Ranking Candidate Health Care Plans
John Goodman has ranked the health care plans of Edwards, Clinton, Obama, Guiliani, and Romney. The most costly were the plans for Clinton and Edwards,
Most Expensive: Clinton and Edwards. By their own reckoning their plans would cost more than $1,000 per year for every household in America. Obama, a mere piker, comes in at only half that amount.
I noted this before, that despite claims to the contrary, all of these plans to “reform”1 cost more than we are currently spending. This is pretty much a no-brainer since we aren’t going to be changing, in any substantial way, how we deliver health care, but will merely be allowing more people to have easier access to health care. Or to put it more simply, when you add tens of millions of new consumers to the government programs you get an increase in the amount of resources consumed, and that costs more money.
I also liked this comment about Clinton’s plan,
I cannot resist commenting on one more reform idea. Sen. Clinton has repeatedly stressed that insurance premiums should be totally unrelated to health status. But they are already largely unrelated. Do you suppose she intends to go all the way – allowing people (no matter how sick) to enroll in any plan at the drop of a hat? If so, the number of uninsured would double or triple. (Why pay expensive premiums when you are healthy if insurance is always available once you get sick?) The problem with grading her plan is: do we take her statements seriously?
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1Yes, reform is in scare-quotes since nobody is actually advocating reforming health care, but instead all plans are a mish-mash of subsidies, mostly for the middle class.
I still think one of the best ways to reform healthcare is to divorce it from employment, and to allow for more picking and choosing of risk and coverage.
That’s why I think that, if you’re looking for a government-based solution to the healthcare problems that we really do face, universal coverage is at best a stalking horse while single-payer is a reasonable solution. At least with single payer there’s a possibility that some of the inefficiencies of the present hybrid system can be wrung out.
The rationale for universal coverage as a cost-saving measure relies on two assumptions, both of which I think are pretty shaky. The first is that the insurance companies are incurring substantial costs figuring out ways to disallow coverage. That’s the reason for the harping on “adverse selection”. I know insurance companies. It ain’t true. Not that they don’t disallow but that it’s a major cost area and there are substantial efficiencies to be arrived at that way.
The second is that by using relatively less expensive primary care providers rather than relatively more expensive emergency room facilities efficiencies can be realized. That presumes that there excess capacity among primary care providers. There isn’t, at least not at the scale needed and not in the places where it’s needed. The PCP’s will just send their patients to the emergency rooms. That’s already the case here in Chicago if you’ve got a problem that won’t wait a couple of weeks even without universal coverage which, as Steve notes, will at the very least increase demand for the services of PCP’s.
My problem with single payer health care is that wherever you look it isn’t doing much, if at all, better than here in the U.S., IMO. If you are going to do something, I can’t help but think it has to be simple. Such as just me noted, divorce insurance from employment, have the government give everyone a subsidy*, then let them pick which insurance plan they want.
*This will be the most complex part, but still can be relatively simple. Make it a function of income so that as one’s income goes up the subsidy decreases by a smaller amount than the increase in income. Then to make sure that the subsidy isn’t increased due to political considerations require a super-majority for increasing the size of the subsidy.
Relative costs vs. absolute costs. Single-payer systems (like Germany; France is nearly single-payer) costs are rising, too, but their absolute costs are lower. My point is the cost of private health insurance. Health insurance administrative costs presently comprise something like 30% (31% according to the frequently-quoted JAMA article) of the total healthcare cost pie in the U. S. According to the same article they’re something like half that in Canada, a pretty fair comparison since we’re societally pretty similar. That suggests to me that at least some savings could be wrung out of that slice.
But I don’t see any way that universal coverage will pay for itself or that even adding the tax cuts it will cover universal coverage.
The problem I have with the “divorce insurance from employment” notion is that, as in the punch line to the old joke, we can’t get there from here. I think it’s politically impossible.
However, I think a lot of folks on both sides of the issue are taking a “the worse the better” attitude, thinking that they can force their preferred policy out of the collapse of the present system. Ain’t gonna happen. If we wait to reform until the present system collapses, we’ll end up with a Soviet-style plan with command prices. And shortages.
I think part of the reason for this is that the costs are pushed back on the individual. If a person has to wait in discomfort or less mobility for 3 months that is a cost to society, and external one.
But how much of that is actually necessary for providing real insurance? If I’m going to provide insurance I’d want to know relative risks so I could offer the “correct” premiums. A government doesn’t have to worry about that, it merely covers everyone, and when costs get too high they send people to waiting lists which cost nothing from a budgetary perspective.
Color me skeptical of these claims.
If that is the case, then eventually the unsustainable trend will fix itself…most likely in a very, very ugly manner.
That is where I’m putting my money. Politicians are by their nature venal and cowardly.
Not only that, their costs are rising at a slower rate. Both of these statements are also true for almost all* Western industrialized nations regardless of whether their universal coverage is via single payer or some other mechanism.
Not the case in Germany or France. Really only the case in the UK and less often in Canada.
Please explain how that explains away the US system paying half again to double the rate of administrative costs of other systems. BTW France self reports administrative costs at about 3%, but Dave thinks it is closer to 12%. Administrative costs in Germany are reported at about 20%.
We are currently spending over 2 trillion on health care. Reducing administrative costs from ~30% to ~25% would save over 100 billion dollars. That would go a long way towards paying for additional coverage.
* If memory serves all but Luxembourg. I can track down the cite if wanted.
For a more balanced look check the National Journal article he contributed to.
Why did the other reviewers disagree with Goodman so much? His answer, they don’t read his blog enough.
His favorite plan a refundable tax credit that will pay a little over half the typical yearly health insurance bill and simultaneously removing all other health care subsidies.