4 ms·

So if the healthcare and insurance markets are screwed up because of government, the solution then is more government? I always find this logic lacking. Maybe I

by whb07 6y ago

So if the healthcare and insurance markets are screwed up because of government, the solution then is more government? I always find this logic lacking. Maybe I could get an eli5 from someone ?

pixelatedindex 6y ago
I don't know about "more" government, but "less" government is also not the solution. The real solution is a "better" government, and that's a very layered problem. Either way, we pay a lot more for a very subpar health ecosystem compared to the rest of the world.
deleted 6y ago
[deleted]
vangelis 6y ago
What is government to you? Does government add complexity? If complexity is the issue, then folding multiple insurance companies with different reimbursements rates and interfaces into one entity should reduce complexity. Hospitals already deal with CMS, why not only deal with CMS?
Eric_WVGG 6y ago
The parent post said nothing about healthcare and the insurances markets being screwed up because of government. The argument for single-payer hinges on the theory that the profit motive is incompatible with the very idea of insurance (that is, as long as denying services is more profitable than providing them, an insurance market is an inefficient way to provide said services).
- bhupy 6y ago
  It's complicated. 1) "Single payer" is not the only way to deliver universal healthcare. Germany, Switzerland, Netherlands, Singapore all have thriving multi-payer systems. In Switzerland and the Netherlands, ALL insurance is private. In Singapore, while the government covers catastrophic care, 70% of total health expenditures are private. 2) The biggest problem in the US is that healthcare is just more expensive, and American insurers end up having to pay more. An example: doctors in America earn more (PPP adjusted) than in any other country. MRI's in America cost more (even on the Medicare fee schedule) than almost any other country. A lot of this is actually caused by a series of well-intentioned policies passed over the last half century. 3) In the US, for-profit insurance profit margins are a pretty meagre 5%, which doesn't really make a dent in costs. Also, some of the biggest insurance providers are non-profits (Blue Cross Blue Shield, Kaiser) 4) Medicare fee schedules aren't that much better, in fact the part of Medicare that's actually working the best is Medicare Part C (Medicare Advantage), which relies on private payers. Source: I work at a claims adjuster
  - MiroF 6y ago
    At least in Switzerland, the government pays if you are paying more than 8% of your income, the government caps deductibles, and the government prohibits profit seeking for the basic plan. Very different from the US
    - bhupy 6y ago
      Sure, I'm not defending the US status quo, just attacking the idea that "single-payer" is the best/only solution. Not arguing for an anarchist free-for-all either — some of the most successful private healthcare regimes (Switzerland, Singapore) are also well regulated.
andreareina 6y ago
Government doesn't need to turn a profit off of the healthcare system. Arguably that is (or should be) part of government's remit: to provide infrastructure and services that can't reliably be provided at a profit, yet serve the public good.
- bhupy 6y ago
  Private insurance profit margins are, on average, about 5%. Reducing healthcare costs by 5% doesn't get you very far.
  - karpierz 6y ago
    The public option isn't supposed to replicate private insurance. Monopolistic/legislative powers allow the public option to set market rates.
    - bhupy 6y ago
      That's true, in theory, but in practice Medicare fee schedules aren't that much better than private insurers. Additionally, providers themselves are starting to charge out-of-network rates that are LOWER than Medicare fee schedules. For example, Wal-Mart has launched healthcare in Georgia, charging $25 for a cleaning[1], which is significantly lower than the amount for a cleaning (procedure code D1110) set by Medicare/Medicaid. You can look it up yourself by visiting the FAIR Health code lookup tool (https://www.fairhealthconsumer.org/dental/results https://www.fairhealthconsumer.org/dental/results), and setting the ZIP code to that of Carlton, GA (location of the Wal-Mart clinic), 30627. The average allowed amount is $64. Finally, the US government has historically been pretty bad at setting prices, as a monopsony buyer. The US military spends more per capita on the military largely because it pays more per-soldier, per-fighter jet, etc than any other nation on the planet. You would think that, as the sole buyer of US defense sector fighter jets, it could negotiate better rates. The F-35 is expected to cost $1.5 trillion (!!) over its lifetime, and the US enjooys monopoly/legislative powers over that cost. Another example: NASA's planned SLS moon mission is a bit of a disaster — way over budget and way behind schedule. Because the boosters aren't reusable, each launch is expected to cost $1B (with a B) dollars — EACH launch! Meanwhile SpaceX's target cost-per-launch is $50M. So while you're right that, in theory, a monopsony can extract the lowest possible price, there's absolutely no guarantee of this, indeed American empirical evidence has at times proven otherwise. [1] https://www.bloomberg.com/news/articles/2020-02-25/walmart-takes-on-cvs-amazon-with-low-price-health-care-clinics https://www.bloomberg.com/news/articles/2020-02-25/walmart-t...
sequoia 6y ago
Single payer isn't just "more government," it's also "more open market competition" at least in my limited experience as an American in Canada (been here almost three years). Single payer means everyone has a health card entitling them to spend tax money on their own healthcare how they want (within certain parameters, of course). This means health insurance companies don't get to act as cartels, limiting (patient) access to care, and, crucially, limiting provider access to patients & patient dollars. If I want to see a doctor in Toronto, I don't go to the doctor "in my network", probably at a big practice that has some convoluted agreement (or not!) with my particular insurance provider. If I want to see a doctor in Toronto, I can basically go to any available doctor who is taking new patients. Imagine literally everyone has a health-care budget to spend, regardless of how rich poor they are. Can you imagine the type of competition & innovation this creates for those health-care dollars? Pharmacists remember my name & ask whether the meds worked as expected, doctors will visit me at my house (this has been cut back by the latest provincial government), I can check wait times at drop-in clinics online & book an appointment, see a doctor same day, even within a couple hours. Try that in the USA without going to the ER, and even then I'd be surprised if you see a doc in less than a few hours. I was amazed to see the competition and market innovation in healthcare in Canada when I arrived here. You might be amazed as well.
Kluny 6y ago
Government is made up of people. "More" government isn't a meaningful term. The difference is who is in that government, how they are educated, what their values are, and how much trust they have in each other.
- unishark 6y ago
  I assume they mean more government control of economic decisions versus individual control.

by whb07 6y ago

So if the healthcare and insurance markets are screwed up because of government, the solution then is more government? I always find this logic lacking. Maybe I could get an eli5 from someone ?

pixelatedindex 6y ago

I don't know about "more" government, but "less" government is also not the solution. The real solution is a "better" government, and that's a very layered problem. Either way, we pay a lot more for a very subpar health ecosystem compared to the rest of the world.

deleted 6y ago

[deleted]

vangelis 6y ago

What is government to you? Does government add complexity? If complexity is the issue, then folding multiple insurance companies with different reimbursements rates and interfaces into one entity should reduce complexity. Hospitals already deal with CMS, why not only deal with CMS?

Eric_WVGG 6y ago

The parent post said nothing about healthcare and the insurances markets being screwed up because of government. The argument for single-payer hinges on the theory that the profit motive is incompatible with the very idea of insurance (that is, as long as denying services is more profitable than providing them, an insurance market is an inefficient way to provide said services).

bhupy 6y ago
It's complicated. 1) "Single payer" is not the only way to deliver universal healthcare. Germany, Switzerland, Netherlands, Singapore all have thriving multi-payer systems. In Switzerland and the Netherlands, ALL insurance is private. In Singapore, while the government covers catastrophic care, 70% of total health expenditures are private. 2) The biggest problem in the US is that healthcare is just more expensive, and American insurers end up having to pay more. An example: doctors in America earn more (PPP adjusted) than in any other country. MRI's in America cost more (even on the Medicare fee schedule) than almost any other country. A lot of this is actually caused by a series of well-intentioned policies passed over the last half century. 3) In the US, for-profit insurance profit margins are a pretty meagre 5%, which doesn't really make a dent in costs. Also, some of the biggest insurance providers are non-profits (Blue Cross Blue Shield, Kaiser) 4) Medicare fee schedules aren't that much better, in fact the part of Medicare that's actually working the best is Medicare Part C (Medicare Advantage), which relies on private payers. Source: I work at a claims adjuster
- MiroF 6y ago
  At least in Switzerland, the government pays if you are paying more than 8% of your income, the government caps deductibles, and the government prohibits profit seeking for the basic plan. Very different from the US
  - bhupy 6y ago
    Sure, I'm not defending the US status quo, just attacking the idea that "single-payer" is the best/only solution. Not arguing for an anarchist free-for-all either — some of the most successful private healthcare regimes (Switzerland, Singapore) are also well regulated.

andreareina 6y ago

Government doesn't need to turn a profit off of the healthcare system. Arguably that is (or should be) part of government's remit: to provide infrastructure and services that can't reliably be provided at a profit, yet serve the public good.

bhupy 6y ago
Private insurance profit margins are, on average, about 5%. Reducing healthcare costs by 5% doesn't get you very far.
- karpierz 6y ago
  The public option isn't supposed to replicate private insurance. Monopolistic/legislative powers allow the public option to set market rates.
  - bhupy 6y ago
    That's true, in theory, but in practice Medicare fee schedules aren't that much better than private insurers. Additionally, providers themselves are starting to charge out-of-network rates that are LOWER than Medicare fee schedules. For example, Wal-Mart has launched healthcare in Georgia, charging $25 for a cleaning[1], which is significantly lower than the amount for a cleaning (procedure code D1110) set by Medicare/Medicaid. You can look it up yourself by visiting the FAIR Health code lookup tool (https://www.fairhealthconsumer.org/dental/results https://www.fairhealthconsumer.org/dental/results), and setting the ZIP code to that of Carlton, GA (location of the Wal-Mart clinic), 30627. The average allowed amount is $64. Finally, the US government has historically been pretty bad at setting prices, as a monopsony buyer. The US military spends more per capita on the military largely because it pays more per-soldier, per-fighter jet, etc than any other nation on the planet. You would think that, as the sole buyer of US defense sector fighter jets, it could negotiate better rates. The F-35 is expected to cost $1.5 trillion (!!) over its lifetime, and the US enjooys monopoly/legislative powers over that cost. Another example: NASA's planned SLS moon mission is a bit of a disaster — way over budget and way behind schedule. Because the boosters aren't reusable, each launch is expected to cost $1B (with a B) dollars — EACH launch! Meanwhile SpaceX's target cost-per-launch is $50M. So while you're right that, in theory, a monopsony can extract the lowest possible price, there's absolutely no guarantee of this, indeed American empirical evidence has at times proven otherwise. [1] https://www.bloomberg.com/news/articles/2020-02-25/walmart-takes-on-cvs-amazon-with-low-price-health-care-clinics https://www.bloomberg.com/news/articles/2020-02-25/walmart-t...

sequoia 6y ago

Single payer isn't just "more government," it's also "more open market competition" at least in my limited experience as an American in Canada (been here almost three years). Single payer means everyone has a health card entitling them to spend tax money on their own healthcare how they want (within certain parameters, of course). This means health insurance companies don't get to act as cartels, limiting (patient) access to care, and, crucially, limiting provider access to patients & patient dollars. If I want to see a doctor in Toronto, I don't go to the doctor "in my network", probably at a big practice that has some convoluted agreement (or not!) with my particular insurance provider. If I want to see a doctor in Toronto, I can basically go to any available doctor who is taking new patients. Imagine literally everyone has a health-care budget to spend, regardless of how rich poor they are. Can you imagine the type of competition & innovation this creates for those health-care dollars? Pharmacists remember my name & ask whether the meds worked as expected, doctors will visit me at my house (this has been cut back by the latest provincial government), I can check wait times at drop-in clinics online & book an appointment, see a doctor same day, even within a couple hours. Try that in the USA without going to the ER, and even then I'd be surprised if you see a doc in less than a few hours. I was amazed to see the competition and market innovation in healthcare in Canada when I arrived here. You might be amazed as well.

Kluny 6y ago

Government is made up of people. "More" government isn't a meaningful term. The difference is who is in that government, how they are educated, what their values are, and how much trust they have in each other.

unishark 6y ago
I assume they mean more government control of economic decisions versus individual control.