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The history behind our current nonsensical scheme started with FDR capping wages during the great depression, which spurred companies to offer "perks" like heal

The history behind our current nonsensical scheme started with FDR capping wages during the great depression, which spurred companies to offer "perks" like healthcare to recruit talent. An example of one market intervention leading to another, and another, ad nauseam. Totally agree that insurance should be decoupled from corporations. The way the "market" is regulated hampers people from working independently or starting small businesses because it's so damn expensive for individuals to pay for healthcare themselves.

StClaire 10y ago
Kaiser of Kaiser Permanente started out making ships during WW2
AbrahamParangi 10y ago
The specifics of the American healthcare system aside, what leads you to believe that the problem is regulation? By essentially any metric, state provided (single-payer) healthcare is the best-known solution to the healthcare problem. Why is there any reason to believe that there's too much state intervention as opposed to, say, too little?
- wyager 10y ago
  > By essentially any metric, state provided (single-payer) healthcare is the best-known solution to the healthcare problem. Except things like, you know, quality of care or satisfaction. Single-payer healthcare beats the American implementation, which is not a high bar to clear. There's a reason medical tourism to Mexico and India is so prevalent. Totally deregulated private doctors seem to kick the ass of state healthcare (in quality and wait times) and American healthcare (in cost). I wouldn't want to get, say, complicated brain surgery in Mexico; in that case, the tens of thousands of dollars premium you would pay, uninsured, for US care is probably worth it. But for routine medicine (dental care, minor surgery, etc.) it's medical tourism all the way. For certain kinds of medicine, people will even make medical visits to the US from socialized countries like Canada or France.
  - lisper 10y ago
    > There's a reason medical tourism to Mexico and India is so prevalent. Yes: health care in Mexico and India is cheaper. Not better. Cheaper. > I wouldn't want to get, say, complicated brain surgery in Mexico. I rest my case.
    - wyager 10y ago
      > Not better. Cheaper. Nope, it's also better for the vast majority of medicine. Have you ever used Mexican private healthcare? I have! Customer service and convenience is through the roof compared to US healthcare. > I rest my case. Not a very good case! The reason you wouldn't want to get complicated surgery in Mexico is that they don't have as many medical specialists, or as much equipment. The US is richer and has better schooling, so we have a huge supply of experts and medical technology. For the cutting edge of medicine, the benefit of having this outweighs the costs of receiving care in the US. However, almost all medicine is simple and doesn't require a particle accelerator or superconductors or whatever else you can find in cutting-edge American medicine. I wouldn't buy a radiation-hardened satellite microprocessor from China, but I'm perfectly happy to buy a Chinese laptop!
      - mantas 10y ago
        The reason is that what you pay for "cheap" service is actually the premium service over there. Super expensive private hospital in US would provide as good customer service.
        techsupporter 10y ago
        Case in point in north Texas: Witness the staggering difference between the specialty hospitals that have cropped up like weeds over the past decade (many of them are clustered around the larger hospitals in places like Plano and Denton) versus, say, the public and not-for-profit hospitals that must take all comers. Most of these specialty hospitals oh-so-carefully do not offer "Emergency Services" (as in, they don't staff a room called an "emergency room" even though they, conveniently, have an ambulance bay and are staffed 24/7) so they don't have to accept Medicare or several of the known-to-pay-on-the-low-side private insurance plans. Meanwhile, Parkland, JPS, Baylor, and UTSW get to deal with the "cast-offs" who have no other choice.
- pilsetnieks 10y ago
  I think they meant the kinds of regulation, not the fact of regulation itself. In fact, it wouldn't surprise me if American healthcare had more regulation than the average European country.
- eru 10y ago
  Singapore works fairly well. They have an interesting system; but it's not strictly single-payer.
rpedroso 10y ago
There are a few problems with this explanation: 1. FDR did not propose a wage cap until 1942, 3 years after the Great Depression had ended. It was a temporary wartime fundraising effort (and was quite popular with the public). In fact, health insurance really first came into existence during the Great Depression (mostly to ensure physicians and hospitals got paid). 2. FDR's wage cap did not pass. What actually happened was the passing of the the Stabilization Act of 1942, which gave FDR a power (that he invoked) to freeze wages and salaries during the war. The freeze was deeply unpopular with the labor movement, who threatened mass strikes. As a compromise, congress exempted health insurance (and other benefits like PTO and pensions) from the freeze. This was certainly a contributing factor (proportion of US population with healthcare roughly doubled from 1940 to 1945), but ignores the other factors that prompted the rise of employer sponsored healthcare. Indeed, by 1945, less than a quarter of Americans had health insurance. Rather, the two largest contributors to employer-sponsored health insurance was the demand of health coverage by labor unions and the 1954 legislative change that made health insurance tax exempt.
james1071 10y ago
There are many things that started 70 years ago which have long since gone. So, there must be forces which sustain the US model, where the employer pays for medical insurance. Also, I fail to see how employers offering medical insurance should make insurance for an individual any more expensive. So, while I appreciate the sentiment that something is clearly wrong, the two things that you mentioned are not the cause.
- maxerickson 10y ago
  A big one is that there is a tax deduction for employer provided health insurance. So offering a decent health plan is more compensation than just handing over the cost of the plan (which would be taxed). As far as how employer coverage can drive up individual costs, there are a couple of factors. One is that people with good health plans often don't pay attention to how much they cost, and often don't have much of a deductible, so they just use the medical system without paying too much attention to costs. That at least has the potential to drive medical prices up. The other is that people in the group insurance market tend to be somewhat healthier than the individual market. So the pool for individual insurance is more expensive to insure. Setting aside discussions about whether it is fair or not, it does result in higher costs for the individual market.
  - james1071 10y ago
    The reasons that you have given might be part of the explanation, but on their own they do not explain it. Yes, it is true that there is a tax benefit to employers purchasing healthcare insurance, which is tax deductible, and providing it as a benefit in kind. However, it does not follow at all from that the insurers should benefit: their costs are not affected and in a competitive market, they would price at marginal cost. Yes, it is true that people in employer plans could be perceived as being a better risk than those who are do not have them. They would still be better risks (and 'deserving' of a lower premium) however they obtained their health insurance. So, as I said before, there must be something else going on. Similar arguments apply to your claim that employers are less price sensitive than consumers - that really is implausible, given their buying power and incentives to maximise profits.

StClaire 10y ago

Kaiser of Kaiser Permanente started out making ships during WW2

AbrahamParangi 10y ago

The specifics of the American healthcare system aside, what leads you to believe that the problem is regulation? By essentially any metric, state provided (single-payer) healthcare is the best-known solution to the healthcare problem. Why is there any reason to believe that there's too much state intervention as opposed to, say, too little?

wyager 10y ago
> By essentially any metric, state provided (single-payer) healthcare is the best-known solution to the healthcare problem. Except things like, you know, quality of care or satisfaction. Single-payer healthcare beats the American implementation, which is not a high bar to clear. There's a reason medical tourism to Mexico and India is so prevalent. Totally deregulated private doctors seem to kick the ass of state healthcare (in quality and wait times) and American healthcare (in cost). I wouldn't want to get, say, complicated brain surgery in Mexico; in that case, the tens of thousands of dollars premium you would pay, uninsured, for US care is probably worth it. But for routine medicine (dental care, minor surgery, etc.) it's medical tourism all the way. For certain kinds of medicine, people will even make medical visits to the US from socialized countries like Canada or France.
- lisper 10y ago
  > There's a reason medical tourism to Mexico and India is so prevalent. Yes: health care in Mexico and India is cheaper. Not better. Cheaper. > I wouldn't want to get, say, complicated brain surgery in Mexico. I rest my case.
  - wyager 10y ago
    > Not better. Cheaper. Nope, it's also better for the vast majority of medicine. Have you ever used Mexican private healthcare? I have! Customer service and convenience is through the roof compared to US healthcare. > I rest my case. Not a very good case! The reason you wouldn't want to get complicated surgery in Mexico is that they don't have as many medical specialists, or as much equipment. The US is richer and has better schooling, so we have a huge supply of experts and medical technology. For the cutting edge of medicine, the benefit of having this outweighs the costs of receiving care in the US. However, almost all medicine is simple and doesn't require a particle accelerator or superconductors or whatever else you can find in cutting-edge American medicine. I wouldn't buy a radiation-hardened satellite microprocessor from China, but I'm perfectly happy to buy a Chinese laptop!
    - mantas 10y ago
      The reason is that what you pay for "cheap" service is actually the premium service over there. Super expensive private hospital in US would provide as good customer service.
      - techsupporter 10y ago
        Case in point in north Texas: Witness the staggering difference between the specialty hospitals that have cropped up like weeds over the past decade (many of them are clustered around the larger hospitals in places like Plano and Denton) versus, say, the public and not-for-profit hospitals that must take all comers. Most of these specialty hospitals oh-so-carefully do not offer "Emergency Services" (as in, they don't staff a room called an "emergency room" even though they, conveniently, have an ambulance bay and are staffed 24/7) so they don't have to accept Medicare or several of the known-to-pay-on-the-low-side private insurance plans. Meanwhile, Parkland, JPS, Baylor, and UTSW get to deal with the "cast-offs" who have no other choice.
pilsetnieks 10y ago
I think they meant the kinds of regulation, not the fact of regulation itself. In fact, it wouldn't surprise me if American healthcare had more regulation than the average European country.
eru 10y ago
Singapore works fairly well. They have an interesting system; but it's not strictly single-payer.

rpedroso 10y ago

There are a few problems with this explanation: 1. FDR did not propose a wage cap until 1942, 3 years after the Great Depression had ended. It was a temporary wartime fundraising effort (and was quite popular with the public). In fact, health insurance really first came into existence during the Great Depression (mostly to ensure physicians and hospitals got paid). 2. FDR's wage cap did not pass. What actually happened was the passing of the the Stabilization Act of 1942, which gave FDR a power (that he invoked) to freeze wages and salaries during the war. The freeze was deeply unpopular with the labor movement, who threatened mass strikes. As a compromise, congress exempted health insurance (and other benefits like PTO and pensions) from the freeze. This was certainly a contributing factor (proportion of US population with healthcare roughly doubled from 1940 to 1945), but ignores the other factors that prompted the rise of employer sponsored healthcare. Indeed, by 1945, less than a quarter of Americans had health insurance. Rather, the two largest contributors to employer-sponsored health insurance was the demand of health coverage by labor unions and the 1954 legislative change that made health insurance tax exempt.

james1071 10y ago

There are many things that started 70 years ago which have long since gone. So, there must be forces which sustain the US model, where the employer pays for medical insurance. Also, I fail to see how employers offering medical insurance should make insurance for an individual any more expensive. So, while I appreciate the sentiment that something is clearly wrong, the two things that you mentioned are not the cause.

maxerickson 10y ago
A big one is that there is a tax deduction for employer provided health insurance. So offering a decent health plan is more compensation than just handing over the cost of the plan (which would be taxed). As far as how employer coverage can drive up individual costs, there are a couple of factors. One is that people with good health plans often don't pay attention to how much they cost, and often don't have much of a deductible, so they just use the medical system without paying too much attention to costs. That at least has the potential to drive medical prices up. The other is that people in the group insurance market tend to be somewhat healthier than the individual market. So the pool for individual insurance is more expensive to insure. Setting aside discussions about whether it is fair or not, it does result in higher costs for the individual market.
- james1071 10y ago
  The reasons that you have given might be part of the explanation, but on their own they do not explain it. Yes, it is true that there is a tax benefit to employers purchasing healthcare insurance, which is tax deductible, and providing it as a benefit in kind. However, it does not follow at all from that the insurers should benefit: their costs are not affected and in a competitive market, they would price at marginal cost. Yes, it is true that people in employer plans could be perceived as being a better risk than those who are do not have them. They would still be better risks (and 'deserving' of a lower premium) however they obtained their health insurance. So, as I said before, there must be something else going on. Similar arguments apply to your claim that employers are less price sensitive than consumers - that really is implausible, given their buying power and incentives to maximise profits.