Some Observations On The Debate Over Health Care And Insurance, Part II

Part Two in a series of observations about health care and health insurance in light of the introduction of the House GOP's health care plan. This post examines several ideas advanced by conservatives, and the reasons they aren't complete answers to the problems we face.

Caduceus

This is Part II of the post I started last Friday. This time, I’ll address some of the most popular reform ideas advanced by conservatives.

4) The assumption that we can “return” to a free-market health care system assumes we ever really had one.

Conservatives like to talk about “returning” to a system where the health care industry was more market based, with the idea being that doing so would make providers more responsive to supply and demand and consumer choice than they are today. On its face, there’s nothing wrong with this idea, but it’s’ far easier said than done. For one thing, contrary to their apparent belief the system we had prior to the PPACA was far from a “free market” system and it was far from perfect. Much like what existed after the PPACA, it was one in which prices were set and decisions were made by insurance companies rather than patients and there was little that patients could do to control prices. Additionally, it was unsustainable due to the fact that prices were spiraling out of control, as they still are today, and the system was in danger of just collapsing altogether. This is why Republicans who think we can simply repeal the PPACA without replacing it with something that addresses the very real problems that existed prior to its adoption in 2010 are simply wrong.

Additionally, it’s worth noting that the PPACA replacement being promoted by House Republicans, the American Health Care Act, is far from being a “free market” reform in its own right. Even if were adopted in full in its present form, the government would still maintain a dominant, if not predominant, role in the health care industry, and it’s likely that this will be true even if there are changes made to the bill to appeal to conservative Republicans currently opposed to the bill. Partly this is due to the huge amount of influence that programs such as Medicare, Medicaid, the Veterans Administration, and the health insurance system for retired military give Washington a tremendous amount of leverage, leverage that simply isn’t going to go away. This is especially true given the fact that several of these programs, such as Medicare and Medicaid, are hugely popular with the public as a whole and simply aren’t going to go away. Given that, discussions about a “free market” in health care don’t make much sense.

Finally, as one Republican argues in a recent Forbes article, there’s a good case to be made that health care is not an industry where a “free market” is even possible:

Health care is not a market. It lacks any of the vital features of a market. Treating health care like a market means living and dying without modern medicine. To advance a culture based on opportunity rather than government dependence, we need an alternative to state-owned health care that keeps key decisions in personal hands, preserves market triggers where appropriate, and rids us of the strangling influence of the massive federal bureaucracy. Republicans cannot do this without abandoning some cherished fantasies about the unquestionable, divinely-ordained righteousness of markets.In a free market, goods and services are allocated through transactions based on mutual consent. No one is forced to buy from a particular supplier. No one is forced to engage in any transaction at all. In a free market, no transactions occur if a price cannot be agreed.

In a free market, goods and services are allocated through transactions based on mutual consent. No one is forced to buy from a particular supplier. No one is forced to engage in any transaction at all. In a free market, no transactions occur if a price cannot be agreed.

The medical industry exists almost entirely to serve people who have been rendered incapable of representing their own interests in an adversarial transaction. When I need health services I often need them in a way that is quite different from my desire for a good quality television or a fine automobile. As I lie unconscious under a bus, I am in no position to shop for the best provider of ambulance services at the most reasonable price. All personal volition is lost. Whatever happens next, it will not be a market transaction.

(…)

Modern health care with all its fancy instruments, amazing methods, and success in extending life and happiness only exists because we started abandoning the free market in medicine a century ago. Go back to paying your doctor with chickens and your doctor will go back to being a part-timer who learned his craft from a book so he could augment his income from blacksmithing.

Does that mean we will eventually have to submit to a fully nationalized, single-payer health system controlled entirely by the federal government? No, the developed world includes a kaleidoscope of different approaches to health care from single-payer to almost exclusively private. They generally deliver better care at lower cost than ours. Alternatives to our broken system are proven, established, and readily available. So far, Republicans have refused to even look at them.

In addition to these aspects of health care that make it difficult to argue that a true “free market” is possible, there are other

Instead of looking at real solutions, of course, we get things such as the American Health Care Act, which seemingly combines the worst aspects of the Affordable Care Act and the status quo that existed before it to create a system that it still does not deal with the very real problems that existed prior to 2010 any better than the PPACA did. Meanwhile, they give lip service to the idea of a “free market” in health care while ignoring the very real problems that will continue to exist even if they did everything they want in 2017. For example, there are many health care transactions outside of emergency care where traditional price-shopping simply doesn’t exist. Someone who is diagnosed with cancer, for example, isn’t going to price shop for a doctor and a treatment when the fact of the matter is that they don’t possess the expertise necessary to judge one oncologist from another. The same goes for other specialties. Given that, and given the fact that it’s difficult to predict up-front what cancer treatment or treatment for heart disease is going to cost, the idea that a patient can realistically price shop when their life is on the line is incredibly simplistic.

To be fair, there are some situations where this kind of price shopping can work quite well. In non-emergency situations, it’s relatively easy to shop around for a doctor, and physicians ought to encourage this by being more upfront about their pricing, especially for people without insurance. It works for eye doctors and plastic surgeons, both of whom work in specialties where insurance coverage is rare, to say the least, so it could work for general physicians and other providers of non-emergency care. Beyond that, though, the idea that all we need to do to fix health care in this country is make it more like the free market seems naive, to say the least.

5) Health Care Savings Accounts are a solution, but not a panacea.

One of the most sensible solutions to the health care/insurance problem is the introduction of Health Savings Accounts. However, this kind of plan assumes that people have sufficient disposable income to contribute to such accounts and that they will do so. That’s simply untrue for people who are lower middle class or poor and doubtful for many in the middle class. At the very least, an effective HSA would have to be one that had a large enough balance to cover whatever it might be that isn’t covered by health insurance itself. Most reform proposals that include an HSA provide for insurance, of course, but it would be an insurance policy that generally only provides catastrophic coverage for events such as surgery, hospitalization, and diagnostic testing. Patients would be responsible for most payments for routine medical care, as well as ordinary prescription drugs, although the treatment of prescriptions varies depending on what plan you’re looking at.

On the surface, this seems like a great idea. The law would give consumers the right to establish an HSA which would be treated similarly under the law to an Individual Retirement Account, meaning that contributions would be tax-free and withdrawals would be as well as long as they were used for a valid health-related reason. Consumers could choose how to invest the account, which means they could choose the safety of a Federally guaranteed bank account with a low rate of return or a mutual fund that invests in the stock and bond markets. The problem with an idea like this, though, is the fact that people are unlikely to invest in an HSA unless they can afford to do so, and they’re likely to contribute only a minimal amount depending on the cash flow they have left over after monthly expenses. As it stands, we live in a world where most Americans are not fully funding their retirement. Do Republicans really believe that many people outside the upper middle class are going to be able to afford to set aside hundreds of dollars a month, and thousands a year, for future health care expenses when they’ve got rent or a mortgage to pay and kids to feed? If they do, then they’ve completely lost touch with reality.

As a part of an overall reform plan, HSA’s make sense as an option people should be able to choose if they want to. Making them mandatory, however, or expecting them to solve everyone’s health care and insurance problems is quite simply expecting the impossible.

7) Allowing insurers to sell policies across state lines is unlikely to have a real impact on insurance affordability or availability.

Along with the ideas of a free market in health care and Heath Savings Accounts, one of the most popular health care reform ideas on the right is the idea that insurers should be able to sell insurance across state lines. The idea behind this proposed reform, obviously, is the idea that it will lead to increased availability of insurance, increased competition, and lower premiums for consumers. In reality, while it could reduce costs to some extent it is unlikely to have much more than a superficial impact on premiums and could end up promoting practices that increase costs for consumers.

Before discussing this any further, it’s worth noting that health insurance companies are already allowed to sell policies across state lines. There is no Federal law barring this from happening. In fact, many of the nation’s top insurance companies sell policies in more than one state. The barriers that do exist are a matter of both state laws regulating insurance and the realities of the insurance market. While the first could be taken care of easily assuming that states are willing to reexamine their laws in this area, dealing with the second is a much different issue, much harder to overcome, and not something that any legislation can deal with.

What I mean by the economics of the industry is fairly straight-forward. Under our current system, insurance companies create networks of providers (physicians, laboratories, hospitals, Urgent Care Centers, etc) that they negotiate prices with to create what end up amounting to uniform billing schedules. It’s an economy of scale that makes it possible to operate something as large as a multi-million dollar insurance company in a modern economy. Without that market, it doesn’t matter where insurance companies can write policies. And without that pre-existing uniform billing schedule, there would have to be a lot more scrutiny of individual bills by insurance companies who would necessarily be unfamiliar with billing customs in states other than their state of origin. As it stands, there are insurance companies in states such as Pennsylvania who write policies in Philadelphia and the eastern part of the state but do not have networks, and thus do not sell policies, in Pittsburgh and the western part of the state. This is also true in other large states such as Florida, New York, California, Texas, and Virginia. In other cases, some companies don’t offer policies in some parts of their home states simply because it isn’t profitable to do so. Given this, saying that insurance should be sold ‘across state lines’ isn’t likely to lead to nearly as much competition as some people think.

In addition to likely not promoting competition to the extent conservatives think, making it easier to sell insurance across state lines is likely to decrease competition among insurance companies by promoting mergers and the creation of larger insurance companies capable of dealing with the costs of doing such business. If that happens, then consumers in some states could see themselves facing fewer choices for insurance rather than more choices.

I’ll end the post here since we’ve already run on fairly long. In my next post, which should be the last, I’ll talk about possible reforms that borrow from both liberal and conservative ideas. Whether we’ll ever be smart enough to come up with an agreement on this issue, though, is another question.

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Some Observations On The Debate Over Health Care And Insurance, Part I

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Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.

Comments

  1. MarkedMan says:

    Doug, that was an excellent post. I think you captured the dynamics and realities very well. I would only add that while I believe you are right in stating that it is questionable whether or not you can ever have a free market health care system as a whole, I think Obama are has demonstrated that you can target individual facets with free market incentives with good effect. For example, forcing hospitals to eat the cost for their own mistakes has worked in bringing down hospital acquired infections and reduced preventable readmissions. There was no mandate in what the hospital needed to do, so ten thousand different combinations of process and technology changes were tried in ten thousand different hospitals. Comparisons were made and efforts adjusted and most succeeded. But for a small percentage of poorly administered hospitals it might well have been the straw that broke the camels back and caused them to sell out to a national player or close their doors altogether.

  2. Eric Florack says:

    This from the same group of people that suggested if you like your doctor you can keep your doctor or at least those who trusted then which were saying it.

    Look around you. The evidence is Legion That government based Healthcare simply does not work. So the question becomes at what point did Democrats stop arguing for it?

  3. gVOR08 says:

    I’ve seen several writer’s reference Kenneth Arrow, Uncertainty and the welfare economics of health care, including Dr. K. The paper, from 1963, argues that health care can not work on a free market basis. Dr K two key issues: “One is that you don’t know when or whether you’ll need care – but if you do, the care can be incredibly expensive.” and “The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. (“I hear they’ve got a real deal on stents over at St. Mary’s.”)” I don’t know why we even talk about free market health care. OK, it’s an article of faith on the right that free markets are the cure for everything. But anyone paying attention (and not ideologically committed) has known for fifty years it won’t work in healthcare.

    And why can’t we look at the rest of the world, where we have the most expensive, and least effective, health care in the developed world. Why not look at what works and copy it, ferchrissake? It’s hard to think about this stuff without cursing Republicans.

  4. reid says:

    @Eric Florack: As usual, you are 100% wrong. Look at the rest of the world for models as to how health care can and does mostly work well with government involvement.

  5. Mikey says:

    @gVOR08:

    we have the most expensive, and least effective, health care in the developed world

    That’s what gets me. Are people simply unaware America pays double per-capita to provide health care?

    Even if our health care were “the best in the world,” is it really TWICE AS GOOD as everyone else’s? Because it costs us twice as much.

    Maybe that’s the direction we need to go in our discussions. “Hey, did you know we Americans pay twice as much for the same thing as everyone else pays? What’s that thing? Why, it’s health care!”

  6. gVOR08 says:

    @Eric Florack: Amazing. You get one BS talking point and beat it to death for years. (A. Doctors are largely interchangeable. B. I still have mine, most people do.) Your second paragraph sounds like something Sean Spicer would say. If the evidence is Legion, look around the world and cite some. And please come up with something new, that hasn’t been repeatedly debunked in these threads.

  7. Bokonon says:

    The real reason for the bad fit between the policies and solutions is that this isn’t really a piece of health care legislation at all. It is tax cuts first and foremost, and deregulation second. Health care is just what it IMPACTS.

  8. gVOR08 says:

    @Bokonon: Exactly. Part of the trap the Rs are in is that they don’t think the Federal Government should do anything to provide health care, but they know they can’t say so in public.

  9. Scott says:

    While the first could be taken care of easily assuming that states are willing to reexamine their laws

    I may be wrong but I think the concept of selling across state lines is based on the nullification of individual state insurance regulations. A Texan buying a policy regulated by Mississippi has no consumer rights regulated by Texas. The laws would preclude Texas from getting involved. The defrauded Texas consumer will have to seek recourse from the regulatory authorities in Mississippi. It is the opposite of state’s rights. And it will be very caveat emptor. And probably a race to the bottom.

  10. Grumpy Realist says:

    @Eric Florack: speaking as someone who has lived in both Japan AND in England, I can tell you that a government-operated healthcare system can work jolly well.

    I’d much rather be under the Japanese NHS than the ridiculous fiasco that exists in the US.

  11. MarkedMan says:

    @Mikey:

    is it really TWICE AS GOOD as everyone else’s? Because it costs us twice as much.

    The answer to this is well known. The US healthcare system, when measured by outcome, is no better than the rest of the developed world – for people who have healthcare coverage (Mcare, Mcaid, Vets or private insurance. ) For this without, it is significantly worse. And since we have a significant percentage of population that are not covered while all other developed nations have universal coverage, things like average life expectancy and average infant mortality are measurably worse in the US. All that for twice the per capital spend rate.

  12. MarkedMan says:

    Oh, and as an addendum to my above post, “twice” the spend rate is, measures one way, really in a range from 1.4x to 2x depending on the country. But this is really easy to improve on. Bottom line: by going to a rational single payer system we would immediately be on par with the worst of the developed countries. How? Here’s the math:

    It is a fair bet that 35% of private insurance goes towards administering it, at the insurance company or at all the providers. And something like 65% of our spend goes through private insurers ( for those who follow this closely I realize it is just short of 50% of hospital billings but remember that doesn’t cover all of what employers and individuals actually pay). So if we went to a program like the Netherlands we would cut that down to 3-5%.

    Bottom line: by going to a rational single payer system we would immediately be on par with the worst of the developed countries.

  13. DrDaveT says:

    As before, a few quick points:

    1. It might be useful to compare health care with other “free market” goods that cannot be substituted away from — food, water, shelter. How do we deal with people who can’t afford them? Is that a good solution? How important are the differences between the need for food and the need for healthcare — namely, that you need food in small amounts all the time, but (might) need healthcare in huge amounts every now and then.

    2. I don’t understand the fascination with Health Care Savings Accounts. By definition, they only apply to people with excess disposable income, and so do not address the fundamental problem at all. Sort of like 401(k) plans in that regard. You cannot fix any poverty-based problem by giving tax breaks — unless they are one of the badly misnamed “refundable tax credits” like the Earned Income Tax Credit that are really direct subsidies disguised so that Republican legislators don’t have to admit to voting for welfare programs.

    3. Are we handicapping ourselves by thinking of this as ‘insurance’ in the first place? That’s a natural way to think about occasional catastrophic needs, but the plain truth is that everyone needs ongoing low-level healthcare too — and that this can prevent the catastrophes. We don’t talk about “food insurance” or “housing insurance”; we directly subsidize food and housing.

  14. steve says:

    HSAs are, in practical terms, just high deductible insurance plans. You are able to save to pay the deductible, if you have the disposable income to do so. They are a good way for relatively healthy and younger people to save money.

    Selling across state lines with the same insurance product is already legal in 6 states. No insurance company has opted to do so. Barrier to entry costs are the determining factor.

    As to a market based approach, I would agree that in general when markets are appropriate, they are the most effective approach. However, no one has figured out how to make markets work in medicine. Eye doctors and plastic surgeons work when you are having medical care you don’t really need. (Note that we are really talking about Lasik for eye surgeons, and insurance pays plastic surgeons for reconstructive surgery.) I think that one of those hard core red states should give a pure market approach a try and lets see how it works.

    Steve

  15. Gustopher says:

    If HSAs only make sense for the upper middle class and the wealthy, why have them at all? They just become a tax shelter, and do nothing to solve anyone’s health care problems.

  16. Davebo says:

    @Grumpy Realist:

    Realize you’re talking to a guy who has left his state once and only been on 2 plane rides his entire life.

    Waste of energy.

  17. Just 'nutha ign'int cracker says:

    @Davebo: Actually, Florack was a long-haul driver for some years. His earliest blogs were posts about life on the road interspersed with hair-shirt conservative bloviation; except for the bloviation parts, a lot of the posts were pretty interesting. Still, your general point about his ability to consider Grumpy’s argument is appropriate enough.

    Do Republicans really believe that many people outside the upper middle class are going to be able to afford to set aside hundreds of dollars a month, and thousands a year, for future health care expenses when they’ve got rent or a mortgage to pay and kids to feed?

    I don’t see any reason to believe that they do, but then again, I didn’t believe that they were thinking about the single mom who was cleaning the toilet in the washroom of their office when they came up with childcare tax credits either, Their thinking was probably more along the lines of “wouldn’t it be great if I could figure out how to write off all the day care charges we have now that my spouse took that lobbying job on K Street?”

    On the health care market question, my econ professor used to say that (the?) two primary functions of markets were to deal with shortages and correct surpluses. He used to joke that subsistence farmers and hunter gatherers had very limited market needs. But the theory does address one primary flaw in the notion of health care as a market–there aren’t really surpluses in any meaningful way. Hospitals don’t have clearance sales on soon to expire morphine or stents as someone noted earlier and on the other side, while the market will eventually address a market shortage–someone else will take training (or claim they have in a “true” free market) and set up shop, but not necessarily in an efficient time frame. But, as most of us have noted, the bill under consideration is not about health care anyway

  18. Pch101 says:

    @reid:

    If Florack is only 100% wrong, then he has made remarkable progress.

    I’m sure that my backyard wall and my neighbor’s dog both know more about healthcare economics (and for that matter, just about everything else) than he ever could.

  19. grumpy realist says:

    @steve: LASIK is also extremely automated. Yes, the person using the contraption can screw up your eyesight, but it’s not the same as a brain surgeon going in with a diamond scalpel.

    (I had LASIK done on me when I was living in Japan and for some odd reason they insisted I read the technical brochures of the gadget as well as getting a full rundown on the probabilities of the medical results.)

  20. Jen says:

    The “we have the best healthcare in the world!” drives me a little nuts when there is so much data available to disprove that statement. Just yesterday there was a piece on CNN that discussed how Americans with cystic fibrosis die, on average, 10 years earlier than their Canadian counterparts. Maternal mortality in the US is actually rising, counter to worldwide trends.

    We do not have the best healthcare in the world, we have the most expensive. That Americans continue to confuse pricey with good is frustrating.

    Good post, Doug, and the link at the Forbes piece was interesting to read in full.

  21. Daryl's other brother Darryl says:

    @Eric Florack:

    The evidence is Legion That government based Healthcare simply does not work.

    So not only are you an abject racist…you’re a dumb fwck too. (Maybe that’s redundant.)
    Most developed nations have Government based health care, and it works far better than our system. Medicare and medicaid work damn well, and far more effectively than the rest of the US insurance market. And you don’t hear your congress critter complaining about their government provided health care. Hell, the only reason Dick Cheney is still alive is because of government provided health care.
    Everyone should go to Florack’s web-site and search the N-word.This old fool is ignorant and a bigot.

  22. KM says:

    As it stands, we live in a world where most Americans are not fully funding their retirement. Do Republicans really believe that many people outside the upper middle class are going to be able to afford to set aside hundreds of dollars a month, and thousands a year, for future health care expenses when they’ve got rent or a mortgage to pay and kids to feed? If they do, then they’ve completely lost touch with reality.

    HSAs are an extremely elitist concept. You need to have excess income in order to make them work, something Joe Schmoe doesn’t have. Hell, even $15 a paycheck bimonthly is too much for some people and that’s only $360 a year – a pair of glasses, some bloodwork or a specialist’s visit pre-deductible. $20 a week totals out to less then a grand, a third of your deductible if your lucky. Someone making less then $50K with a mortgage and kids will not have a spare benjamin to toss into an account that locks that money into medical spending – what happens if they put away that three hundred, nobody gets sick but the car bites it?

    Why middle and rural America are not up in arms screaming about the condescension inherent in this idea is proof of how good Republicans are at conning people. They are literally telling people if you can’t save up enough, you don’t deserve decent care. For the working class, this is a massive slap in the face and an unobtainable goal. Why are they just standing there and taking it – because Trump’s the one bitchslapping them instead of Hillary??

  23. al-Alameda says:

    @MarkedMan:

    So if we went to a program like the Netherlands we would cut that down to 3-5%.
    Bottom line: by going to a rational single payer system we would immediately be on par with the worst of the developed countries.

    I believe that Switzerland regulates the profit to insurance companies that provide/sell the national health plan coverage is 4-5%.

    I have come to believe that about half of Americans buy into the notion that Americans do not deserve a socialized single-payer health insurance plan until they’ve reached their Medicare eligibility age. Until then, show some initiative (insert standard empty conservative platitudes) and hang on until you’re 65, and finally, hope (pray if you like) that Republicans don’t convert Medicare to a voucher-based system that shifts the cost burden to retirees.

  24. KM says:

    @Mikey:

    Even if our health care were “the best in the world,” is it really TWICE AS GOOD as everyone else’s? Because it costs us twice as much.

    The idiots think they can drive the price down to Costco levels through the magic of the free market. Seriously, they think they can drop a doctors’ visit down to what a copay is as the regular price.

    One of their talking points is insurance drives up prices and you can negotiate a better deal. HOWEVER, they never mention you’re negotiating from the realm of $50K to $30K and still have to come up with the $30K in cash. These things are expensive for numerous reasons and will never be massively cheap for the people without some mechanism in the background subsiding / regulating it. Your heart surgeon didn’t go to school to do $50 surgeries. Your endocrinologist isn’t going to treat your diabetes for $15 a visit. The ambulance company would go out of business if they charged what a taxi does. If insurance wasn’t covering a large % of costs as part of the process, we’d see people dying in the streets again from sheer lack of funds.

    Again, if you don’t have a few (tens) thousands in liquid cash you can afford to burn on a moments’ notice, healthcare in this country is a frightening gamble. You are a literal heartbeat away from financial ruin because of the vagrancies of biology and the GOP is proposing to make it worse with their foolish ideology.

  25. Eric Florack says:

    What we have here is the left further conflating insurance with Healthcare.

    one does not equal the other as Obamacare proved.

    Sure everybody got insured. ( Well, they didn’t, but let’s go with the illusion the big government left would have you believe..) But just as surely when it caused a shortage of doctors wait times went up and actual Healthcare went down as it has in every other socialized medicine country.

  26. al-Alameda says:

    @Eric Florack:

    Sure everybody got insured. ( Well, they didn’t, but let’s go with the illusion the big government left would have you believe..) But just as surely when it caused a shortage of doctors wait times went up and actual Healthcare went down as it has in every other socialized medicine country.

    Do you have any understanding of how the system works in countries like Switzerland?

    The healthcare delivery system is not controlled by the government. Doctors are not employees of the government.

    The government provides the legislated national health insurance plan and the mechanism for funding the premium cost. People are free to purchase the national plan from any private insurance company, and the profit to the companies is capped. People are also free to purchase additional insurance (excess or catastrophic) on the private markets.

    QUESTION: If the America system of health care insurance and health care delivery is superior to all others (as conservatives routinely say) then why haven’t countries like The Netherlands, Switzerland, Germany, Norway, Japan, (and on and on) moved to change to an American type of system?

    Americans have virtually no knowledge of single-payer systems in other developed countries, and many people do not understand that Medicare is a single-payer system, one that is equally funded by themselves and their employer.

    We are a very dumbed down country.

  27. Daryl's other brother Darryl says:

    Sure everybody got insured. ( Well, they didn’t, but let’s go with the illusion the big government left would have you believe..) But just as surely when it caused a shortage of doctors wait times went up and actual Healthcare went down as it has in every other socialized medicine country.

    Please provide credible links that prove there is now a shortage of Dr’s in the US, that wait times are up, and that health care outcomes are worse.

  28. DrDaveT says:

    @KM:

    If insurance wasn’t covering a large % of costs as part of the process, we’d see people dying in the streets again from sheer lack of funds.

    And, of course, the corollary is that insurance can pay those costs because it collects funds from healthy people who turn out not to need expensive care. This is what drives me crazy — that people somehow think that the pool of people who can’t afford their health expenses can self-fund, without an influx of cash from somewhere else. It’s like insisting that the entire Flood Insurance program should be funded by people who have lost everything in a flood.

  29. Jen says:

    There are very, very few people who can “self fund” their healthcare. They are either extraordinarily healthy, or extraordinarily wealthy. That’s it. Even falling off of a bicycle and knocking your head can cost thousands of dollars in MRIs, the ER visit, etc.

    I’m in my late 40s, and, knock wood, haven’t spent an overnight in the hospital since I was born. Not one of my immediate family members can say the same–my parents, sister, husband, mother-in-law–all have had *at least* one overnight stay/tests/follow up visits. These range from routine (gall bladder surgery) to unexpected (car accident) to observational (suspected pneumonia in a 77 year old). The thing about insurance is that for it to work well, there need to be a lot of healthy people who don’t use at the level they pay in to balance out those who do use it.

    The fact is that almost everyone is going to need some care at some time, and as little as ONE incident can effectively negate the amount paid into the “system.” I really don’t think people zero in on how much care costs versus how much they pay in with premiums.

  30. Daryl's other brother Darryl says:

    Well written piece by Doug.
    Unfortunately it is discussing health care and insurance in the context of what is explicitly tax cut legislation.
    Free Market:
    Health Care is not and cannot be a free market. Insurers in 2015 saw nearly $586 billion from Medicare, $449 billion from Medicaid, and only $400 billion from the private sector. A huge percentage of that private sector business is subsidized thru tax benefits by the government. Capitalism has no role in your health.
    HSA:
    I have an HSA account and it’s great. For me. I fund it fairly generously every week pre-tax direct from my paycheck and, because I have hardly any use for health care at this point in my life, it is essentially just another 401K that I can use for medical bills. The money is invested…but it is readily accessible if I need it for emergency care, deductibles, or whatever. The problem with HSA’s is that, just like a 401K, it’s not a viable solution for most people who simply cannot afford to fund it.
    State Lines:
    The biggest problem with this is that the insurance companies will move to the state with the most lax regulations in order to stick it to the consumer. There is a reason credit card companies all gravitate to Delaware. So allowing them to sell across state lines will simply cause a race to the bottom. This is why Obamacare set minimum standards…as a consumer protection A lot of states are only going to care about getting insurance companies to move there; get the business and the tax base, and don’t worry about consumers getting screwed.

  31. MarkedMan says:

    @Eric Florack:

    Sure everybody got insured. ( Well, they didn’t, but let’s go with the illusion the big government left would have you believe..) But just as surely when it caused a shortage of doctors wait times went up and actual Healthcare went down as it has in every other socialized medicine country.

    These are just Republifacts. They have no basis in reality and are just whatever some random Republican thought sounded good when the words tumbled out of their mouth.

  32. gVOR08 says:

    @Just ‘nutha ign’int cracker:

    I didn’t believe that they were thinking about the single mom who was cleaning the toilet in the washroom of their office when they came up with childcare tax credits either,

    Like someone said years ago on raising the age for Social Security, I don’t expect them to be friends with the janitor, but can’t they even see him?

  33. the Q says:

    We should steal this idea from the Japanese: In Japan, every year, every employee must get a mandatory physical paid for by the government as part of their healthplan. He/she must then give a form to their employer stating they went to the doctor. If they refuse, no job…they’re fired. In this way, the Japanese believe that treating illness/disease before it becomes a huge problem is smart.

    What is completely missing from our system is prevention. Look at the huge deductibles, they encourage people to forestall getting treatment until something major comes along, which makes treatment much more expensive.

    I think every American should get a free voucher from uncle sam with a list of 20 or so basic physical tests (diabetes, cholesterol, BP, heart etc) that one must do every two years. If we just catch some of these health issues in time, we can save mucho later.

    And when do we finally ban cigarettes from being sold?

  34. rachel says:

    @Mikey:

    Are people simply unaware America pays double per-capita to provide health care?

    I’ve lived in Japan and I’m living in Korea now. Because my husband has an auto-immune disorder, diabetes, high blood pressure, high cholesterol, osteopenia, glaucoma, chronic kidney stones and he’s accident-prone, I have had extensive experience with the medical system here. I can say authoritatively that if we lived in the US, we would be beggared by the various treatments he needs to stay alive and functional. Here, we can live a comfortable life and are able to put money away for retirement.

    Furthermore, we have friends from Canada and the UK who’ve told us about their experience with the healthcare systems of their countries. Not everything is perfect there, but they don’t worry about their family members back home going blind, losing limbs, or dying due to lack of care or losing their homes the way people from the US do.

    However, even when I cited my own personal experiences (and those of my friends) to argue that the pre-ACA USA was the worst of all I knew in the first world, my parents refused to believe me.

    So I’m going say that no only are the people you are thinking of unaware of this, many of them are working hard to stay that way.

    @the Q: Here in Korea, I have to go in for a comprehensive checkup every 2 years or my employer and I have to pay a big fine. The health service also sends enrollees coupons for certain tests when they hit specific ages. “Just turned fifty-__? Here’s your voucher for a colonoscopy.”

  35. Mikey says:

    @rachel: My wife grew up in Germany, and her experience was like yours. The German system is not perfect either but it’s far superior to America’s. (Which is, needless to say, a very low bar indeed.)

    Americans are so used to the shitty system we have, and so ignorant of all the others, and so brainwashed against anything that even hints at “socialism” (even though we love a lot of blatantly socialist things), that we accept a huge amount of insecurity, for which we pay a great deal while receiving nothing in return.

    From now on when I talk to people about this issue, I’m going to focus on the double per-capita cost and ask why the hell so many Americans are OK with paying double for a system that provides at best average–and most likely worse–care and outcomes than all the other developed nations provide their citizens.

  36. MarkedMan says:

    One thing that I really like about the European healthcare model is that if a doctor prescribes something it is covered.

  37. al-Alameda says:

    @rachel:

    Because my husband has an auto-immune disorder, diabetes, high blood pressure, high cholesterol, osteopenia, glaucoma, chronic kidney stones and he’s accident-prone, I have had extensive experience with the medical system here. I can say authoritatively that if we lived in the US, we would be beggared by the various treatments he needs to stay alive and functional.

    Here in America, those conditions would result in an incredibly expensive insurance policy – with high deductibles and a low lifetime limit – if you could find an insurance company to underwrite the policy. If you’re wealthy, you might be fine. If you’re not wealthy, it’s Death Panel Time.

    I wish you two well.

  38. DrDaveT says:

    @MarkedMan:

    One thing that I really like about the European healthcare model is that if a doctor prescribes something it is covered.

    Actually, this one has some serious drawbacks. Unless you have strict controls and oversight, this leads immediately to massive overuse of antibiotics, channeling of opiates to recreational users and addicts, reduced incentives to move proven safe drugs from the formulary to over-the-counter status, etc. If there’s no cost (and possibly kickbacks) to the doctor for prescribing, and no marginal cost to the patient, this car has no brakes.

  39. Just 'nutha ig'nint cracker says:

    @rachel:

    I have to go in for a comprehensive checkup every 2 years or my employer and I have to pay a big fine.

    While I was in Daejeon, my university “discovered” that it didn’t have current health records for about half (or more) of the foreign professors. (The Ministry of Education probably had mentioned this on some occasion or another during audits the four years that I’d taught there, but it was apparently time for a Ministry of Labor audit or something.) On Thursday, I got an Email telling me that my school had made an appointment for a “complimentary health screening” at a hospital for me and 75 of my fellow faculty for Saturday at 8 a.m. and that I should arrive half an hour early to fill out forms. If we had schedule conflicts, we were “advised” that we should change our schedules as the exam was very important for our continuing employment. When I pointed out to our Korean liaison that I was leaving the school in two weeks, I was told that since the school needed the record whether I was still there or not, I really did need to go. When I lived in Daegu, the hospital used to send a clinic on wheels to the school for 3 days and students who attended from the countryside were advised to make appointments if they would like a screening.

    The bureaucracy was crazy at times. The health care was sensational.