Alternatives to socialized health care

[tombigbee]

I think we should try reforming our health care system before going to a government-run system. However, what I really want is to engage my fellow classmates in a discussion on this issue. It’s a distance class and we have our discussions on a message board. In my opinion, our textbook somewhat subtly led most of them to take a position that we should copy Canada. We get to discuss Canada again in 3 weeks, and I want to be ready.

I looked ahead in the textbook. Germany, UK, Canada, and China have coverage that is “guaranteed portable, affordable, and universal or near-universal” and only “Mexico continues to struggle to improve access to care.”

I believe that making health insurance mandatory, moving to consumer-driven health care, and individually-owned portable insurance could be better than a government-run system.

My justification is mainly centered on the affordability issue. For example, a critique of Canada’s system in 2003-2004 points out that 57% of visits to the emergency room were not really emergencies, resulting in long waits at times for people who were seriously ill . Also, some people in France abuse the system by having the same tests performed 2-3 times. Wouldn’t both of these be examples of challenges to keeping socialized health care affordable?

Overall, I favor capitalism over socialism because I believe it is a better fit with our human nature. Wouldn’t it be a better cost-control measure for people to have some direct interaction with paying for their health care? (Sorry, I don’t think I worded that very well!)

[Der_Trihs]

@tombigbee

Wouldn’t it be a better cost-control measure for people to have some direct interaction with paying for their health care? (Sorry, I don’t think I worded that very well!)

Not really. The two fundamental problems that come with mixing capitalism and health care are that it’s too complex and large a field for the layman to grasp ( and therefore make an informed decision ), and that people often have no choice but to buy. People in America pay medical bills that ruin their lives, because the alternative is death. When one side in a transaction has such a huge advantage, capitalism becomes fairly indistinguishable from robbery.

[Shagnasty]

I have given this some thought and think that the government needs to set up a lot of basic care clinics. I know that some of these exist but hospitals and other urgent care facilities spend way too much time and money dealing with noncritical care and routine matters. These clinics would serve each community to take a load off other facilities by providing basic, sound health care.

These basic care clinics would be public and “socialized” in the same way that public schools are socialized. They would be a place where anyone could go to get treated for colds, infections, education, and advice on health care. They sew stitches and deal with small emergencies. They would be equipped to deal with urgent emergencies but those would be sent to more critical care facilities as soon as the patient is stabilized enough to go.

These clinics wouldn’t provide cutting edge care but they could provide sound health care. In practice, most of the people that would use them would be poor, elderly or others without health insurance but that should be OK.

The model they would work on would be very similar to student health clinics at most larger colleges. These would make many of the complaints about the current system less valid and take the burden off parts of the health care system.

[Sal_Ammoniac]

@tombigbee

I believe that making health insurance mandatory, moving to consumer-driven health care, and individually-owned portable insurance could be better than a government-run system.

Hey, you’re back! Anyway, the things you mention will nibble at the problem, but do nothing to solve it. Healthcare is so expensive in this country because it has too many moving parts. The solution is to *reduce * the number of moving parts, or at least standardize them – in other words, create efficiencies. All of the solutions you cite do nothing more than shuffle the money around – they don’t necessarily save anything, because they don’t reconfigure anything in a more efficient way. Take mandatory insurance – what does that do but impose a new tax on the individual, and a new administrative burden to make sure that individual has paid his or her tax?

We like to pretend that there’s some difference between money being paid into the system through tax dollars, and money being paid in from elsewhere – copayments, deductibles, co-insurance, etc. We have this horror of “socialized” medicine, and a horror of “bureaucrats telling us what doctor we can use” – as if both those things don’t already characterize the present system. But the fact is, we pay a tremendous penalty for this pretense. In the interest of not having “socialized medicine,” we refuse ourselves the efficiency of having a single payer, and it costs us billions.

I see healthcare as a Gordian-knot problem: you have to cut through it at a stroke, not try to unravel it. To me this means a single payer, supported by tax dollars. I’ve made this point before, but the fact is, government is already paying half the healthcare costs in this country. And since we’re paying, as a percentage of GDP, twice what other countries are paying, there’s basically almost enough money already in the system to have universal coverage. We’re crazy to settle for less.

But beyond simplifying the payment mechanism, and implementing some basic IT-based efficiencies in the delivery of healthcare, I would argue that medicine needs to be reconceived from top to bottom. I don’t know if this is the place to go into that, or if it would just muddy the issue.

[Kimstu]

I recently read a detailed article on this subject that addresses a lot of your points: The Health Care Crisis and What to Do About It.

@tombigbee

I believe that making health insurance mandatory, moving to consumer-driven health care, and individually-owned portable insurance could be better than a government-run system.

According to the article, these aren’t likely to be viable solutions by themselves. The biggest problem with non-single-payer systems is simply the complexity and overhead incurred by having so many different insurers, each with a different system.

The view that Americans consume too much health care because insurers pay the bills leads to what is currently being called the “consumer-directed” approach to health care reform. […] The main idea is that people should pay more of their medical expenses out of pocket. And the way to reduce public reliance on insurance, reformers from the right wing believe, is to remove the tax advantages that currently favor health insurance over out-of-pocket spending. […]

What’s wrong with consumer-directed health care? One immediate disadvantage is that health savings accounts, whatever their ostensible goals, are yet another tax break for the wealthy, who have already been showered with tax breaks under Bush. The right to pay medical expenses with pre-tax income is worth a lot to high-income individuals who face a marginal income tax rate of 35 percent, but little or nothing to lower-income Americans who face a marginal tax rate of 10 percent or less, and lack the ability to place the maximum allowed amount in their savings accounts.

A deeper disadvantage is that such accounts tend to undermine employment-based health care, because they encourage adverse selection: health savings accounts are attractive to healthier individuals, who will be tempted to opt out of company plans, leaving less healthy individuals behind.

Yet another problem with consumer-directed care is that the evidence says that people don’t, in fact, make wise decisions when paying for medical care out of pocket. A classic study by the Rand Corporation found that when people pay medical expenses themselves rather than relying on insurance, they do cut back on their consumption of health care—but that they cut back on valuable as well as questionable medical procedures, showing no ability to set sensible priorities. […]

The administration’s plans for consumer-directed health care, then, are a diversion from meaningful health care reform, and will actually worsen our health care problems. In fact, some reformers privately hope that George W. Bush manages to get his health care plans passed, because they believe that they will hasten the collapse of employment-based coverage and pave the way for real reform. (The suffering along the way would be huge.)

Implementing mandatory health coverage, without a system of universal coverage, would subject health coverage to market risks. What happens to your health insurance when your private health insurer goes bankrupt because they had to pay out more in claims than they took in in premiums? At present, private insurance companies minimize this risk by screening out the people with expensive illnesses, so that the sick and poor frequently end up uninsured. But what would happen if it was mandated that everybody get private health insurance?

“Most health costs are incurred by a small proportion of the population whose expenses greatly exceed plausible limits on out-of-pocket spending.” In other words, if people had to pay for medical care the way they pay for groceries, they would have to forego most of what modern medicine has to offer, because they would quickly run out of funds in the face of medical emergencies.

So the only way modern medical care can be made available to anyone other than the very rich is through health insurance. Yet it’s very difficult for the private sector to provide such insurance, because health insurance suffers from a particularly acute case of a well-known economic problem known as adverse selection. Here’s how it works: imagine an insurer who offered policies to anyone, with the annual premium set to cover the average person’s health care expenses, plus the administrative costs of running the insurance company. Who would sign up? The answer, unfortunately, is that the insurer’s customers wouldn’t be a representative sample of the population. Healthy people, with little reason to expect high medical bills, would probably shun policies priced to reflect the average person’s health costs. On the other hand, unhealthy people would find the policies very attractive.

You can see where this is going. The insurance company would quickly find that because its clientele was tilted toward those with high medical costs, its actual costs per customer were much higher than those of the average member of the population. So it would have to raise premiums to cover those higher costs. However, this would disproportionately drive off its healthier customers, leaving it with an even less healthy customer base, requiring a further rise in premiums, and so on.

Insurance companies deal with these problems, to some extent, by carefully screening applicants to identify those with a high risk of needing expensive treatment, and either rejecting such applicants or charging them higher premiums. But such screening is itself expensive. Furthermore, it tends to screen out exactly those who most need insurance.

[tombigbee]

@Shagnasty

These would make many of the complaints about the current system less valid and take the burden off parts of the health care system.

One classmate says her family uses something like you’ve described, the JPS Health Network. She is “100% for socialized medicine.” She mentioned that going for diabetes management took at least half if not most of the work day. I couldn’t find hours of operation posted, but not being opened late evenings/nights seems a huge oversight. Anyway, here’s your solution (in-part), but it didn’t end the complaints in this case. I mean, why not just complain about the hours?

[Tevildo]

@tombigbee

I looked ahead in the textbook. Germany, UK, Canada, and China have coverage that is “guaranteed portable, affordable, and universal or near-universal” and only “Mexico continues to struggle to improve access to care.”

I can assure you that the German system isn’t. In Germany, no insurance == no treatment. The state does provide a cheap-rate insurance scheme, and all employers are required to offer it to their workers, but it’s up to every individual to decide whether or not to take it up - there’s no “National Health Service” in the same sense as in the UK, where all you have to do is pay your taxes to be guaranteed access to healthcare.

[MilTan]

Your affordability argument is a bit of a red herring. All of the countries you mention spend far less per capita on health care than the US (some, such as Canada, spend less than half as much!) while still achieving better health outcomes. So, even assuming that the issues you mention are severe cost drains, fixing them will only make the more cost-effective alternatives even cheaper.

[spazattak]

@Der Trihs

Not really. The two fundamental problems that come with mixing capitalism and health care are that** it’s too complex and large a field for the layman to grasp ( and therefore make an informed decision )**, and that people often have no choice but to buy. People in America pay medical bills that ruin their lives, because the alternative is death. When one side in a transaction has such a huge advantage, capitalism becomes fairly indistinguishable from robbery.

Thank you. I like being told that I’m too stupid to make my own choices. Should we also have the government provide cars and computers, because they are also so complex that the average laymen cannot grap the concepts around them?

As for number 2 - cite. I doubt that a most of american healthcare revolves around death. Infact, I’d bet that most of it revolves around health and convenience. The alternative isn’t death, but just staying sick or injured for a longer period of time, or feeling a bit more depressed, or being slightly more inconvenienced from pain.

[tombigbee]

@Kimstu

Implementing mandatory health coverage, without a system of universal coverage, would subject health coverage to market risks.

My understanding is that doing the one means also doing the other. “The other – and far more promising – path to universal coverage is to approach health insurance as we approach car insurance: Make it mandatory.” Health Insurance Required

@Article

A deeper disadvantage is that such accounts tend to undermine employment-based health care… Yet another problem with consumer-directed care is that the evidence says that people don’t, in fact, make wise decisions when paying for medical care out of pocket.

I don’t know if this quote from the “portability link” answers the first point directly since it’s about health savings accounts, but maybe it does: “For employers, portable health insurance means that small groups are no longer treated as a self-contained pool and rated each year based on changes in health status of their employees. Instead, their employees will be members of very large pools in which no one can be singled out because of a sudden large medical expense, and premium increases are the same for all.”

On the second point, I’m a bit confused myself. Why is it considered “out of pocket” when one has insurance? Evidently I don’t understand my own cites!

[kellner]

@Tevildo

I can assure you that the German system isn’t. In Germany, no insurance == no treatment. The state does provide a cheap-rate insurance scheme, and all employers are required to offer it to their workers, but it’s up to every individual to decide whether or not to take it up - there’s no “National Health Service” in the same sense as in the UK, where all you have to do is pay your taxes to be guaranteed access to healthcare.

That’s technically mostly correct, but a bit misleading. It’s true the obligatory health insurance doesn’t apply to everyone. Originally you had no choice whatsoever if it applied to you. I recent years you can opt out of the system once and for all, but unless you know very well what you are doing, it can be a seriously bad idea. Few people actually do that.
It’s also not the state that provides the health insurance, although is so tightly regulated that it might look that way.

[Kimstu]

@spazattak

Thank you. I like being told that I’m too stupid to make my own choices

There, there, nobody’s calling you stupid. Der Trihs is just pointing out that medicine is an extremely complex and specialized subject, and the average consumer doesn’t have the necessary specialized training to make wise choices about treatment. See the excerpt from my linked article above:

A classic study by the Rand Corporation found that when people pay medical expenses themselves rather than relying on insurance, they do cut back on their consumption of health care—but that they cut back on valuable as well as questionable medical procedures, showing no ability to set sensible priorities.

Lack of specialized knowledge != stupidity, but it can lead to poor choices anyway.

@spazattak

As for number 2 - cite. I doubt that a most of american healthcare revolves around death. Infact, I’d bet that most of it revolves around health and convenience.

Nope, the majority of costs come from a minority of the population needing expensive treatments. Again from my link:

In 2003, health spending roughly followed the “80–20 rule”: 20 percent of the population accounted for 80 percent of expenses. Half the population had virtually no medical expenses; a mere 1 percent of the population accounted for 22 percent of expenses.

Here’s how Henry Aaron and his coauthors summarize the implication of these numbers in their book Can We Say No?: “Most health costs are incurred by a small proportion of the population whose expenses greatly exceed plausible limits on out-of-pocket spending.”

Moreover,

Some 18 percent of lifetime costs for medical care- over $40,000- is estimated to be incurred in the last year of life.

So yes, I think it’s probably fair to say that a majority or thereabouts of US health care spending is spent either to save the lives of people with expensive conditions, or to prolong the lives of those who will die soon anyway.

[Kimstu]

@tombigbee

My understanding is that doing the one means also doing the other.

Sorry, I meant that if health insurance is mandatory without a government-backed insurance system, then insured people will be vulnerable when their private insurance companies go tits up, as some private companies are bound to do in any market system, especially if they’re no longer allowed to screen the most undesirable clients out of the risk pool altogether.

@tombigbee

On the second point, I’m a bit confused myself. Why is it considered “out of pocket” when one has insurance?

One doesn’t, at least if I’m understanding you correctly. “Consumer-driven” health care means things like health savings accounts, where the consumer pays out of pocket but gets a tax break on the cost, rather than insurance that undertakes to cover a wide range of potential costs. The idea is that not having insurance coverage will motivate the consumer to be more selective about health-care spending, thus cutting down costs. As my previous cite indicated, this doesn’t seem to work very well in practice.

[tombigbee]

@Der Trihs

It’s too complex and large a field for the layman to grasp ( and therefore make an informed decision )…

What did you think of some of these sites from the “consumer driven health care” link? I think the Internet is helping us become socialized toward checking out medical stuff ourselves (if “socialized” is the right word). NOTE: The links don’t work – it’s copy and paste only.

"But for- and non-profit entrepreneurs have responded to the new demand for health information with various visionary health information ventures…

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WebMD Health (www.webmd.com)
Subimo (www.subimo.com)
Healthline (www.healthline.com)
Healthia (www.healthia.com)
Interfit Health (www.interfit.com)
Wondir (www.wondir.com)
myDNA (www.mydna.com)
Consumer Reports (www.consumerreports.org)
MayoClinic.com (www.mayoclinic.com)

---

Meanwhile new models of healthcare provision are experimenting with upfront pricing…

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MinuteClinic (www.minuteclinic.com)
RediClinic (www.rediclinic.com)
CashDoctor (www.cashdoctor.com)
SimpleCare (www.simplecare.com)

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And insurnace companies are beginning to expose their previously proprietary negotiated prices…

---

G Boulton, “Health Plan Lifts Veil On Charges,” Milwaukee Journal-Sentinel, 23 February 2006, http://www.jsonline.com/story/index.aspx?id=403820 "

[tombigbee]

@Sal Ammoniac

We like to pretend that there’s some difference between money being paid into the system through tax dollars, and money being paid in from elsewhere – copayments, deductibles, co-insurance, etc.

AND

I would argue that medicine needs to be reconceived from top to bottom. I don’t know if this is the place to go into that, or if it would just muddy the issue.

I just think we are better stewards of our money when it’s closer to hand. With the huge aging population in every industrialized country, I don’t think any system can afford waste/abuse. I have links to UK, Sweden and France citing mega health care budget problems, but I’m tired of doing links.

AND…Maybe not, but my sociology classes would tend to back you up. I’d love to discuss wild and/or sane ideas about health care, along with some other areas. We are in a major transition period in many areas of our society. For now, I’m having fun with this tread. If you start another one, please let me know!

[tombigbee]

@MilTan

All of the countries you mention spend far less per capita on health care than the US (some, such as Canada, spend less than half as much!) while still achieving better health outcomes.

What do you think of this situation?

“Another point to consider is that Spain takes a different view to rehabillitation, convalescence and terminal illness, leaving care in these cases usually to the relatives. There are very few public nursing and retirement homes, very few hospices and convalescence homes.” Hot Topics: Healthcare

A roundabout way of bringing up rationing, doctor shortages, budget-overages, etc. (I’m testing you to see how many cites you request. ) Anyway, socialized systems may spend less per capita because there will always be pressure to keep taxes down, so they do less here and there, and means test some, stuff like that.

[GIGObuster]

@tombigbee

I just think we are better stewards of our money when it’s closer to hand. With the huge aging population in every industrialized country, I don’t think any system can afford waste/abuse. I have links to UK, Sweden and France citing mega health care budget problems, but I’m tired of doing links.

Yeah, I have heard the same for more than 10 years in discussions like this and I am still waiting for them to default, tell me another one.

In the USA, for example, we now spend close to 15% of our GNP on health care, meanwhile:

http://www.sweden.se/templates/cs/BasicFactsheet____6856.aspx

Sweden’s costs for its health services amounted to SEK 178 billion in 2000, a figure which includes pharmaceutical preparations and dental care. This corresponded to 8.5% of GNP

[Der_Trihs]

@spazattak

Thank you. I like being told that I’m too stupid to make my own choices.

Not stupid; ignorant. Unless you claim omniscience, I guarantee you are ignorant of something.

@spazattak

Should we also have the government provide cars and computers, because they are also so complex that the average laymen cannot grap the concepts around them?

Using them isn’t all that complex, compared to the entire field of medicine.

@spazattak

As for number 2 - cite.

:dubious: You want a cite for the fact that medicine can save lives ?

@tombigbee

I think the Internet is helping us become socialized toward checking out medical stuff ourselves (if “socialized” is the right word).

Without an actual medical education, how can you tell if some medical advice you get over the internet is good, bad or outright fraud ?

What I hear in threads/discussions like this is that many people will trust corporations ( which have a motive to cheat you ) and unknown people over the internet, instead of the demonic force known as the govenment. That’s just. . . bizarre to me.

We see in other countries that government funded/provided healthcare ( in several forms ) works just fine. American style healthcare is driving people to bankruptcy right and left. We should go to a system that actually works, instead of sticking with the American disaster of a “health care system”.

[Happy_Clam]

There is a fascinating article in this month’s British Medical Review that suggests, based on the most recent information, that not only is the current US health system abandoning millions to disease, it is both less efficient and costs the US government more than equivalent programs in the UK, France and (I believe) Canada. Essentially, when you factor in funding for Medicare and Medicaid, support grants and tax write-offs for companies and (crucially) put in the extra cost of administrating the interaction between the various systems, health spending occupies 15% of US GDP (more than any other western nation- for comparison, UK is between 7% and 9%) and takes up a bigger chunk of government funding as percentage of spending than any other western country.

What conclusions can be drawn (other than that the system is in urgent need of change)? Well, I’m not sure. I’d say that the US is about sixty years overdue to move to full “nationalized” healthcare, paid for by the taxpayer (with private clinics still available, of course)- of course, such a system isn’t perfect (as someone who has frequent interaction with the NHS in Britian, I know this better than most), but at least it would remove the current bizarre state of affairs where America has the most expensive and least effective healthcare in the developed world.

On the other hand, you could easily take the viewpoint that such a policy would be less efficient than, say, some sort of mandatory insurance scheme- on the other hand, if such a system is to be administered by the government I would argue that there is little differentiation between this and full-on “socialised” (such an ugly word- I’m a socialist and even I don’t like it) healthcare, since only provision would be private, and even then the main customer being the government means that relatively little would be done to break the complex system of bureaucracy that is currently causing so much waste in the US system.

As others have pointed out above, some people choose to screw the system in a manner that wastes money- but you can both limit this by restricting what sort of treatment available and by co-ordinating healthcare provision with managment and local communities.

Ultimately, after all, isn’t it in everyone’s interest for the society in which you live to be healthy and relatively happy? It amazes me that getting some disease or injury when you lack health insurance can still be a serious threat in the US, one of the most advanced countries in the world. It sounds more like Victorian England than a modern state, and I would personally pay any percentage of my income (even the 40% top rate current in the UK) as tax to insure that I would not be left by the roadside after a car accident. Just as we don’t debate whether the government should act to protect our water from pollution or our citizens from foreign invasion (in the most general terms), so it seems to me that the “consumer” cannot efficiently or rationally provide healthcare for themselves, and that the most basic function of government is to protect its citizens- including securing their health.

Of course, I am unacceptably tainted through having grown up in a socialist pluralist state where such things are taken for granted. No doubt had I experienced the US system at first hand I would be much quicker to extoll the virtues of a free-market based system. Why should my life come before the right of my doctor, drug company and health insurance firm to make a solid profit?

[tombigbee]

You’re right. It’s more that Sweden may have problems in the future.

Sweden currently spends just over 9% of its GDP on health care - a figure which has remained largely constant for the last 20 years, leaving the Scandinavian country with one of the best funded health systems in the world.

However, Sweden has the highest proportion of over 80s in Europe and will face unprecedented demands on its health and social care systems in coming years.

"In the 1980s there used to be money for everything. Now we are more limited and it does not look like we will be getting any more.

"I have noticed that there is more pressure to get people in and out of hospital quickly and that is not always best for patients.

“I think we have reached a turning point. It is a concern.” Why I love the Swedish health system

How’s their tax rate compared to ours, BTW? I have no idea.