Resolved: single payer health care will not fix the US health care system's problems

Great Debates
1

America spends about 16% of GDP on healthcare, as opposed to 8-11% that virtually all other wealthy countries spend.

Health care systems have different setups. Public payer, public provider (NHS in the UK, US VA system), Public payer, private provider (Canadian Medicare, US Medicare). Private payer, private provider (Netherlands, US health insurance). In and of itself, public vs private payer or provider does not seem like the big cause of health care costs.

Switching to a ‘medicare for all’ system would save $400-592 billion a year. Figures vary wildly, the largest I’ve seen is $592. The lowest is closer to $300 billion.

http://blogs.umass.edu/econnews/2013/08/19/friedman-592-billion-first-year-savings-with-medicare-for-all/

However we have a 17 trillion economy and spend $2.8 trillion on health care. Even if we cut $400 billion a year in health care by adopting single payer, that will only shave our health expenses by 1.5% of GDP. We will go from having far and away the most expensive health system on earth to far and away the most expensive health system on earth. If our system were as efficient as Israels we would spend 1.36 trillion a year on health care, not 2.8 trillion.

Israel has a multi payer system, not single payer. They spend 8% of GDP on health care. France has a multi payer system, was recently found to have the best system on earth and spends about 12% of GDP.

Even PNHP, a physician group that advocates for single payer, admits that single payer will not solve the US’s health care system woes. The real problem is how our health care system is run and structured. It is fragmented, doesn’t use public or private market forces (negotiations, transparent pricing, comparative effectiveness, etc) and is incentivized to provide the most expensive treatments possible.

http://pnhp.org/blog/2013/07/24/why-does-u-s-health-care-cost-so-much-the-hidden-in-plain-sight-answer/

The payer is not the problem (public vs private). Many OECD nations have private payer systems and their costs are in line with nations that use public payer systems. The real problem is how our health care system is administered and run (or not). There aren’t enough incentives to cut medical costs, and too many incentives to drive them up.

I don’t know the solution, I’m sure people far smarter than me have figured it out. But evenso, I seriously doubt the actions necessary to change it will happen anytime soon. Maybe on the state level, maybe. But the federal level seems like a lost cause for the next decade or so.

Even if a state tried to impose cost discipline on health care systems, would that really work or would health care providers pull up shop and move to another state?

2

Well, the short answer is that health insurance companies are extremely creative when it comes to ways to make more money. Sometimes at the expense of the patients those insurers insure.

But back to a high level: we have several major problems including: the lack of price-setting mentioned in the OP (nobody knows what anything actually costs), and the ability of private insurers to use all sorts of tricks to maximize reimbursement at the detriment of their members’ health. (I’m leaving out the problems of drug costs, which is a whole different thread.)

Additionally, as a country we are used to wasteful practices that happen because a) front-line providers are keeping 20-th century hours in the 21st century, and b) people are used to doing things a certain way. For example, we need to wean people off using the ER as an after-hours primary care clinic or urgent care center. We’d have to commit to a) opening more walk-in clinics, or b) offering doctors coming to the home (like France). We also have to get physicians to stay open beyond 5 pm so a parent can get a kid with possible strep into the office without risking a problem with the parent’s job.

We can only do this one step at at time. And at every step, we have to convince every single stakeholder that change doesn’t equal TEOTWAWKI.

And that’s just for “regular” care – the problems we have around end of life care, patients with multiple chronic conditions, and pharmacy costs are also a whole different thread.

3

According to Peter Orzsag about 1/3 of health spending in the US doesn’t make us healthier, and makes us somewhat unhealthy. I know Atul Gawande wrote an article comparing high spending vs low spending parts of the US regarding medicare, some parts spent 2x as much per year per beneficiary but didn’t show any real improvements in outcomes.

There doesn’t seem to be any public or private will to change the health system on a fundamental level which is what this country truly needs. Even PNHP admits the changes we truly need are going to be harder to enact than single payer.

4

Much of what Dr. Gawande talks about in his articles is the need to change our expectations of the healthcare system. If a patient with first-time gallstones has an 80% chance of passing them with pain meds, a low-fat diet, and time, surgeons should not operate. Most wouldn’t. But the fact that Americans are conditioned to DO SOMETHING right away is problematic. (I often wonder if this is linked to companies’ leave policies; you can get a week or two off to recover from gall bladder surgery, because it’s surgery; but time off to rest and recover from a gall bladder attack? Hah!).

Americans over-treat and under-care for themselves. That has to also stop.

So I guess the short answer to your OP is that no, single payer won’t fix things. Certainly not on its own.

That said, IMO for-profit and ostensibly not-for-profit health insurance companies have poisoned the well so much that I really hate pushing any more business their way via Obamacare.

5

Do we overtreat here? People visit the doctor more in places like Japan, and they have diagnostics in other countries it just costs less. An MRI is $1000 in the US and $98 in Japan. A surgery that costs $60,000 in the US might cost $14,000 in Israel.

I have heard in the US we push faster for the more expensive treatments vs other countries. I think this ties into the lack of comparative effectiveness and our fee for service system. The incentive for providers is to push the most expensive treatment possible.

6

Well, if you re-read the article you linked, you see a lot of overtreatment in Gawande’s examples.

But, yeah, we do. As a country, I mean. Some of it is because of fear of lawsuits, and some is because we don’t share health record data among physicians. So my GP might order a series of rheumatology panels before I see a rheumatologist for achy, swollen joints. And then the rheumatologist writes out her usual order for tests. Either she doesn’t have access to the patient’s medical record, or she doesn’t look to see which tests were performed lately. So most patients just go and have the blood drawn – they don’t say, I just had eight vials of blood taken last week, please look and see if we really need to do another set of tests.

Also, from your examples last post, I think you’re confusing the cost of a procedure with overtreatment. Overtreatment is, for example, if a patient presents with a complaint of low back pain due to overexertion, and is immediately sent to have an MRI. There’s no need for that and there are far less expensive and useful treatments for low back pain due to overexertion or minor injury.

7

My point is that is overtreatment the problem when the same treatment is cheaper overseas? Assume Japan has 2x as many MRIs per capita. Since they cost $98 in Japan and $1000 here, that means they still spend 5x less despite getting 2x as many MRIs.

My understanding is people in the US generally visit the doctor less and spend less time in the hospital compared to some other nations. But because every service costs more here, it ends up costing more.

Gawande did say 60 million surgeries are performed each year in the US (1 for every 5 citizens per year). And he says that is higher than other nations, but I don’t know what the rate is in other nations.

Looking at this

The US does perform 2x the OECD average for CT scans and MRIs. My impression is we do something like 30 million MRIs a year, and something like 80 million CT scans. Per capita that is far higher than average for a wealthy nation.

But if you assume $1000 a pop, that works out to 110 billion a year. A big hunk of change, but still less than 4% of total health spending in the US. If our use of MRIs and CTs was more in line with OECD averages we would cut our health spending by 2%. It wouldn’t really drive down prices.

Then again, maybe our health system doesn’t have 1 big answer, just 50 small answers that each cut 1% out of what we spend and overuse of diagnostics is just one. Saving 2% of health spending alone won’t fix the issue, but combined with dozens of other things that also save 1-2% it would cut our spending to closer to the OECD average. Other examples would be as you say defensive medicine, or duplication of tests, or terrible overhead, or the fee for service system, or lack of price transparency, or higher salaries for specialists, or no negotiations on drugs or medical goods, etc.

8

It’s true that in terms of reducing overhead, switching to a single payer system would not make much of a difference. But the issue that the US has isn’t that we have a multipayer system, it’s that we view health insurance as a “perk”. The more we get from our employer, the better. Employers give us a lot, so we have a lot to spend, and the health industry buys and spends accordingly.

Switching to a single payer system means that suddenly the person deciding what to finance goes from an HR Rep that wants to make you happy as an employee, looking for a better deal, to a bureaucrat that’s stuck with the unenviable position of lowering taxes and improving national health, with every choice he makes.

But technically, if you even just made the person who is paying for the plans the same person that’s evaluating the plans, it’s likely that there would be more attention put into getting a good deal and less attention into padding an offer.

A single payer system has the advantage that there’s a dedicated team of specialists making the decision. In a system where every citizen has to shop around for a plan they like, some are going to fall prey to some sweet salesman jibe and end up paying for things that are unsupported by science. Others are going to buy plans that really don’t offer a reasonable package for what people really need. But it also means that there’s going to be more experimentation - which isn’t necessarily bad - and more freedom for people to make choices for themselves and what they can afford.

Basically, there’s lots of right answers. The only bad one is the one we have and decided to grow, rather than abandon, under Obama.

9

Really?

Wesley Clark gives us a figure of $2.8 trillion spent on health care. How much of that is taken as profit by insurance companies?

10

I’m personally more in favour of the German multi-payer system than single-payer but its clear America’s anarchic and primitive system of health insurance is driving up costs (this incidentally is the chart that caused my political conversion some two years ago): http://upload.wikimedia.org/wikipedia/commons/a/a1/International_Comparison_-Healthcare_spending_as%25_GDP.png

11

Whether or not single payer will “fix” our problems depends on what problems you think need fixing. If we want to reduce costs, single payer is the best. People tend to want more from health care though than for it to just be cheap, and frankly I’m not sure our government can run such a system as well as other governments do it. See: VA. Imagine covering up of wait times on a national scale affecting us all. Multiple payers means you can always find someone else if you don’t like your coverage. Keeps the government honest when people can opt out.

12

The inefficiencies aren’t limited to the insurer’s profits, though. The entire spend on marketing by insurers, to the extent that it seeks to win business from other insurers, is avoided in a single-payer system. Likewise the considerable amount that insurers spend scrutinising and rejecting claims, or arguing over which of two insureres will wear a particular cost. And there’s the amounts that doctors and other healthcare providers spend to comply with the administrative and other requirements of different insurers, etc, etc. In theory you could have a competitive multipayer system in which all the insurers were mutuals, and therefore none of them were taking any profits at all, and you would still be sacrificing a lot of efficiencies.

13

That number includes everything, IIRC, including visits to walk-in clinics.

Insurance companies aren’t doing badly:

It’s only 5 of the insurers, and there are dozens of others. And that’s a drop in the bucket, perhaps; but other drops add up, including lobbying costs and CEO payments (payments below don’t include private planes, natch):

I’ll dig up other data later; it’s only 6:30 am and I’m under-caffeinated.

14

Doesn’t this assume that all claims will be paid? I’ve never heard of a single payer system that covers everything. The other points you made make sense, but you’ll still need bureaucrats to determine if claims are to be paid or not. And a lot more than you have now, because right now fraud is in the tens of billions. Presumably we’d want to more aggressively go after fraud if we had a single payer system lest it turn into the biggest organized crime racket since Prohibition.

15

It assumes that claims will be paid at a much higher rate. Single payer systems only need to look at two things: (1) is the patient covered, and (2) is the procedure covered? These are really simple questions to answer. If the patient has a national insurance number, the answer to (1) is yes. If the procedure code is in a big book, the answer to (2) is yes. It’s only in the (very rare) instances where the procedure code doesn’t exist that you need bureaucrats to exercise discretion.

In our system, not only must claims be scrutinized for patient/procedure coverage, they must be scrutinized for first payment.

If a Medicare recipient is injured in a motor vehicle accident on the job, there are at least four different potential payors involved, and probably more: (1) the driver; (2) Medicare; (3) the driver’s auto insurer; (4) the other driver and/or his auto insurer; (5) the employer’s workers’ compensation insurer; (6) the driver’s Medicare supplemental plan. Every single one of the insurers involved has to scrutinize the claim and pay or deny payment. Then the ones that are not primary payors have to seek reimbursement from the ones that are.

16

Which might be counterbalanced by the much larger group of individuals enrolled in Medicare.

17

Well, if you want to lower health care costs, there has to be a third question: is the procedure medically necessary? For example, Botox treatments. Used for cosmetic surgery and for migraines. Will the single payer system cover all Botox claims, no Botox claims, or will it have to require written justification? And that’s not the only one. Another example is proton beam therapy for cancer treatment. Really expensive. Will the system not cover it at all, or will it cover it for select patients for whom it could do the most good, or will it cover all claims for proton beam therapy(which would bankrupt the system in short order). Tons of biotech drugs hitting the market these days. National health systems are getting major headaches from these five-figure cost drugs. If they refuse to cover them because of cost, then all the patients who have been told for decades that “Everyone gets grade A health care!” find out that maybe that wasn’t really true.

18

I think it’s more a case of the shortcomings of a government-run NHS-style system vs. Canada’s single payer system. Medicare is closer to what Canada does, while the VA is pretty much the American version of NHS.

19

That thing in all those countries they are having run away healthcare costs too.

And some of those countries have some healthcare plans they pay into for options they get.

20

That’s an issue, of course, but hardly one unique to single payer systems.

It’s not as though private insurers cover experimental treatment today, or don’t have to grapple with the issue of whether to cover a certain procedure.

Where did you get that idea?