone young and healthy, I’m going to try to avoid that.
> * Medical institutions and insurance companies have to compete
Actually, they don’t. They can quit.
> * There is a government fund and equalisation scheme for chronically ill patients, which means insurance companies can still make a profit on them
Such a scheme is necessary only if the total private payments are not enough. They’re not able to get enough young and healthy to participate and/or the “same price” (charged everyone) isn’t enough.
> * Insurance companies have to offer basic, minimal coverage specified by law
Which almost certainly means that some people are paying for things that are useless to them.
Jack Lee claims that govt healthcare in the US is more cost-efficient than private healthcare.
Interestingly enough, we can actually look at the totals. It turns out that about half of Americans who have “insurance” get it through govt. Yet, the cost of to cover that half is the same as the cost of covering the other half. If there is a savings somewhere, it’s being wasted somewhere else.
However, I’m a reasonable person. I’m in favor of opening up govt healthcare at cost to everyone. If/when it’s actually cheaper and better as Lee believes, folks (and companies) will flock to it and abandon the private system.
What? Lee can’t make things work unless everyone is forced to play?
Health care doesn’t happen magically. It is a service provided by people to other people. The people who provide it are entitled to compensation for their service.
If you have a “right” to their service, you allegedly don’t have to compensate for that service. Problem.
If you have a “right” to pay only what you can “afford” for their service, you effectively claim the right to tell them what you will pay for the service they still can’t deny you. Problem.
This whole debate originates from the fallacious declaration of health care as a “right.” It should be shot down at that point and not one syllable later.
Andy
I said “Medicare is more efficient then private health
insurance”. Now My brother used to work for the
feds and had Blue Cross as his provider there.
Blue cross is only marginally more efficient then
United Health or Aetna, same as Tricare being only
marginally more efficient then Aetna.
Where the efficiencies come in is having the government
administer the benefit.
VA was very efficient in the 1990s at administration
and provision of benefit.
now how do you make public health care mandatory?
simple, expand medicare. Everyone pays an additional
2% of salary, as medicare and they get a medicare
card.
Now, Medicare needs to then turn around and reorient
services. Medicare pays all primary care and a formulary
list of solely generic drugs. Medicare covers accidents
and severe conditions until you spend 30 days in the
ICU and after that they transfer you to a hospice.
If people want catastrophic care, plastic surgery,
reconstructive surgery, brand name drugs,
or extended ICU they can buy Medicare supplementals
just like my Grandmother did.
primary care provision isn’t the expensive part of medicine
what’s expensive is ICU care and Pharmaceuticals.
If people want that they can buy that insurance.
K,
In my province (Manitoba), the Conservative Party was voted out of office (and the NDP voted in) almost *exclusivly* on the health care issue. While I have little use for the NDP, health care HAS improved.
Having the health care system accountable to the voters *works*.
As for calling me a “pro salesman”, that’s a dishonest cop-out, the kind commonly used by the tinfoil hat crowd. (Point out flaws in 9/11, “North American Union” or PETA theories, and you get accused of having your parking validated by the CIA, the CFR, KFC, Mossad, the Illuminatti, Them, They, etc.)
I’m no salesman. I’m just a programmer who has experience with the Canadian system, and compares notes with friends in the American system.
>> * Insurance is mandatory
> What happens to folks who refuse to buy? (Do they get thrown in jail?)
Lol, no they don’t get thrown in jail. I think the government just goes after their money. Politicians and the newspapers don’t spell this out very explicitly, but I think the uninsured are mostly illegal immigrants.
Medical insurance has been compulsory for decades if not longer, so most people were registered with their local insurance institution anyway. The new system has been operating for a while and I don’t remember all the details of the old system, which was very complicated anyway. There was a two-tier system: a subsidised public system (‘sickness fund’) for people with low incomes and a private system for people with higher incomes. IIRC insurance premiums for the sickness fund were deducted automatically from your paycheck. The insurance institutions were regional cartels who operated in districts. I don’t think there was ever an absolute monopoly in any district.
There were some vestiges of the pre-1960s systems were different groups in society (‘pillars’) lived more or less separate lives with separate institutions. There were socialists, (classical) liberals, catholics and protestants and maybe some I’ve forgotten, each with their own shops, labour unions, newspapers, radio & TV broadcasting organisations, sports clubs, political parties, churches, hospitals, insurance institutions etc. The mind boggles.
It was utterly paternalistic and anti-competitive. I can see how the features of the current system wouldn’t appeal to you, but for me, coming from the other extreme, they are a breath of fresh air.
>> * Insurance companies have to offer everybody coverage for the same price and cannot differentiate between the healthy and the sick, the young and the old.
> So, if I’m young and healthy, I’m paying more so someone old and/or sick can pay less. As someone young and healthy, I’m going to try to avoid that.
Good luck with that, they’ll know how to find you 🙂
>> * Medical institutions and insurance companies have to compete
> Actually, they don’t. They can quit.
I don’t think that has happened yet. What has happened is that insurance institutions (mostly ‘not-for-profits’ – yeah right) have started to merge and some badly run ones have been taken over by better run ones. The same is starting to happen with hospitals – finally failing management and institutions are starting to be held to account.
The insurance companies have been driving harder bargains with doctors, dentists, hospitals etc and they have been clamping down on fraud – both by patients and by doctors. Overpaid (and sometimes overqualified) employees have started losing their jobs, to be replaced by cheaper employees. The dentist no longer performs simple activities like removing plaque himself, but leaves the job to a cheaper assistent.
A small amount of market forces goes a long way!
>> * There is a government fund and equalisation scheme for chronically ill patients, which means insurance companies can still make a profit on them
> Such a scheme is necessary only if the total private payments are not enough. They’re not able to get enough young and healthy to participate and/or the “same price” (charged everyone) isn’t enough.
I’m not sure this fund is actively subsidised by the government although there are plenty of subsidies elsewhere, mostly targeted at consumers so as to stimulate competition. It’s a fund every insurer has to contribute to and gets money from if they have chronically ill clients. It serves to remove the incentive to cut down on care to chronically ill patients. Since insurers can still make a profit on them, they have an incentive to keep them happy so they won’t move to another insurer.
>> * Insurance companies have to offer basic, minimal coverage specified by law
> Which almost certainly means that some people are paying for things that are useless to them.
Absolutely, although there is still some choice. The basic package includes things like your GP, emergency care etc. But insurers are free to offer extra frills if they want to, as long as they also offer clients the choice of a basic package only. This includes things like homoeopathy and other quackery. You’ll not be surprised I chose not to pay for that. Insurers are also free to restrict your choice of doctor or hospital somewhat, or at least to offer discounts for preferred suppliers, although I think they are still somewhat reluctant to do that. Some insurance companies offer lower prices if you can ‘prove’ you lead a healthy lifestyle, for instance if you join a gym.
Interesting comments from people who do not live in the United States. I also think Jardinero1 is on to something.
Last December an article appeared in the Mensa Bulletin written by a retired businessman named Duane Bates who had worked in Europe for a number of years. The article appears on his weblog as HOW WELL DOES UNIVERSAL HEALTHCARE WORK?
What’s damning is that other countries have at least equal lifespans for about the half the money.
It’s been observed in many places that Americans pay quite a bit of money for treatments that do not, in fact, really work all that well if at all.
Socialism — even in health care — has multitudinous problems. But it does seem other countries — even those with highly socialized health care systems (think UK) — have managed to get a grip on costs without sacrificing life.
Libertarians need to both understand this kind of phenomenon and figure out at least some approaches to deal with the problem(s).
Jack and Chuck,
Sorry for being a broken record here, but the Health Savings Accounts have the most Free Market / Libertarian approach to the problem. You do not charge your oil changes, car washes, etc. to the Car Insurance company nor your grass cutting, etc. for Home Insurance. And when you need catastrophic insurance, the Health Insurance companies would go to bat for you with the hospital, like when the Car Insurance companies say where to get your car repaired.
Even if the market drives the value of the Medical IRA down, I answer so what, as long as it’s my money. Given that I get nothing back from my present health insurance, I’m still ahead. And I could have kept it in cash if I’m scared of the market.
Scott,
The point I was trying to make was that there are other things going on.
I am super rational when it comes to health care decisions. Some years ago my mother and I discussed what she wanted near the end of her life. She agreed with me — no extraordinary measures.
Other people don’t think like that. Some people will spend huge amounts of money in desperate attempts to prevent death — or their relatives will.
Then there are the people who trust narrow specialists. The specialist tells them that such and such a measure will enormously benefit them. They’ll spend the money, not realizing the doctor isn’t being entirely rational themselves.
Am I discussing irrational factors? You bet. Such irrationality has real world consequences.
Am I discussing lack of knowledge leading to dysfunctional behaviors and choices? You bet. Such lack of knowledge has real world consequences as well.
>> What happens to folks who refuse to buy? (Do they get thrown in jail?)
> Lol, no they don’t get thrown in jail. I think the government just goes after their money.
In other words you don’t know. So, let’s go with “what happens to folks who don’t give the govt money that it demands?” Hint – the answer involves threats and/or use of force. And, typically jail for the attempt. In short, refusing to pay for “mandatory insurance” does lead to jail. (The alternative being that Dutch scoflaws are incredibly obedient, which is inconsistent with being a scoflaw.)
> > So, if I’m young and healthy, I’m paying more so someone old and/or sick can pay less. As someone young and healthy, I’m going to try to avoid that.
> Good luck with that, they’ll know how to find you
(1) How do they know that I haven’t bought insurance and how do they know where to find me? and (more important) (2) what are they going to do? “Go after money” means jail and violence.
Rand Says
“Those numbers are meaningless absent a description of the accounting and what “administrative costs” and “overhead” mean ”
well i did include a link to the CAHI report which did
actually do all that, and still found Medicare was 3X
more efficient then Private Health Insurance, but,
you would rather Bloviate then follow the link, which
is perfectly fine.
Bloviate on, the Rest of the US are progressing.
Actually, the report that Jack Lee cited did not tell us that medicare costs less for similar or better outcomes. It merely claims that it spends less money under one label.
I’m all in favor of govt programs opening up at cost together with a voucher for covered people to leave (same cost) for the private system. If/when govt programs are actually more effective, they’ll gain users. When they’re not, they’ll lose.
Surely Lee won’t object if his goal really is more cost-efficient health care.