Comment by _heimdall
2 days ago
These types of studies, and the goals they aim to support, always frustrate me as solving a surface-level problem rather than root cause.
The problem with US healthcare isn't who pays for it, its how damn expensive it is. As always there are multiple factors at play, my list would include corruption, lack of legal accountability/responsibility, and a population that is much less healthy than reasonable.
Go after any one of those and we'd make a lot more headway than trying to ram through a universal, government-run healthcare or insurance program. And yes, such a program could impact the above topics, but it doesn't have to and could make any of them worse.
> The problem with US healthcare isn't who pays for it, its how damn expensive it is
Saving $1,000,000,000,000/yr is directly addressing how damn expensive it is.
The problem with models is that depending on your assumptions you can show just about anything. In general I think the foundation of a good argument, and good science, is assuming the minimum and seeing if your idea still works. They assume:
- hospital reimbursement drops to medicare rates ($296 billion)
- pharma prices decline 51% ($378 billion)
- administrative overhead way down ($286 billion)
- fraudulent billing way down ($286 billion)
- people stop going to the ER and stop being hospitalized as frequently, so the expanded use of services only costs $198 billion
Those seem like extremely optimistic assumptions, and the paper gives 0 consideration to most knock-on effects. For instance I don't think it's reasonable to cut hospital funding by $296 billion, increase the access to these hospitals, and assume everything will work out just fine. They at least acknowledge not acknowledging this, but that one factor alone already is likely to dramatically reshape things. And there are many others.
(1) we don't know the claims of the study will be accurate if implemented and (2) we would need studies modelling cost savings of alternative approaches to actually compare anything.
Obamacare made wild claims about cost savings as well. That didn't work out for many reasons that could show up again with another universal healthcare push.
There's a multitude of evidence that points to the success of the ACA from a cost perspective (among other things).
Cost of healthcare for individuals is not a good metric to judge by. The ecosystem of hospitals, patients, doctors, insurers, health systems, and the federal government is complex and you're not going to get a clear picture of the overall impact of the ACA by looking as something as simple as cost savings.
One example, hospitals are required to treat patients whether or not they hold insurance. The hospital foots the bill for that care and it's a major reason why hospitals shut down (especially in underserved communities). Getting more people on insurance plans was a direct factor is keeping many struggling hospitals and health systems afloat.
https://www.statnews.com/2019/03/22/affordable-care-act-cont...
https://www.networkforphl.org/news-insights/the-affordable-c...
https://www.cbpp.org/research/health/chart-book-accomplishme...
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1. Do any of the cost savings recommendations you address come close to $1T/yr impact? This is the scale we should be aiming for.
2. If you think this modeling is inaccurate or incomplete you can directly discuss that. That would be a much more interesting discussion than "it might be incorrect."
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The point of nationalisation is to address those underlying concerns. But it’s fair to say that in practice, nationalisation doesn’t always solve those problems.
The problem is you either need to regular or nationalise. And neither of those are particularly “American”.
I don't think our problem is a lack of regulation though. If anything its a lack of market competition, and that is caused by over regulation and legal protections that make holding companies responsible difficult or impossible.
I think the high upfront capital required to start out in the industry is a much much bigger hurdle than the regulation.
You see the same problem in IT with hardware startups vs purely software ones. The moment you need to own something more than 1s and 0s, the risk grows exponentially.
Reducing regulation doesn’t solve that problem.
And that’s without even considering all the shady tactics that the incumbents can do to drive new ventures out of business.
It's also caused by absurd nonsense like how doctors can't tell you how much anything they're proposing to do actually will cost (a necessary condition for entering into a contract!), but then the system makes up arbitrary bills after the fact - with fraudulent amounts that nobody actually pays! No other industry works like that, as it's not the foundation of a market in the first place. Imagine if going to the grocery store involved "paying" some token amount at the cashier for their time to put your items in bags, then for the food you received shakedown bills for years afterwards, that you had to spend time going through your old documentation to refute and bargain down. Absurd.
Regardless of "insurance", who is ultimately paying, or subsidies to provide a baseline of care - there needs to be reform that mandates simple up-front prices, constant per-provider regardless who is paying, and ruling out any other theory of billing. Doctors throw up their hands and act like they're dealing with some special problems, but there are plenty of other industries we can look at for the dynamics of how to handle routine procedures versus emergencies (and knowns vs unknowns) in a consensual and market-responsive manner.
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This paper is based on numbers from the CMS NHE. Here are those numbers summarized (up to 2023):
https://nationalhealthspending.org/
I haven't finished reading the paper and have no opinions on it (other than that most successful universal systems aren't single-payer) but if we start from actual numbers the discussion will be better.
> The problem with US healthcare isn't who pays for it, its how damn expensive it is
Exactly! There's so much paperwork that a doctor sometimes need two assistants just for the paper work. There's so much cost for independent practice that increasingly more doctors end up joining big hospitals. Charges with and without insurance have a huge difference. Just to name a few.
Universal healthcare would cut down on the paperwork needed and provide opportunities to simplify it
medicare is basically the biggest culprit for the "too much paperwork" stuff. A m4a plan that doesnt involve capitation would have even more paperwork than the current system does.
"The problem with US healthcare isn't who pays for it, its how damn expensive it is."
And also how much is required. I bet a study investigating how much money and lives could be saved by reducing obesity would have 2x numbers
Exactly. I'd at least want to see similarly funded studies comparing solves for underlying causes beyond just insurance companies not being nationalized.
Similarly we could look into the likely cost of over medicating our people, and the atrocities we call food in grocery stores.
Americans just consume a lot of healthcare services. Any substantial cost savings requires providing less healthcare service.
That's not necessarily true; fewer limitations on who is allowed to provide health service and manufacture medicine and health technologies would also drop prices. Competition in healthcare is very, very difficult because it's often illegal to compete.
You're actually talking about the same problem. Competition in healthcare is heavily restricted by stuff like certificates of need because there is little cost-sharing with utilizers so you get overutilization & induced demand. This is Roemer's law [0]. A large part of the reason for competition restrictions is because of a hacky attempt to control overutilization without direct cost-sharing.
0: https://en.wikipedia.org/wiki/Roemer%27s_law
Something like 20% of healthcare services are "low value care" which aren't justified by evidence-based medicine criteria and may even harm the patient. Regardless of the financing system we could free up a lot of capacity and slash costs by eliminating that low value care. Of course in practice it's difficult to do that at scale.
https://www.bloomsbury.com/us/price-we-pay-9781635575910/
In some cases they are provided healthcare services without a choice, so they're not really "consuming" those services. E.g. tests that don't change outcome but do cover a provider from a legal risk.
Citation needed (per capita please).
Given that people constantly, literally AVOID care because they can’t pay for it until it’s such an absurd problem that it’s very, very expensive, I struggle to believe this, at all.
And money amount doesn’t matter in this evidence because, again, Americans regularly avoid care until it’s catastrophic because they literally can’t afford it and/or have to wait for insurance to meet a certain harm level threshold where it literally can no longer be argued (emergency care)
The wonders of American healthcare really mean that it's all more expensive, and at the same time, more is consumed, because so much of what is paid is done past deductible. If you look at so many standard of care situations vs, say, Spain, the American system will do a whole lot more. Even for preventive care: For instance America wants colonoscopies every 10 years from 45. Spain will give you a non invasive fecal test every 2 years, and only consider colonoscopies after the test is positive. Every time I send my american prescribed intervention list, given my symptoms, to my family members working in the Spanish public caresystem, they look at it with their hair on fire. Very different standards. You might think US insurance is restrictive regarding what needs to be done, but most public care system are significantly more restrictive than that. It'll be for better reasons, instead of defaulting to no on everything, but ultimately still far more cautious regarding their spending.
So we fail both ways at the same time: We avoid interacting with the medical system, but when we do, far more is done, at far higher price per intervention, so we end up with more interventions for the same outcome, even though we avoid doctors more!
I think a citation is needed for "Americans regularly avoid care ... because they can’t afford it."
I think there are other reasons, e.g. they don't like doctors, or it's too inconvenient, or waiting times are too long. I have good insurance and haven't seen a doctor in probably 20 years.
I know people who are visiting the doctor for every sore throat, ache and pain or sneeze and sniffle, and that's not me at all.
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The people who avoid care they need because they can't afford it are a very small portion of the population that gets an outsized share of attention on the issue.
Until public healthcare advocates understand this and make actual attempts to convince the majority of people who are satisfied with the current system that there are benefits, the status quo will remain.
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I have a strong dislike for the industry as a whole. There's too many ridiculous situations I've been subject to, along with hearing of some from my friends.
My favorite was a friend who had to deliver her baby, alone, in a hallway, because they forgot about her. And the hospital billed her for it. LOL.
No, it’s not a question of who pays for it but who benefits.
You could have universal health with zero additional spending by the US government, but all that administrative overhead is someone’s income.
No one benefits when there's a single player in an industry. When that single player also owns your taxes and military, its a risk we should at least avoid if at all possible.
Let’s try and deal with actual facts here. If you disagree then you should be able to post some actual data in terms of lifespans or costs that says otherwise.
There’s multiple healthcare systems around the world, single payer results in vastly less administrative and thus overall spending and equal or better outcomes overall. So by objective criteria the average person massively benefits from single payer healthcare.
Companies don't hesitate to lay people off when their jobs aren't needed. I don't see why these parasitic insurance companies need to stay in business.
We never attempted to solve the issue of distorted price signals that occur when customers aren't the ones paying for something. We're still charging $600 for a bag of saline.
Especially when the buyer and seller are the same huge monopoly entity, but the payer is “somebody else,” the incentives are completely perverse.
It's extremely challenging to go after high costs in the current system, because the doctors who charge them are popular and the insurance companies who pay them are hated. There was a 2024 story that stuck in my mind (https://www.npr.org/2024/12/05/nx-s1-5217617/blue-cross-blue...) when Anthem tried to negotiate down the rate of certain anesthesia procedures; the public was absolutely outraged, successfully demanding that Anthem must back down and accept whatever the doctors feel is the appropriate pricing model.
The disconnect between prices and end consumers is itself a huge problem. I should know what care costs before I get it, and I should know how much my instance company is paying on my behalf before I get care.
For prices to be sane we need people being able to compare prices, decide what care they want and can afford, etc. Our prices are so high because its a closed market acting as though it were a free/open market being driven in part by customer decisions.
I think that’s a reasonable model to want, but it’s what we call “preauthorization”, and many patients along with most doctors absolutely hate it. In order to know with certainty what your care will cost and how much your insurance company will pay, the doctor has to contact them in between deciding what treatment you should have and giving you the treatment.
You can and I do solve that annoyance with an HMO, where the doctors and insurance can communicate more effectively because they’re part of the same organization. But that also means it’s difficult or impossible for me to get the kind of care that a normal insurance company would hesitate to approve.
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I agree that this proposal would not solve all of the problems; absent more changes you would still see the creep up of healthcare costs at too high a rate. But slashing $1 trillion off of a $5.3 trillion costs is a pretty big bite of the apple. Even if you go with the more conservative $663 number, that is still a great first step. And both of those numbers are after adding the costs of covering currency uncovered people. So we are collectively getting more for significantly less money.
It does this by eliminating a very inefficient layer of our current system (insurance companies), and by having there replacement for that (the government) negotiate on drug prices (how much savings there is the reason there are two estimates). Currently insurance companies almost have a negative incentive to push down drug prices (their profits are limited to a percentage of total spending, and most large companies are pushing against that limit).
Most of the cost control pressures in our current system come out of Medicare/Medicade, and this would widen that out to the whole system. That in turn would wedge open the door to pushing on the other drivers of the cost spirals: hospital administration, new expensive drugs that are not worth the additional costs, doctor salaries ballooning, and the broken system between malpractice insurance and dysfunctional enforcement against malpractice.
I understand that theres an argument for removing private insurance companies in favor of thr government can cut costs. It can also increase them.
I'd argue that the primary issue with insurance costs today is the lack of market competition, obscurity of what costs and prices are, and government protections that prevent insurance companies from being legally liable for many of the problems they cause.
Corruption and monopolistic practices is a big deal in healthcare, for example. We'd be better off, in my opinion, by solving that rather than killing an entire private industry and hoping our government can continue to do it better indefinitely.
>theres an argument for removing private insurance companies in favor of thr government
I don't see why you'd need to do that. Just expand medicare to everyone and if people want to also buy private insurance they can.
They'd just need to be more competitive and add significant value, which they don't currently do.
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