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Why Single-Payer Health Care Saves Money

nytimes.com

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Re: Why Single-Payer Health Care Saves Money

#161

Post by droidist2 »

cgag wrote: post #109
donmatito wrote: post #73

Earlier quoted context omitted.

If by "truly free market" you mean that healthy people can opt out of being insured, no, that would drive the costs up. Risk selection is a very driver of prices in health insurance. If you can spread the risk between healthy and sick people, the price goes down. If you can't, the price goes up. Secondly, having a population that has no health insurance means less prevention, i.e. worse health problems down the road,…

Spreading the price around more people isn't the only way for price to go down. If there were less supply side regulation of doctors than there would be more of them, and their time would be less expensive.

Absolutely. I remember in the 90s we supposedly had a "doctor glut" so the government paid medical schools not to train new doctors.

Re: Why Single-Payer Health Care Saves Money

#162

Post by mcrad »

Agency costs. Fools (& idealistic Americans) be thinking of "administrative costs" as able to be managed like the phone center that books your appointment, mail shop that sends your test results or janitors that clean the floor. Yes, these kinds of costs are basically in proportion to medical services provided, and yes, economies of scale apply. But if you have worked for a giant corporation or government, you might understand the danger of agency costs: not only can't be controlled, but in time, you get a worse product. Sad!

No, there's no perfect solution, but there must be a balance of market forces and semi-trustworthy regulators to make it work.

Re: Why Single-Payer Health Care Saves Money

#163

Post by harryh »

nolepointer wrote: post #156
krath94 wrote: post #94

Earlier quoted context omitted.

No the point of free market is that insurance is cheap enough that even healthy people buy it. Or even better, that healthcare costs are low enough that you don't even need insurance (that won't happen though because of the healthcare monopolies).

>Or even better, that healthcare costs are low enough that you don't even need insurance See, this is what I don't get. I'm fairly inexperienced with this stuff, but it's starting to become relevant in my life. Despite my new employer offering insurance, I'm staying on my parents' until I'm 26 (this was part of their policy even before Obamacare). However, this is the question I've been asking ... why do I even need…

Part of health insurance is a bit like fire insurance on your house. There is a really small chance that your house will burn down next year (say 1 in 10,000) but if it does you'll lose a ton of money (say $500,000). So you pay $55 to get a year of fire insurance (500,000 / 10,000 = 50 + 5 in profit for the insurance company).

This is a great deal for you. $55 is no big deal and now if your house burns down you don't suffer a tremendous financial loss.

Similarly there is a really low chance you'll get cancer next year. But if you do it could cost a ton (millions of dollars possibly) to treat. So insurance is a good deal for this too.

Now, in the US 2 other things get lopped on to health insurance that make things a bit more complicated:

1) For a lot of people health insurance covers cheap and predictable expenses like an annual checkup. There are a lot of people that think using insurance for this is a bad idea. But some people think it's a good idea. It's complicated.

2) Health insurance (especially after Obamacare) can be a form of social insurance where healthy and/or rich people pay more than they otherwise would so that unhealthy and/or poor people pay less. This reduces economic inequality. There is a lot of political disagreement about whether this is a good idea.

Did this help? I've glossed over a ton of details but maybe it's enough to get started.

Re: Why Single-Payer Health Care Saves Money

#164

Post by methodover »

esturk wrote: post #147
methodover wrote: post #120

Yes, a single-payer system would save money, but you have to be honest about the downsides. It's unfortunate that they are not honestly discussed in the article. Or, for that matter, almost anywhere. The vast majority of the savings come from government price fixing. This is what the article means by "large government entities are able to negotiate much more favorable terms with service providers." It's not really a…

You rip NYT for not openly discussing the downsides, yet after reading your comment about the 'risks', you haven't talked about the downsides either. Aside from "negotiation is not negotiation in the private sector", you aren't adding much to the discussion. Yes, government negotiation is still negotiation and yes it is not like in the private sector but it doesn't make it any less legitimate.

I'm not really an expert at all either when it comes to healthcare or economics. I feel not particularly qualified to get into the downsides. I'm just a regular person trying to understand the debate and take an informed position. That said, I'll try and take a stab at answering your comment in an honest way.

> Yes, government negotiation is still negotiation and yes it is not like in the private sector but it doesn't make it any less legitimate.

When the government owns an entire industry (as is being proposed in this case with the health insurance industry) I'm not sure if there is any meaningful difference between the sentences, "the government will set a price" and "the government will negotiate a price with providers."

We are talking about price controls as a means of lowering prices. It seems to be about that simple.

I'm a bit confused by what you mean when you say that when the government does it, "it doesn't make it any less legitimate." I'm not arguing about it would be illegitimate or unlawful of the government to set prices. I am, however, suggesting that there are known negative consequences of government price controls.

The general criticism of price controls, as I understand it, is that when the government sets prices too low, it causes shortages. Applied to healthcare, I would imagine that we risk slower development of new drugs and devices, lower quality service from doctors and nurses, and shortages of drugs and devices.

Re: Why Single-Payer Health Care Saves Money

#165

Post by camiller »

coredog64 wrote: post #112
luxuryballs wrote: post #85

Earlier quoted context omitted.

Yeah, and we ban people from public roads for bad behavior. Will we ban people from public healthcare for bad health choices? Do we really want to give the government that kind of exclusive control over a service while giving up control of our bodies?

Smokers typically exhibit compressed mortality. Yes, they die younger than non-smokers, and yes, they have health issues. But the health issues are typically of the sort that get deadly in short order and so actually save money.

Not sure how fighting lung cancer for three years with multiple rounds of chemo and radiation saves money....

Re: Why Single-Payer Health Care Saves Money

#166

Post by nolepointer »

harryh wrote: post #163
nolepointer wrote: post #156

Earlier quoted context omitted.

>Or even better, that healthcare costs are low enough that you don't even need insurance See, this is what I don't get. I'm fairly inexperienced with this stuff, but it's starting to become relevant in my life. Despite my new employer offering insurance, I'm staying on my parents' until I'm 26 (this was part of their policy even before Obamacare). However, this is the question I've been asking ... why do I even need…

Part of health insurance is a bit like fire insurance on your house. There is a really small chance that your house will burn down next year (say 1 in 10,000) but if it does you'll lose a ton of money (say $500,000). So you pay $55 to get a year of fire insurance (500,000 / 10,000 = 50 + 5 in profit for the insurance company). This is a great deal for you. $55 is no big deal and now if your house burns down you don't…

Yes, quite helpful, thank you. "True" insurance (car, fire, flood, etc.) makes sense to me, but health insurance is much more complicated. I guess it's point 1 that never made a lot of sense to me. So, I suppose you can put me in the group that considers it a bad idea to use insurance for such purposes.

Re: Why Single-Payer Health Care Saves Money

#167

Post by prostoalex »

dv_dt wrote: post #55
prostoalex wrote: post #41

Earlier quoted context omitted.

> infant mortality rates (2-3x higher in the US!). https://www.theatlantic.com/health/archive/2014/10/why-ameri... "The researchers compared data on infant health and mortality in the U.S.; Austria, whose rate of 3.8 is roughly average among European nations; and Finland, whose rate of 2.3 is one of the lowest in the world. One of the biggest differences, they found, was in the definition of what could be considered…

This is often brought up, so show the corrected or aggregate miscarraige and mortality numbers to get some point of comparison. Leaving it just open seems incomplete... Edit: Absent more aggregated numbers, it looks like Canada records similar to the US, while also having some similar issues with a higher pre-term birth rate, and US rate is still 50% higher than Canadas. http://data.worldbank.org/indicator/SP.DYN.IMR…

They do discuss the adjusted data a few paragraphs down:

"This difference in reporting, they found, accounted for around 40 percent of the U.S.’s relatively high rate compared to Austria and Finland, a result supported by the CDC report—when analysts excluded babies born before 24 weeks, the number of U.S. deaths dropped to 4.2 per 1,000 live births.

...

When the researchers broke the statistics down by age, they discovered that neonatal deaths were actually less frequent in the U.S. than in Austria and Finland."

Re: Why Single-Payer Health Care Saves Money

#168

Post by germanier »

rayiner wrote: post #86
flavor8 wrote: post #53

Earlier quoted context omitted.

I'm not convinced this is insurmountable. How do countries with single payer handle this? Surely you could require an newly established resident who wants treatment to pay a portion since they hadn't been funding it directly via taxes, and then add a further penalty if they move back out of state within a certain period of time (to discourage moving in-state just for treatment).

It would be unconstitutional for a U.S. state to treat newly-established residents differently than long-established ones with regard to a welfare benefit: http://www.washingtonpost.com/wp-srv/national/longterm/supco... . Countries like Germany don't have this problem because they have the power to control their borders. Accessing Germany's healthcare system requires being a German resident. That, in general, require…

The German benefits the article talks about are not health insurance (but rather things like welfare for unemployed). It is not considered a benefit, it is considered an insurance. In fact, health insurance laws make (apart from some edge cases) no difference based on nationality or type of residence. If you become a member of a health insurance fund (which you are required to if you work in Germany) you are fully covered from day one including pre-existing conditions. Plans to change that are not even on the horizon.

But you are of course right, it's not possible to simply move to Germany just to receive treatment under health insurance. To become member of a health fund you need to fulfil certain conditions, e.g. by starting employment. This applies even to German citizens moving from abroad.

Re: Why Single-Payer Health Care Saves Money

#169

Post by harryh »

nolepointer wrote: post #166
harryh wrote: post #163

Earlier quoted context omitted.

Part of health insurance is a bit like fire insurance on your house. There is a really small chance that your house will burn down next year (say 1 in 10,000) but if it does you'll lose a ton of money (say $500,000). So you pay $55 to get a year of fire insurance (500,000 / 10,000 = 50 + 5 in profit for the insurance company). This is a great deal for you. $55 is no big deal and now if your house burns down you don't…

Yes, quite helpful, thank you. "True" insurance (car, fire, flood, etc.) makes sense to me, but health insurance is much more complicated. I guess it's point 1 that never made a lot of sense to me. So, I suppose you can put me in the group that considers it a bad idea to use insurance for such purposes.

It's worth noting that #1 and #2 from my list can get kind of mixed together. If you're poor enough maybe an annual doctors checkup is a big expense for you. So maybe government subsidized health insurance should just cover it for you so that small health problems get taken care of before they turn into big problems(1). And once you're bundling this stuff in for poorer people you might as well just bundle it in for everyone.

I'm mostly with you in that I don't necessarily think this is a great idea, but that's the general thinking.

1. Though there is less evidence than you might think that this actually works.

Re: Why Single-Payer Health Care Saves Money

#170

Post by xemdetia »

peterhadlaw wrote: post #12

The word "negotiation" is a euphemism here: > The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers. If there are no other options for clients, it's essentially the government telling doctors how much their services are worth.

This doesn't stop lobbyists and special interests from moving the goalposts for how much a thing is worth or whether a new procedure should be covered. It does solve a medical office having to hire X administrators to cover his own health care just to negotiate with all of the insurance providers so they can get paid at all.

To me what we have already doesn't feel like a market. It's not like I feel doctors are being paid net/15 and that is why they get a discount. Or that they invest in their health care networks so costs are reduced for them in the long run. Insurance company hedges their bets so that they have the money to pay, but then when you get to a certain age you are chucked to the curb and then society has to pay for it. I just don't see where insurance companies are being fantastic middlemen or support networks for medical professionals or linking those who need care and appropriate medical professionals and producing value above and beyond what a single-payer system provides elsewhere. They just seem to complicate the costs significantly and do not create a market where resources feel distributed efficiently.

To me the biggest weirdness of health insurance is why they are a for-profit industry or largely for profit in the non-competing model they have right now. I want the employees of a insurance company to be smart, paid well and distribute all the resources in a smart way, but instead the goal is making money. If the market was competitive like it is for car insurance and other insurances that is fine because there are actual competitors but the whole equation doesn't work because most individuals making health insurance purchasing decisions have effectively the same amount of choice as whether or not you have Comcast.

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