Universal health coverage could save $1T and 114k lives a year: study

I have wondered if an option would be to have a state make it law that every 4 or 5 years they open the bidding for a health care insurance provider for the entire state. A state committee then takes the bid with best premiums to services ratio and they do the job for the contract term.

There would still be the option of people and businesses to buy 3rd party "extras" like private hospital rooms, vision care etc. on top the state plan, but some level of basic health care would be provided to all people paying into the state plan.

Would that work?

> One major issue is that the ACA put in a loss ratio of 80%. Which isn't a terrible thing in principle, it forces insurance companies to spend money on treatment. The problem is it also means that the profit of insurance companies is tied directly to how much they spend on healthcare. As a result, they are incentivized to spend more, not less, on medical treatments so they can justify higher premiums.

Investors care about margins, not absolute dollar figures. If your non-medical costs are capped, the incentive would be to reduce your other costs to preserve or maximize profits.

So the 80/20 rule is unlikely to have caused anything. More likely it's too low, and the profit ratio that can extracted and passed to investors is still higher than most investing alternatives, which is why it keeps attracting more investment. Without the 80/20 rule we would have seen the same thing or worse, though perhaps slower premium increases but less treatment delivered.

Really this all points to structural problems in the market. Naively we might presume there's not enough competition, and there could be many reasons for that--over regulation, lack of transparency. But it's more complicated than just that because medical treatment, particularly the most costly treatments, presumably have very high price elasticity [citation needed]. Over the long term, investors are just gonna keep trying to draw as much from the well as they can. The problem with public single-payer is that the basic demand curve dynamic doesn't magically change, so rather than complain about high prices people complain about shortages, OR the government just keeps borrowing to maintain satisfactory treatment access until they can't borrow anymore.

Maybe the only solution to rising healthcare costs is to slow down the pace of medical advancements. People love to point out how cheap care is elsewhere, but the most advanced and costly treatments usually become available in the US first, taking years or even decades to spread. (Note, higher prices on pre-existing tech subsidize the cost of bleeding edge treatments, so comparing MRI prices isn't very helpful.) Moreover, people elsewhere don't really know about them so it doesn't detract from their perception of the quality of care they receive. If you're dying and the doctor says there's nothing he can offer you, then that's that and no ill feelings toward the medical establishment. If he says there is something but it's gonna be crazy expensive or there's a shortage/waiting list, now your pissed.

If I voted for this, could I save $1 trillion? Or would it save other people who are not me $1 trillion?

> there are many people who would prefer that healthcare is run by a private industry,

The grammar is a little ambiguous around this, but you seem to be claiming that this is a majority position. It isn't. Single payer polls over 50% basically every time it's tested (the exception being some spun partisan reframings you occasionally see pushed), and has for decades.

>"fewer avoidable emergency department visits and hospitalizations" assumes greater insurance coverage leads to greater access to primary care.

This is a hoot. There is an entire cohort of people who use the emergency room as their non-urgent clinic. This is not a small demographic, it must be at minimum tens of millions of people, if not going above the nine digit mark. They do this because their parents did it, and it's the only thing they know, and their parents did it because it's the only thing they knew, and they did it because their parents did the same. It is a culture that no amount of education and public service announcements will ever change.

Heaping one perverse incentive after another on top of this mess won't change it either, but will almost certainly make things worse for everyone.

>For "less fraudulent billing," a lot of people in the industry believe that Medicare has a large amount of undetected fraud.

My grandpa when he was still alive would have one new fraud story with every visit to the doctor, and he wasn't in great shape towards the end, so this was too many to count, every year for the last few. Diabetic, they ordered him compression socks at one point... a dozen show up instead of the two pair that was ordered. He'd come home and wait for a bill in the mail, and a few days later would see itemization for tests and procedures he never underwent. Over and over and over. He was sharp, argumentative, and as far as I could tell, less confused than most his own age. His experience, I think, wasn't atypical.