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It is not so obvious at all. Medicare Advantage does not have price controls, and it still costs less per capita than Original Medicare. > A dead simple “this

• formerkrogemp 4y ago
  > In fact, of the countries that usually make up the global leaders in health/medical innovators, all but 1 (the UK) engage in price controls (https://immigrantinvest.com/insider/the-best-healthcare-coun https://immigrantinvest.com/insider/the-best-healthcare-coun...), and the UK's NHS is suffering from a rationing crisis, and (ironically) a cost crisis. The UK's difficulty lie in their leadership and political issues and in the economic consequences of Brexit. I'm not sure it's the best example for your argument.
  • bhupy 4y ago
    The NHS's difficulty lies in the simple fact that it is understaffed (https://www.express.co.uk/life-style/health/1633058/general-practitioners-recruitment-crisis-thousands-doctors-national-health-service-warning https://www.express.co.uk/life-style/health/1633058/general-...) and the staff are underpaid (https://www.bbc.com/news/newsbeat-62290577 https://www.bbc.com/news/newsbeat-62290577) — leading to unprecedented wait times. This is because the "list prices" that the NHS pays for GP, nurses, and services are not subject to market forces, they are set by the government. The government is currently failing to address the supply loss with little political will to increase list prices (which propagate to the consumer through increased taxes). Brexit's influence is tenuous at best. Switzerland is also not part of the EU and doesn't face this problem. At best, Brexit exacerbated an already existing pricing problem. Where you're correct is that the difficulty lies in leadership's inability to actually change the prices to attract the supply necessary to reflect the increase in demand — and that's because the Single Provider system is tied to politics rather than market forces. The NHS is a third rail of politics and real reform is extremely difficult given the political buy-in necessary. In contrast, the private sector can (and will) increase prices to overcome demand — we see this happening in Switzerland (https://pubmed.ncbi.nlm.nih.gov/26766626/ https://pubmed.ncbi.nlm.nih.gov/26766626/). > The system offers a high degree of choice and direct access to all levels of care with virtually no waiting times So where we may agree to disagree is that the NHS's woes are in fact a very strong example of the greater argument, on net.
    • TMWNN 4y ago
      >Brexit's influence is tenuous at best. Indeed. It's basically the convenient bogeyman for opponents of the current government. >The NHS is a third rail of politics and real reform is extremely difficult given the political buy-in necessary. Private Eye on "24 Hours to Save the NHS <https://twitter.com/KulganofCrydee/status/833654730849136641 https://twitter.com/KulganofCrydee/status/833654730849136641>
    • nicoburns 4y ago
      > The NHS's difficulty lies in the simple fact that it is understaffed and underpaid — leading to unprecedented wait times. This is because the "list prices" that the NHS pays for GP, nurses, and services are not subject to market forces, they are set by the government. The government is currently failing to address the supply loss with little political will to increase list prices. And the US's problem is that the list prices it pays for GPs, nurses, and services are subject to market forces and thus are too high. The government is currently failing to address the service provision loss with little political will to decrease list prices (even though they would propagate through to consumers as decreased costs). It seems to me that there's no getting around the need for good governance here. And that lack of it is no excuse for not governing at all.
      • bhupy 4y ago
        > And the US's problem is that the list prices it pays for GPs, nurses, and services are subject to market forces and thus are too high. The government is currently failing to address the service provision loss with little political will to decrease list prices (even though they would propagate through to consumers as decreased costs). Yeah that's completely untrue; the list prices that insurers pay for GPs are heavily inflated by the market distortions introduced by the Federal government. I don't know if you read any of what I've written up-thread, but I'll paste the relevant parts here for your benefit: "First of all, the non-Medicare private insurance industry is heavily regulated, often more so than Medicare Advantage private insurers. In fact, you raise an important point: it's important to consider which specific regulations are helping and which are hurting. Outside of Medicare Advantage, there are regulations that strictly control insurance company's profit margins, how much of premiums can be spent on collecting medical claims (see: the 80/20 rule and Medical Loss Ratio rules), the fact that every beneficiary must be treated exactly the same (ERISA, parts of ACA), a minimum amount of coverage required (the ACA added this), the employer mandate (ACA), etc. To give you a sense for some of the unintended consequences that have been created by regulations on non-Medicare Advantage health insurance plans, due to Federal mandates and tax incentives, health insurance is predominately provided by employers rather than the individual market (unlike Switzerland, Germany, or the Netherlands). What we're seeing in healthcare costs is analogous to what you might see happen to airline ticket costs if we all got our air tickets through our employers: the vast majority of us would fly business class, while the unemployed would be simply unable to pay for business class fares out of pocket. A big reason for this is that employers (especially medium-to-large businesses) have a much higher purchasing power (and hence, willingness to pay) than individuals. If you take this behavior and combine it with the fact that health insurers' profit margins are capped by law, insurers pay more absolute dollars for treatments (which doctors happily accept), charge more to employers (who are generally less price conscious vs individuals), thus bring in more absolute revenue, and therefore more profit because a capped profit percentage of a higher revenue is higher than a capped percentage of lower revenue. It's somewhat counter-intuitive, but the policy combination of an employer mandate and insurance profit cap results in increased prices." Put simply, the US healthcare industry is not subject to traditional market forces. > The government is currently failing to address the service provision loss with little political will to decrease list prices (even though they would propagate through to consumers as decreased costs). It's quite clear that the reason the government is not doing this is because it would further exacerbate the staffing shortage and lead to even higher wait times. That's not a political problem, that's a hard economics problem. > It seems to me that there's no getting around the need for good governance here. And that lack of it is no excuse for not governing at all. There is a key governance difference between making the decision to lift distortionary regulations once & up-front so as to unblock efficient resources allocation vs actively having to continuously adjust resource allocation. With the former, you just have to trust that the "good governance" happens once, whereas with the latter, you have to trust that "good governance" happens forever (politics notwithstanding). The Swiss chose the former, whereas the UK struggles with the latter. Domestically in the US, Medicare Advantage is a proven model — and the governance prescription here is to have the entire private insurance industry look more like Medicare Advantage.