# Is there a cogent argument that explains why government ought not to offer health insurance? **URL:** \ **Category:** Great Debates\ **Created:** [June 9, 2009, 12:41am UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167 "2009-06-09T00:41:03Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Ruminator](https://avatars.discourse-cdn.com/v4/letter/r/b9bd4f/32.png) [@Ruminator](https://boards.straightdope.com/u/Ruminator)\ **Post date:** [June 9, 2009, 1:49am UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/21 "2009-06-09T01:49:38Z")
> [@Rumor\_Watkins](#): > > Ok… so, how much in profit does Healthcare Conglomerate X make in a year? Is this close in value to the amount that Healthcare Conglomerate X would’ve spent paying for the medical costs of the “deemed uninsurable”? In 2007, the total profits for the heath insurance companies were ~$12 billion. There 46 million uninsured Americans and the cost to insure them would be ~$110 billion per year. So the answer is no – removing the $12 billion in profit is not enough to pay for $110 billion in health care of the “uninsurable.” You’re still about $98 billion short. And btw, Bill Gates & Warren Buffet’s net worth combined (if their stocks were sold) wouldn’t even be enough to cover the $98 billion shortfall. ---
**Author:** ![The\_Second\_Stone](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@The\_Second\_Stone](https://boards.straightdope.com/u/The_Second_Stone)\ **Post date:** [June 9, 2009, 4:48am UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/22 "2009-06-09T04:48:47Z")
I think that the government would provide wonderful competition. The postal service is better with Fed Ex and UPS as competitors and they are better too. The problem seems to be that private industry is almost certain that they cannot compete, and they are probably right. The USPS is a full service provider that is mandated by law to operate at cost, and they can borrow from the government when they fall short, but they make it up when they get a rate increase. The USPS is a lot cheaper than Fed Ex and UPS and various other carriers, but the level of service from the private companies can be much greater. The USPS also does business with Fed Ex, and for all I know, with UPS. I know employees of all three services, and they all like what they do and their benefits package. Could this be done with Health Care? Sure, why not. There would be advantages with this for the public, but not for the private insurers. The private insurers can choose not to insure certain individuals: people who are uninsurable. There are ways around this using state laws. California, for example, requires that group insurers must insure all businesses with two or more employees. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [June 9, 2009, 5:02am UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/23 "2009-06-09T05:02:11Z")
> [@Ruminator](#): > > In 2007, the total profits for the heath insurance companies were ~$12 billion. > > There 46 million uninsured Americans and the cost to insure them would be ~$110 billion per year. > > So the answer is no – removing the $12 billion in profit is not enough to pay for $110 billion in health care of the “uninsurable.” You’re still about $98 billion short. > > And btw, Bill Gates & Warren Buffet’s net worth combined (if their stocks were sold) wouldn’t even be enough to cover the $98 billion shortfall. [http://www.nchc.org/facts/cost.shtml](http://www.nchc.org/facts/cost.shtml) > [@](#): > > Although nearly 46 million Americans are uninsured, the United States spends more on health care than other industrialized nations, **and those countries provide health insurance to all their citizens**.3 I get the feeling that you are using some unrealistic numbers there, what was your cite? ---
**Author:** ![AboutAsWeirdAsYouCanGet](https://avatars.discourse-cdn.com/v4/letter/a/22d042/32.png) [@AboutAsWeirdAsYouCanGet](https://boards.straightdope.com/u/AboutAsWeirdAsYouCanGet)\ **Post date:** [June 9, 2009, 5:57am UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/24 "2009-06-09T05:57:51Z")
> [@](#): > > There is no feedback mechanism in government bureaucracies to control costs. (Look at the endless jokes about excessive military spending.) Since there is no incentive to control costs, everybody’s premiums on the govt insurance keeps going up. > > If the government health program deliberately tries to make its insurance more affordable by capping its premiums so more people can participate (e.g. low-income families), then you will have a very short list of “approved” doctors, pharmacies, etc that would be willing to accept the government’s lower reimbursements. :rolleyes: Oh give me a break. Yes, govt can be costly, but so can private insurance. And, a lot of the cost overruns from private insurance is going towards CEO compensation. The CEO of Blue Cross Blue Shield, makes the equaliavnt of what a hedge fund manager makes. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [June 9, 2009, 6:20am UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/25 "2009-06-09T06:20:35Z")
\*\*Is there a cogent argument that explains why government ought not to offer health insurance? \*\* It’s not their job. Government programs are historically the height of poorly managed disasters, which makes them a poor use of tax money. It would be better if the government used bulk purchasing agreements to lower the cost of drugs and standardize other aspects of medicine for the consumer. Instead of pushing toward an HMO style of health system we should be moving toward catastrophic insurance and pay for routine medicine out of pocket. ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [June 9, 2009, 6:57am UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/26 "2009-06-09T06:57:53Z")
> [@tr0psn4j](#): > > The government doesn’t need to make a profit so it will drive all of the competition out of business. Mutual insurers don’t need to make a profit either, but there are plenty of examples of mutual and for-profit insurers competing successfully - including, outside the United States, in the field of health insurance. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [June 9, 2009, 4:56pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/27 "2009-06-09T16:56:34Z")
> [@Magiver](#): > > \*\*Is there a cogent argument that explains why government ought not to offer health insurance? \*\* > > It’s not their job. Government programs are historically the height of poorly managed disasters, which makes them a poor use of tax money. It would be better if the government used bulk purchasing agreements to lower the cost of drugs and standardize other aspects of medicine for the consumer. Instead of pushing toward an HMO style of health system we should be moving toward catastrophic insurance and pay for routine medicine out of pocket. What about people who can’t afford routine meds? What about the elderly? Would medicare still be the same, but only working people pay out of pocket? btw..I tend to agree with what you are saying, but the fact that there are government programs to pay for the poor and elderly drive prices upwards, creating a non-market atmosphere and making prices unaffordable.. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [June 9, 2009, 5:48pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/28 "2009-06-09T17:48:16Z")
> [@jtgain](#): > > What about people who can’t afford routine meds? What about the elderly? Would medicare still be the same, but only working people pay out of pocket? > > btw..I tend to agree with what you are saying, but the fact that there are government programs to pay for the poor and elderly drive prices upwards, creating a non-market atmosphere and making prices unaffordable.. I don’t see Medicare and Medicaid going anywhere. One of the current problems with the insurance gap is the inability to get catastrophic insurance. If you don’t already have insurance then companies don’t want to insure you. The other major restriction is industry cherry picking. This should be addressed on a federal level in association with insurance companies to avoid the law of unintended consequences. Kentucky and a number of states have enacted laws that drove away insurance companies and this should be reviewed to avoid repeating any mistakes. One of the advantages of states trying different programs is that we can learn from them. The goal should be to get people back in the business of taking care of themselves by addressing the roadblocks currently in place. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [June 9, 2009, 5:54pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/29 "2009-06-09T17:54:56Z")
> [@The\_Second\_Stone](#): > > I think that the government would provide wonderful competition. The postal service is better with Fed Ex and UPS as competitors and they are better too. The problem seems to be that private industry is almost certain that they cannot compete, and they are probably right. The USPS is a full service provider that is mandated by law to operate at cost, and they can borrow from the government when they fall short, but they make it up when they get a rate increase. The USPS is a lot cheaper than Fed Ex and UPS and various other carriers, but the level of service from the private companies can be much greater. The USPS also does business with Fed Ex, and for all I know, with UPS. I know employees of all three services, and they all like what they do and their benefits package. > > Could this be done with Health Care? Sure, why not. There would be advantages with this for the public, but not for the private insurers. The private insurers can choose not to insure certain individuals: people who are uninsurable. There are ways around this using state laws. California, for example, requires that group insurers must insure all businesses with two or more employees. The USPS has no competition in mail, other companies are forbidden from providing anything other overnight service when it come to mail. The law governing the Post Office recently changed so that the taxpayers are no longer subsidizing the USPS and it can retain earnings and post losses like a normal company. Since this law has been passed the USPS has lost around 10 billion dollars over the past 3-4 years. This may turn around(I doubt it) but is not an encouraging sign of the government competence to manage a business. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [June 9, 2009, 7:47pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/30 "2009-06-09T19:47:08Z")
> [@Magiver](#): > > I don’t see Medicare and Medicaid going anywhere. One of the current problems with the insurance gap is the inability to get catastrophic insurance. If you don’t already have insurance then companies don’t want to insure you. The other major restriction is industry cherry picking. This should be addressed on a federal level in association with insurance companies to avoid the law of unintended consequences. Kentucky and a number of states have enacted laws that drove away insurance companies and this should be reviewed to avoid repeating any mistakes. One of the advantages of states trying different programs is that we can learn from them. > > The goal should be to get people back in the business of taking care of themselves by addressing the roadblocks currently in place. I agree, but what I am saying is that even under your plan, prices are out of control. Let’s say that I have a nagging chest pain. If I have a catastrophic plan, then I will pay out of pocket for a doctor’s visit, EKG, visit to a specialist, back to the doctor, X-ray and then be told to take some Ibuprofen because of a muscle strain. That would easily run $700 or $800 at today’s prices. The problem with that is that I don’t have that kind of money lying around waiting to be spent, so people like me might try to shrug off minor pains to save some cash and not go seek treatment until a catastrophic situation arises, causing those costs to increase and have people dying earlier than needed. I’m in favor of a market solution that would open up these services to competition and get these prices to go down to more reasonable levels. A 5 minute doctor visit should not be $85.. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [June 9, 2009, 8:13pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/31 "2009-06-09T20:13:16Z")
> [@Magiver](#): > > \*\*Is there a cogent argument that explains why government ought not to offer health insurance? \*\* > > It’s not their job. Government programs are historically the height of poorly managed disasters, which makes them a poor use of tax money. It would be better if the government used bulk purchasing agreements to lower the cost of drugs and standardize other aspects of medicine for the consumer. Instead of pushing toward an HMO style of health system we should be moving toward catastrophic insurance and pay for routine medicine out of pocket. This is your solution? I see you completely ignore the supply side. The government should be funding physician & nurse training\*\* first.\*\* The focus on funding the demand side is what gets us in trouble, because it takes a decade for the supply side to catch up. (I support single-payer, btw, but it’s not going to directly address the shortages of nurses & general practitioners.) ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [June 9, 2009, 8:14pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/32 "2009-06-09T20:14:40Z")
> [@puddleglum](#): > > The USPS has no competition in mail, other companies are forbidden from providing anything other overnight service when it come to mail. The law governing the Post Office recently changed so that the taxpayers are no longer subsidizing the USPS and it can retain earnings and post losses like a normal company. Since this law has been passed the USPS has lost around 10 billion dollars over the past 3-4 years. This may turn around(I doubt it) but is not an encouraging sign of the government competence to manage a business. The USPS is not the government. If you like, we can change back to a government post office, but the USPS is a privatized monopoly that has to fund itself. ---
**Author:** ![athelas](https://avatars.discourse-cdn.com/v4/letter/a/5e9695/32.png) [@athelas](https://boards.straightdope.com/u/athelas)\ **Post date:** [June 9, 2009, 8:28pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/33 "2009-06-09T20:28:20Z")
From Greg Mankiw: "It seems to me that this passage, like most discussion of the issue, leaves out the answer to the key question: Would the public plan have access to taxpayer funds unavailable to private plans? If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter. If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what’s the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company. The fundamental viability of the enterprise does not depend on whether the employees are called “nonprofit administrators” or “civil servants.” The bottom line: If the goal is honest competition in the provision of health insurance, the public option cannot do much good but can potentially do much harm." From [Marginal Revolution](http://www.marginalrevolution.com/marginalrevolution/2009/06/the-public-plan.html): "Say the public plan has a cost advantage (both MC and AC), as plan proponents suggest. If public and private plans are to coexist, the public plan must be attracting the higher-cost customers, namely the higher medical risks. (I am also assuming that the political equilibrium does not allow the public plan to reject these customers outright.) There is then market segmentation and it is not obvious that there are significant positive competitive pressures on private insurance companies. You might wonder why the public plan does not attract all the low-risk customers and take over the whole market. I would say that either a) it does, or b) it is tailored toward the high-risk customers. Since public plan advocates sincerely and correctly claim the policy is not just a back door to single-payer, we are left with b)." ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [June 9, 2009, 9:04pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/34 "2009-06-09T21:04:21Z")
> [@athelas](#): > > From Greg Mankiw: "It seems to me that this passage, like most discussion of the issue, leaves out the answer to the key question: Would the public plan have access to taxpayer funds unavailable to private plans? > > If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter. > > If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what’s the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company. The fundamental viability of the enterprise does not depend on whether the employees are called “nonprofit administrators” or “civil servants.” > > The bottom line: If the goal is honest competition in the provision of health insurance, the public option cannot do much good but can potentially do much harm." > > From [Marginal Revolution](http://www.marginalrevolution.com/marginalrevolution/2009/06/the-public-plan.html): "Say the public plan has a cost advantage (both MC and AC), as plan proponents suggest. If public and private plans are to coexist, the public plan must be attracting the higher-cost customers, namely the higher medical risks. (I am also assuming that the political equilibrium does not allow the public plan to reject these customers outright.) There is then market segmentation and it is not obvious that there are significant positive competitive pressures on private insurance companies. > > You might wonder why the public plan does not attract all the low-risk customers and take over the whole market. I would say that either a) it does, or b) it is tailored toward the high-risk customers. Since public plan advocates sincerely and correctly claim the policy is not just a back door to single-payer, we are left with b)." This analysis leaves out a key reason for a public plan, which is covering the currently uninsured. One proposal being discussed is requiring all employers to pay some insurance for workers, which would drive more people into both public and private plans. As has been mentioned, some states require employer based plans to take high risk customers, so that may reduce the number driven into the government plan if made a requirement. While subsidies to reduce the cost to a potential customer currently with insurance would be a problem, I’d expect there would be subsidies for those who cannot afford insurance now. Would this be anti-competitive? If efficiencies coming from scale you’d get by covering all these people and from reducing the steps to evaluate and possibly reject claims makes the public system inherently cheaper, that’s not a subsidy. If the government system is equally efficient, so it at least breaks even at a lower cost by eliminating profits, that might be an indicator that this is a good role for government, in that it increases the social good at a reduced price. (Owning a car company doesn’t increase the social good, so isn’t an equivalent case.) If the faith-based position of many that government is always inefficient is correct, this will soon fail and the customers of it can be turned over to more efficient private enterprise. If that position is incorrect, we get better health care cheaper, as the private companies have to compete better to catch up. From the opposition, I think their faith is weak. ---
**Author:** ![Merijeek](https://avatars.discourse-cdn.com/v4/letter/m/f05b48/32.png) [@Merijeek](https://boards.straightdope.com/u/Merijeek)\ **Post date:** [June 9, 2009, 9:13pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/35 "2009-06-09T21:13:48Z")
> [@tr0psn4j](#): > > The government doesn’t need to make a profit so it will drive all of the competition out of business. But private insurers are so much more efficient than the government (they must be, since it’s an irrefutable article of faith for so many), certainly they could leverage that efficiency into a decent profit? -Joe ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [June 9, 2009, 9:28pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/36 "2009-06-09T21:28:58Z")
> [@foolsguinea](#): > > This is your solution? I see you completely ignore the supply side. > > The government should be funding physician & nurse training\*\* first.\*\* The focus on funding the demand side is what gets us in trouble, because it takes a decade for the supply side to catch up. > > (I support single-payer, btw, but it’s not going to directly address the shortages of nurses & general practitioners.) We don’t have a shortage of doctors or nurses and we already subsidize schools to some extent. We have problems with OBGYN doctors because of insurance premiums but that’s a different matter. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [June 9, 2009, 9:48pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/37 "2009-06-09T21:48:14Z")
> [@jtgain](#): > > I agree, but what I am saying is that even under your plan, prices are out of control. Let’s say that I have a nagging chest pain. If I have a catastrophic plan, then I will pay out of pocket for a doctor’s visit, EKG, visit to a specialist, back to the doctor, X-ray and then be told to take some Ibuprofen because of a muscle strain. That would easily run $700 or $800 at today’s prices. > > The problem with that is that I don’t have that kind of money lying around waiting to be spent, so people like me might try to shrug off minor pains to save some cash and not go seek treatment until a catastrophic situation arises, causing those costs to increase and have people dying earlier than needed. > > I’m in favor of a market solution that would open up these services to competition and get these prices to go down to more reasonable levels. A 5 minute doctor visit should not be $85.. My doctor charges $75 which would go down if people paid in cash. As for your scenario, I went through it. My doctor had an EKG machine in the office so I don’t see the $700-$800 bill. The idea of a high deductible is to manage your money like any other risk assessment decision. You could just as easily say an $800 car repair is beyond your reach. We will always have to cover the poor but there is a slice of the population that can afford to insure themselves if it were easier to do so. It may mean that people watch 13" TV’s without cable instead of 50 " flat screens and 150 channels. Those are the financial decisions individuals should be making. ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [June 9, 2009, 9:49pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/38 "2009-06-09T21:49:20Z")
There should be one government HC program: It would replace Tricare, Medicare, and Medicaid. The same program would be used for all Federal employees, including Congress. It would be offered to anyone to buy in, on a sliding scale based on income (free to those at some point below or at the poverty line, increasing in cost as your Adjusted Gross Income increases). I would expect private insurance to offer better plans with better provisions (drugs, private hospital rooms, conceirge care, MSA plans, etc.). You would need to be allowed to buy add-on plans for those things that the government plan does not cover, or does not cover well (certain drugs, procedures, etc.). You would be REQUIRED to have health insurance, and if you show up at an emergency room without a card you are signed up immediately based on your SSN. People coming to the US would have to provide proof of insurance or would buy a short term plan from a private provider or the government. Need to do something with illegal immigrants in the ER - how to force them to buy in when they arrive? I believe in the private market, but the current system is broken. ERs are going broke serving uninsured. Doctors would NOT be required to take government card carrying customers, however. ERs would continue to take everyone. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [June 9, 2009, 10:49pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/39 "2009-06-09T22:49:23Z")
> [@Magiver](#): > > We don’t have a shortage of doctors or nurses and we already subsidize schools to some extent. We have problems with OBGYN doctors because of insurance premiums but that’s a different matter. [http://www.medscape.com/viewarticle/532152](http://www.medscape.com/viewarticle/532152) > [@Dr. Paul Rockey](#): > > The US faces a shortage of doctors. To address this need, we must expand graduate medical education. That’s because all licensed physicians in the US must pass through GME. In 2003, the Council on Graduate Medical Education predicted a shortage of physicians and recommended a 15% increase in output.[1] More recently, the president of the Association of American Medical Colleges called on US medical schools to increase production by 30%.[2,3] Both allopathic and osteopathic medical schools are increasing class size, and more than a dozen new schools are planned. > > Currently, almost 19,000 MDs and DOs graduate each year. A 30% increase means 5700 more US graduates seeking residency training, but that equals the current number of international medical graduates entering GME each year. Unless we expand GME soon, the growing numbers of US MDs and DOs will only compete with IMGs for the same number of residency slots. The pool of applicants will be bigger, true, but the number coming through the GME pipeline and entering practice will be the same. > > So what must change? Most of US GME is funded by Medicare and Medicaid. In 1997, caps were placed on the number of resident positions funded by Medicare. The American Medical Association believes these caps should be lifted and residency programs allowed to grow in those regions and specialties which need more doctors. We also believe that all payers (not just Medicare and Medicaid) should contribute to the costs of GME. > > Both these issues – lifting caps and spreading costs of GME – require action. The AMA encourages physicians to take the lead in recognizing the impending doctor shortage, increasing the number of residents, and obtaining funding for GME from all payers. [http://www.nursingadvocacy.org/faq/nursing\_shortage.html](http://www.nursingadvocacy.org/faq/nursing_shortage.html) > [@Center for Nursing Advocacy](#): > > In the 1990’s, a number of factors combined to produce a nursing shortage in the United States and many other nations in the world. (See ICN Report; Suzanne Gordon, Nursing Against the Odds (2005); Dana Beth Weinberg, Code Green: Money-Driven Hospitals and the Dismantling of Nursing (2003).) During this time in the United States, some nursing positions were actually cut due to the demands of managed care, which had curtailed public and private sector insurance reimbursement rates and placed many hospitals and care facilities in difficult financial positions. Many hospital decision makers, who did not seem to understand or value nursing highly, implemented restructuring plans that had the effect of drastically increasing the workloads of individual registered nurses. Many nurses, who remain sadly underempowered in the current health system, lacked the professional resources to fight effectively against these threats to their patients and themselves. Many tasks formerly performed by nurses–tasks that enabled nurses to perform critical nursing assessments–were now performed by unlicensed assistive personnel, or not performed at all. Short-staffing and restructuring drove away many nurses who could no longer face their growing burnout and/or the realization that they could not meet their professional responsibilities to their patients. By 2005, roughly half a million U.S. registered nurses (about one fifth of the national total) had chosen not to work in nursing. (National Sample Survey of Registered Nurses.) > > Meanwhile, U.S. women have come to enjoy a far greater range of career choices than in the past, and men are still not entering nursing in significant numbers. Men comprise only about 6% of working U.S. nurses. At the same time, the nursing workforce is rapidly aging, and too few new nurses are being trained. > **[Nursing shortage](https://en.wikipedia.org/wiki/Nursing_shortage)** > > A nursing shortage occurs when the demand for nursing professionals, such as Registered Nurses (RNs), exceeds the supply locally—within a healthcare facility—nationally or globally. It can be measured, for instance, when the nurse-to-patient ratio, the nurse-to-population ratio, the number of job openings necessitates a higher number of nurses than currently available, or the current number of nurses is above a certain age where retirement becomes an option and plays a factor in staffing maki... Spending more money on medical bills while not increasing the number of care providers raises “demand” funds while keeping supply static. This results in price inflation. First year macroeconomics. In other sectors of the economy, increased demand-side spending will encourage supply-side growth. But the supply side of medical care is sluggish to respond–& in fact sometimes governments inhibit that growth. [Cap on medical education in Tasmania](http://www.abc.net.au/am/content/2008/s2369797.htm) [from 2007:](http://www.ama-assn.org/amednews/2007/10/22/prsa1022.htm) > [@](#): > > Russell Robertson, MD, COGME chair and family medicine department chair at Northwestern University’s Feinberg School of Medicine in Chicago, said the organization also is gearing up to recommend that Congress approve a 15% expansion of residency and fellowship slots. Congress must lift a 1996 cap it placed on Medicare’s GME funding for the expansion to become a reality. Has that cap been lifted? I’d like to know.[Two years ago, the shortage was being partially addressed, no thanks to Congress.](http://chronicle.com/free/v53/i19/19a02701.htm) If we go to a single-payer system without fee-for-service, the shortage will still be there. Rationing would ideally take place on non-financial criteria, which is better, honestly–but it’s still rationing. Invest in more physicians, even with full subsidies of medical education, & you’ll get more bang for the public dollar than from sinking money into buying meds & paying bills. Of course, that still leaves the malpractice torts & insurance situation, & the pharmaceutical manufacturers. ---
**Author:** ![athelas](https://avatars.discourse-cdn.com/v4/letter/a/5e9695/32.png) [@athelas](https://boards.straightdope.com/u/athelas)\ **Post date:** [June 9, 2009, 11:16pm UTC](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167/40 "2009-06-09T23:16:50Z")
> [@jtgain](#): > > I agree, but what I am saying is that even under your plan, prices are out of control. Let’s say that I have a nagging chest pain. If I have a catastrophic plan, then I will pay out of pocket for a doctor’s visit, EKG, visit to a specialist, back to the doctor, X-ray and then be told to take some Ibuprofen because of a muscle strain. That would easily run $700 or $800 at today’s prices. > > The problem with that is that I don’t have that kind of money lying around waiting to be spent, so people like me might try to shrug off minor pains to save some cash and not go seek treatment until a catastrophic situation arises, causing those costs to increase and have people dying earlier than needed. > > I’m in favor of a market solution that would open up these services to competition and get these prices to go down to more reasonable levels. A 5 minute doctor visit should not be $85.. This is a common fallacy one hears around these debates: that if only we had government mandates for preventative care, we could save money over the long run. From [here](http://www.nytimes.com/2007/08/08/business/08leonhardt.html?ex=1344225600&en=d7df12bae3f08026&ei=5090&partner=rssuserland&emc=rss): > [@](#): > > ``` > No one really knows whether preventive medicine will save money in the long run, let alone free up the billions of dollars a year needed to help pay for universal health insurance. **In fact, studies have shown that preventive care — be it cancer screening, smoking cessation or plain old checkups — usually ends up costing money. It makes people healthier, but it’s not free.** > > “It’s a nice thing to think, and it seems like it should be true, but I don’t know of any evidence that preventive care actually saves money,” said Jonathan Gruber, an M.I.T. economist who helped design the universal-coverage plan in Massachusetts. > > ``` Preventative medicine can produce better outcomes, nobody denies that. If you \*want \*to spend extra money making people healthier, it might sometimes even be the best \*value \*for your money. But it will not **save** money over the long run, despite the wishes of many reformists who desperately need a loophole to reduce the cost of government healthcare. [Previous page](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167.md?page=1) [Next page](https://boards.straightdope.com/t/is-there-a-cogent-argument-that-explains-why-government-ought-not-to-offer-health-insurance/499167.md?page=3)