Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktLapsed R Bruce Bartlett says government can do it better. Hmmm.
America
The folly at the heart of the US healthcare debate
America is the only developed country that does not offer some form of national health insurance to all its citizens.
Those over the age of 65 have coverage through Medicare and the poor are covered through Medicaid, both established in 1965. Those who are neither poor nor old are expected to obtain their own health insurance or get a job that provides coverage. The federal government does subsidise private insurance through the tax code by allowing its cost to be excluded or deducted from taxable income. This reduces federal revenues by some $180bn per year.
In 2009, the Obama administration put forward a plan for extending health insurance to those who did not have it through an employer, those who could not afford it and those who could not obtain coverage due to a pre-existing medical condition. A complex system of subsidies was established to make coverage affordable to everyone and a mandate was put into place requiring people to get coverage or else pay a fine.
The mandate is by far the most controversial element of the Affordable Care Act. Its rationale is that insurance companies cannot be forced to cover those with pre-existing conditions without it, or else people will simply wait until they are sick before buying health insurance. Nevertheless, many Republicans view the mandate as an unconstitutional intrusion into the economy and they have brought a case before the Supreme Court to declare the legislation null and void for that reason. Court watchers believe the case could go either way, with a final decision expected just before the election in November.
Exactly what would replace the Affordable Care Act if it is found unconstitutional is a mystery. The Obama administration appears to have no back-up plan and Republicans have steadfastly refused to offer any proposal for expanding health coverage. One problem is that before Barack Obama became president, Republicans were the primary supporters of an individual mandate, viewing it is as a more market-oriented way of expanding health coverage without a completely government-run health system. Indeed, Mitt Romney, the likely Republican presidential nominee, established a healthcare system in Massachusetts, where he was governor, that is virtually identical to the national system created by Mr Obama.
Simultaneously, Republicans are keen to cut spending for Medicare and Medicaid, because they are among the most rapidly expanding government spending programmes. A plan supported by Republicans in the House of Representatives would effectively privatise Medicare, giving the elderly a government voucher to buy insurance or health services, in lieu of the pay-for-service system that exists now. Medicaid would be devolved to the states.
What neither party has made any effort to grapple with is the extraordinarily high cost of health, public and private. According to the Organisation for Economic Cooperation and Development, the US spends more of its gross domestic product on health than any other country by a large margin. Americans spent 17.4 per cent of gross domestic product on health in 2009 – almost half of it came from government – versus 12 per cent of GDP or less in other major economies. Britain spends 9.8 per cent of GDP on health, almost all of it through the public sector. The total government outlay is almost exactly the same in the US and the UK at 8.2 per cent of GDP. This suggests that for no more than the US government spends on health now, Americans could have universal coverage and a healthcare system no worse than the British.
However, the option of a completely government-run health system was never seriously considered in the US when the Affordable Care Act was debated in 2009. Americans are too convinced that everything government does is less efficient and costs more than if the private sector does it. The fact that this is obviously wrong in the case of healthcare has never penetrated the public consciousness.
At the moment, everyone is waiting for the Supreme Court to speak before moving forward on any serious new health reform plan. Whichever way the court rules, it is likely to give some push to further action next year regardless of the election outcome. Moreover, the growing governmental cost of Medicare and Medicaid is something that has to be addressed if there is any hope of stabilising the national finances. That alone would be an impetus for action even if the Affordable Care Act had never been enacted.
The writer is a former senior economist at the White House, US Congress and Treasury. He is author of ‘The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take’
Filed under: aca, health insurance, healthcare, politics |
All Things in Moderation 
Do you think Bartlett himself spelled “stabilising” without the American “z”?
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Mark – Yes…
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” Americans are too convinced that everything government does is less efficient and costs more than if the private sector does it. The fact that this is obviously wrong in the case of healthcare has never penetrated the public consciousness.”
Provocative. Is anyone going to challenge that claim?
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I started to and then deleted my post. Being “obviously wrong” on the matter seems to indicate that there is no need for me to respond. I would not call it provocative, I would label it condescending, arrogant and obnoxious.
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I have a decent regard for Bartlett, generally, so I don’t dismiss his statement out-of-hand. Obviously, we know what it costs per patient and per treatment to run the VA system, which is pure socialized medicine. Do we know if it is efficient? Do we know whether or not it is cheaper? Do we know how to distinguish for the unique population served?
We also have the Medicare and Medicaid experiences. We know that our socialized insurance is in a hole and spilling red ink, but do we know whether or not it is actually more efficient than private insurance? My guess is we cannot know because the bargaining leverage of Med/Med is so enormous. It’s not really akin to bargaining at all. Perhaps internal admin costs can be compared, apples to apples.
We also see other mixed mode operations, like Romneycare in MA and clinic care in SF, CA. Surely this has been seriously studied.
Fed Employee insurance runs on bids from the private carriers and it seems to be a better insurance model. ACA does try to ride that model in some ways. If it’s thrown out, maybe we will all become eligible for Fed Employee insurance.
Real cost containment will be a partial function of having more providers, and I will guess that if VA is more efficient than the private market that may be one reason.
Every VA Hospital [4] I have ever visited was nothing like a private hospital. Lots of guys were in the halls, playing checkers or cards, or just walking. Seemed like a lot of VA patients had a strong will to get better, for want of a better description. There is almost a community feel that of course cannot exist in a typical hospital. IMO.
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Bartlett isn’t here to get his panties in a bunch, so perhaps a reasonable discussion can be had. Dave! Rewrite & see what happens…
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Not trying to be snarky but what are the example of our Federal government being more efficient and less costly then the private sector?
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Provocative. Is anyone going to challenge that claim?
Which part of the statement do your consider provocative?
That Americans believe everything Government does is less efficient?
Or…”this is obviously wrong in the the case of healthcare”.
Two thoughts from my perspective..
The first statement is obviously true for a large percentage of Americans. No links because I’m not stating a number…just that it’s significant as in 25% or more. My mother a Fox Geezer told me yesterday that she doesn’t want a nanny state! A nanny state? Really mom…you’re health care for the past 22 years has been provided by the “nanny state”. Yep my poor mom is one of those ladies who would have held the sign that said..Keep the Gov’t out of my health care without once realizing the irony.
The second statement as to the efficacy of government run health cares certainly light up some folks here. Once, when I was still a broadcast journalist during the first HCR debate under the Clintons…I took the camera out to a Sarasota Florida mall. It was winter..prime season…lots and lots of foreigners to interview…I realize my questions of four dozen people do not constitute a scientific sample…but NOT ONE of them was unhappy with their healthcare. Given the meme that had settled into the American consciousness including mine…I have to confess I was surprised almost shocked. Not one Canadian railed against their system…but what about the long waits and the rationing…what long waits and what rationing they replied. I suppose we could write this non scientific sample off to provincialism…most folks want to brag about their nation…but I was still surprised by the enthusiasm with which I was greeted.
Whenever I travel and run into “foreigners” especially Canadians..I ask that question to this day. I’ve never heard the first complaint.
When you combine this observation with the statistics Bartlett used, it does make one wonder why the richest nation in the world can’t figure a way to get more bang for it’s buck and come up with a system that is at least as efficient as all these other countries.
One of the red herrings I often hear is about the horrible wait times in the British system. I call this a red herring because the British could up their expenditure by about 2% of GDP…still less than we spend and eliminate those waiting times…if they as a society were that aggravated by wait times.
The VA is a prime example of this. It is our socialized medicine and after Vietnam when we vets were being called “baby burners” and treated as the first group of soldiers that ever lost a war, the VA became scandalous.
http://economistsview.typepad.com/economistsview/2006/08/va_hospitals_vs.html
Until the early 1990s, care at VA hospitals was so substandard that Congress considered shutting down the entire system and giving ex-G.I.s vouchers for treatment at private facilities. Today it’s a very different story. The VA runs the largest integrated health-care system in the country… And by a number of measures, this government-managed health-care program … is beating the marketplace.
I respect the word provocative and have no problem if some of you feel provoked. Some of us however simply look at this as viewing what is on the way in the future, like it or not. Otherwise healthcare not simply Medicare/Medicaid will bankrupt us…as indeed it’s already doing to about a million annually according to a study released by the AMA.
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RUK, what did you think of my description of visits to the VA Hospitals [in SA, Temple, and Dallas, TX, and Durham, NC]? Is that like your experience?
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I am only a two year Vet and normally do not qualify for VA care…however during one period of my life I was between careers, marriages and destitute. I spent some time at the James A Haley VA hospital in Tampa. I was glad I had saved a copy of my DD214.
Your description is interesting. I never thought about the motivation of patients…but I think you might have a point there. We certainly all had a bond as Vets that no private hospital could match…whether that helps their efficiency..I can’t say. I was very pleased with the way I was treated..and the visit was very successful.
Nova would perhaps wish me to point out that the VA does have a distinct advantage in that they don’t fall under the EMTLA and so they are not providing care to the general public. But a poster on another blog claims that uncompensated ER care only represents about 2% of healthcare spending.
BTW for those who may despair that a well educated, handsome, urbane man like me would ever be on the dole….fast forward about six years. My income tax refund came back with a large deduction…for…the James A. Haley VA hospital. In addition I can confess to using a Government retraining grant to secure employment when my broadcasting career came to an ignominious end. Again that “investment”/ ripoff” depending on whether you view Gov’t spending like Scott or me…has paid off..I went from paying little to no taxes to paying an ever increasing amount of taxes which have now far exceeded what I received from the Gov’t.
Maybe this is when I began “my epiphany”. Remember, when I was Nova’s age I felt exactly like NOVA…I voted R as recently as GWB’s first term….but I guess all of us are affected by our life experiences…now I’m an obnoxious screaming libtard! LMAO
BTW Mark…that link will lead to you to some interesting reading on the subject of the VA compared to the private system.
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First off, Americans are convinced that a large number of things the government does, they do inefficiently, not “everything” (he is obviously wrong on that). Secondly, in many cases, I don’t particularly care if the government could potentially do it cheaper – I would prefer that they not do it because they should not be doing it in the first place, either constitutionally or by virture of my principles of limited government.
But getting to his point where I am obviously wrong, for me to challenge the claim there would have to be some proof of the claim…more than “The total government outlay is almost exactly the same in the US and the UK at 8.2 per cent of GDP….Americans could have universal coverage and a healthcare system no worse than the British.”
Even assuming we want universal coverage, British-style health care and government intimately involved in your health care decisions, this does not ‘prove’ that government can run healthcare more efficiently than the private sector, The main reason is that current healthcare, which is what Bartlett is comparing against, is not run by the private sector and purely market driven. It is a combination of a lot of things public and private. He makes a point that the option of a completely government-run health system was never seriously considered in the US when the Affordable Care Act was debated in 2009. It was debated…at least a lot more than a completely private sector run health system.
He also points out that Americans spend 17.4 percent of GDP on healthcare, approx 5% more than other developed countries. Where did that extra 5% go? All the “extra” money we spend on healthcare goes somewhere and a lot of it goes to fund innovation, new drugs, new techniques, new studies, etc., the benefits of which are reaped by medicaid, medicare, and people the world over. As we know, the price of prescription drugs is higher in the US than in most other countries. What would happen were we to put price controls on drugs like in other developed countries? Would there be the same innovation? Hard to say. The question I have is would our price come down if the other countries removed their price controls? What is British healthcare and would Americans be happy with it? Why did Adele have her voice surgery in the US and not Britain? If things are so grand in Britian, why don’t Americans hop on planes and have their high cost operations over there? I don’t pretend to know what British healthcare is like since I have not had first hand experience. It could in fact be better than ours if one could actually quantify better.
But again, I could care less about Britain or France or where ever. The idea of the government forcing me to buy insurance is something I will never, ever grow to like. And Bartlett spouting out a few misleading stats does nothing but add to a disengenuous argument.
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Dave
But again, I could care less about Britain or France or where ever. The idea of the government forcing me to buy insurance is something I will never, ever grow to like.
Putting aside the individual mandate…which was certainly not my choice either..it was after all a Republican idea…are you against simply expanding Medicare to cover everybody? That of course is funded by a tax…not a requirement to buy something from a private company.
And of course I understand that you could care less about Britain or France…me neither..they are just examples that perhaps hold some lessons for us…but how much do you care for your fellow Americans? If someone is working 60 hours a week driving a cab or waiting tables IE we’re not talking dead beats here…should they at least rate health care coverage? Just curious?
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Apologies for the entire bolding…the must have dropped down on me..sorry.
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ruk – “but what about the long waits and the rationing…what long waits and what rationing they replied.”
That must have been fixed in 2007 when Canadian Prime Minister Stephen Harper announced that all ten provinces and three territories would establish patient wait times guarantees by 2010. Odd that he would feel the need to do that if there were no wait time issues.
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“are you against simply expanding Medicare to cover everybody?” Yes.
“but how much do you care for your fellow Americans? If someone is working 60 hours a week driving a cab or waiting tables IE we’re not talking dead beats here…should they at least rate health care coverage? Just curious?”
Who says they don’t have health care coverage? They may or may not be covered by an insurance plan with their work. They may or may not be covered by their spouses or family’s insurance plan. They may or may not be able to afford private insurance. Not having insurance in no way bars you from medical services. Me, you or any of those people can see a doctor or go to a clinic paying out of pocket. My wife and I do that now. Yes we have insurance but the doctor we visit does not do insurance. Again, it is insurance – not access to healthcare.
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More specifically on my “Yes”. Currently, Medicare’s unfunded obligation over the next 75 years is $3 trillion. The GAO lists Medicare as a “high-risk” government program in need of reform, in part because of its vulnerability to fraud and partly because of its long-term financial problems. Fewer than 5% of Medicare claims are audited. For Medicare Part A only, according to the latest estimate by the Medicare trustees (2011), the trust fund is expected to become insolvent in 13 years (2024), at which time available revenue will cover 90 percent of annual projected costs. Total Medicare spending is projected to increase from $523 billion in 2010 to $932 billion by 2020. From 2010 to 2030, Medicare enrollment is projected to increase from 47 million to 79 million, and the ratio of workers to enrollees is expected to decrease from 3.7 to 2.4.
Medicare is a significant challenge as it stands now. I think expanding it to cover everyone is a bad idea.
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Coming to an IPAB near you?
http://www.telegraph.co.uk/earth/earthnews/9184693/Surgery-bans-elderly-patient-over-her-carbon-footprint.html
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Troll, IMHO the fear-mongering about IPABs is not necessary. I think we all get that they scare you. I did read your link and had to laugh. Do you think that isn’t already happening in the U.S. by private physicians? I have personal anecdotes that it is.
Dave!, people who do not have insurance pay considerably more for healthcare services because they do not get the benefit of the negotiated insurance rates. A close friend and I not long ago had similar services about the same time at the same facility. We were stunned to realize that she (uninsured) was charged over four times the amount my insurance company was charged. How would you address that situation?
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Okie,
I’ve no fear of the IPAB as it, nor Medicare, will exist by the time I hit whatever the eligibilty age gets raised to.
I just think it’s a hilarious story and indicative of the concept of centralized authority.
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Troll, sorry, I read into when perhaps I should not have about IPAB. But my point is that I find the story indicative of nothing and certainly not “the concept of centralized authority.” Private physicians here “fire” patients. I don’t see what distinguishes your story or supports what you assert.
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Okie
people who do not have insurance pay considerably more for healthcare services because they do not get the benefit of the negotiated insurance rates.
Indeed!!! I sometimes wonder about posters life experiences because the ignorance (not pejorative but literal) is amazing.
Like a few more examples of what you cite. My wife and I were paying 20,000+ annually for our United policy with 4,000 deductibles across the board. BTW we are fortunate to have our health..we are also proactive..exercise diet..point is that was with no preexisting conditions.
United did not spend the first penny on us for six straight years. But that negotiating power you describe is what we had to pay for…my wife got an MRI on her knee…charge $1,000 but wait..United only pays the provider $250 and so that’s all we had to pay. I developed a sore throat and since my father died of throat cancer..a pack a day of Salems…even though I don’t smoke I immediately went to the throat specialist. She looked at me for approximately 5 minutes…and said..you don’t have throat cancer, just a bad case of acid reflux..a simple prescription fixed in in a couple of days. The bill for that 5 minute visit…$475…holy shirt I said to the receptionist..even though we have United insurance…oh no I didn’t realize she said…that’ll be $150.
I honestly do not know what world some of these folks inhabit.
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Hi, ruk. Glad you’re back. I’m a bit distracted at the moment watching OKC at Miami. Grudge game?
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Good luck Okie…Lebron and the guys have been playing well but your guys seem to be the emerging power in the West..especially with the Lakers in such disarray. I can understand your excitement.
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I have found the outrageous prices charged individuals one of the more egregious problems with our current system. Not only is pricing capricious and non-transparent but those least able to negotiate are soaked the worst. For no other reason than bargaining power, exchanges would be a good idea.
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For no other reason than bargaining power, exchanges would be a good idea.
Which gets us back to putting open enrollment in the Fed Employee Plan on the table if ACA is struck.
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yjkt, if this site had a recommend button, I would use it on your comment.
ruk@ 6:19pm: Bob Dylan was popular in his time for a reason, no?
And Thunder blew an 11 point lead to be down by 1 at half. But they’re at Miami, so okay. They are pretty awesome this year and getting better all the time. I’ve only been able to go to one game this season, darn.
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mark, exactly! So who besides commenters on off the wall political blogs is thinking about having a Plan B? Caveat: Plan B other than “no plan” or “repeal and don’t replace.”
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Okie – “We were stunned to realize that she (uninsured) was charged over four times the amount my insurance company was charged. How would you address that situation?”
I wouldn’t address it. Yes, you have the bargaining power and get the better price due to your insurance. But you also pay your premiums for your insurance. Your friend sans insurance did not pay the premiums. People who pay for insurance are paying for the barganing power and better prices. I am not sure that I see anything wrong with that picture.
ruk – “I developed a sore throat…even though I don’t smoke I immediately went to the throat specialist. She looked at me for approximately 5 minutes…and said..you don’t have throat cancer, just a bad case of acid reflux..a simple prescription fixed in in a couple of days. ”
Just for a point of reference, my doctor who does not do insurance, would charge me approx $90 for a visit if my throat was sore. She is IM and not a throat specialist but I feel fairly confident that she would be able to make that diagnosis as opposed to going a throat specialist. My complete physical with her is less than $450. Maybe doctors that take insurance need to make up the difference with non-insured patients. If you are without insurance, perhaps the wise move is to find a doctor that does not deal with insurance. In any case, my heart specialist, which does take insurance and is one of the Washington DC areas top doctors does not even charge $450 to see me (the base non-negotiated price). By my math, your throat exam and your wife’s MRI cost you $20,400+. If you directed the money you paid for insurance into an account designated for health, it would have approximately $138,500+ (plus interest one would hope). While I know there are things that would cost a lot more than that, that can cover a lot of medical issues.
I would also like to think I am not ignorant on the matter. I have had no insurance, HMOs, PPOs during my 47 years. I have some health issues as well as having had open heart surgery (on an HMO!). I have utilized my share of health care with a number of different plans (and no plans) over the years. Feel free to ask me about my world if you have questions on it.
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“I have found the outrageous prices charged individuals one of the more egregious problems with our current system. Not only is pricing capricious and non-transparent but those least able to negotiate are soaked the worst.”
Maybe it’s the negotiated prices that are the outrageous ones, “loss leaders” if you will, don’t cover the cost of the services provided which need to be made up for via “soaking” the non-insured. In any case, those uninsured people getting soaked are not getting soaked by insurance premiums like those who are able to negotiate. I would, however, agree that they could try and make pricing more transparent.
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