Norway spends more than anyone else other than the US, and they do get solid results, but still lag behind a lot of other nations that spend less, such as Sweden and Switzerland. Norway doesn’t really support the argument that a totally government-run system is the best way to deliver health care.
So it seems like, yeah, you can make an NHS-style system work, if you’re willing to spend 50% more per capita than the UK does. And then you’ll still not be as awesome as Switzerland or France.
And I’m fine with that, though I imagine that they’d be down on the list for organ transplants.
But if a 90-year-old is strong enough for surgery and rehab, why not have a hip implant? Do we want people to be immobile and/or in pain?
I read recently that narrow networks are becoming more and more common in private plans, I ‘believe’ the article I was reading said they were about 1/3 cheaper than larger networks. So there is incentive to make narrow plans for private plans too.
My big fear with statewide single payer is that healthcare providers will find better wages in other states so they will leave. This will force the state with single payer to keep raising rates until single payer costs just as much as private insurance.
William Hsiao said that single payer would save about 25% of health costs in Vermont over a decade. So by 2027 the health system will be about 25% cheaper than it would be if they hadn’t enacted single payer. But that 25% is made up of wages for people who work in the health industry. Are they going to take that kind of pay cut or will they move to MA and NH?
It was my understanding a public option was supposed to be taken anywhere medicare or medicaid was taken.
That’s an assumption based on the idea that if a doctor takes Medicare or Medicaid, he’ll also take the public option. But if that was a sure thing, then private insurance companies could also pay doctors less.
The mistake Congress was making was to set the public option payment rates. That, IMO, would probably have been the downfall of the public option. What to pay doctors should be negotiated by the public insurer just like private companies do. By taking that ability away from them they wouldn’t have been able to respond if doctors shunned it.
Doctors take Medicare patients because old people make up a huge chunk of people needing health care. They are not as likely to take Medicaid patients. 46% of doctors take Medicaid patients:
http://www.businessweek.com/articles/2014-04-10/doctors-shun-patients-who-pay-with-medicaid
Medicaid pays less, but also in the market for younger patients, doctors can make more money by seeing people with private insurance.
I’d also note that from my experience, the relative quality of doctors is much greater among those who don’t take Medicaid. None of my current doctors take it. So it would not only likely be a narrow network, but a subpar narrow network made up of doctors who can’t get customers otherwise.
Which might explain something strange someone pointed at in a previous thread. the USA lags in life expectancy by comparison with other nations…until you reach 70, at which point your life expectancy becomes similar or higher in the USA.
Yep. I think that’s a product of how much we spend on Medicare. Although even if we don’t expand coverage to everyone, Medicare won’t be able to be as generous in the future as it is today. Just too many old people and too much expensive medical care available these days that the founders of Medicare couldn’t have anticipated.
I think there could be two factors at work here:
First, as already suggested, heavy skewing of medical resources towards the over 70s, on account of Medicare.
Secondly, life expectancy is correlated with social class. This is true of all countries, but I think particularly of the US (i.e. the correlation is stronger in the US than in comparable OECD countries. The poor die younger. And age 70 may be more or less the crossover point beyond the proportion of the surviving population from a more prosperous socioeconomic background is more than large enough to offset the US’s overall poor standing the life expectancy leagues.
I’m not explaining this very well. I think what I’m really trying to say is that Americans from higher socioeconomic classes have a higher life expectancy than the average in comparable countries, while the reverse is true for the lower classes. By age 70 enough of the latter group are already dead that the over-70s, as a whole, have a higher life expectancy than the international average.
Maybe because you have lost a lot of people who lead higher risk lifestyles and of course poorer people by the time medicare kicks in?
It looks like it was the CRS rather than the CBO, but here’s the document I was talking about (skip to page CRS-16):
(PDF) http://assets.opencrs.com/rpts/RL34175_20070917.pdf
It does argue that doctors are paid more in the US, but it also points out that there are fewer doctors and nurses per capita and that doctors have to pay for their own education in the US, whereas they get a “free” education in other countries (so if you accounted for that, the health spending of other countries would probably rise). And while our doctors are among the best paid in the OECD nations, we’re not double the next best. Basically, it’s probably a factor that helps push us up among the top of the bunch, but so long as we don’t have the most expensive doctors, this cannot explain how we exceed the next-highest spender by 60%.
Pharamaceuticals cost about double, per that document. General medical implements are also priced about double (US, UK, France).
The price for medical procedures is about double. But if the salary of the people doing the procedure is not double, then the remaining expenditure must go towards the implements, the room, and the building by process of elimination.
The overhead for administration of health care (e.g. the NHS in the UK, insurance companies and Medicare/Medicaid in the US) is several multitudes higher in the US than the OECD average, but it’s only 7.6% of total spending so even if you corrected it, we would still be pretty near double the OECD average on spending. And as with doctor’s wages, we are just among the top, not way out beyond the rest in this area, so it would be impossible for it to explain how we exceed other nations in total spending.
Based on my notes from the last time I researched this, if the US could cut back on administration costs and medical malpractice suits, we could save maybe $600-800 per year in spending. That’s significant, but it would still leave us the highest in the world. To get down to where we would expect ourselves to be (near Switzerland and Luxembourg), we definitely need to bring down the cost of pharmaceuticals and medical equipment, and it’s likely that those are indicative of our need to bring down the cost of our hospitals, the number of MRIs and other fancy equipment we buy, and not always buy the newest and best equipment.
US-trained doctors have to pay for their own education. More than a quarter of all American physicians are foreign born, and the vast majority of those come from India, China and Pakistan - where their educations are highly subsidized.
I do expect there to be some sort of uptick in immigration rates to Vermont following the rollout of its SP system, but nothing so enormous that would somehow undermine the entire new infrastructure & force a mass exodus of HC providers. No matter how you slice it, Vermont will still have a sizable population in need of health care, so consequently there will always be money to be made in that environment, regardless of how its single-payer plan ultimately shakes out.
But beyond that, I’m sure that there’s some sort of history we could examine of mass coverage expansions in the US & the subsequent immigration rates to those areas. From my own recollection, the two places in this country with longstanding histories of UHC - San Francisco & the state of Massachusetts - had managed to thrive and persist for several years before the coverage expansions of the ACA. To me, their survival says that UHC systems within the US can prosper in any environment, & won’t somehow be swamped or obliterated by massive influxes of desperate immigrants seeking medical care.
Assume there are 80000 med school students at any given time. Give each one $30000 a year and it works out to 2.4 billion. That is less than 1/1000 of medical spending in this country. So free tuition would be a good idea but it wouldn’t affect costs much.
Also the problem with uhc in Massachusetts is that it didn’t drive down costs. Vermont has a plan that will make their health care 25% cheaper by the end of next decade, but I still worry how providers will respond to that. I don’t think the ma plan bent the cost curve the way the Vermont plan is designed to. Bending the cost curve on the state level is uncharted territory. States have experimented with universal coverage, but not with developing a plan 25% cheaper than neighboring states.
Taking a stab at the lists of best hospital centers in the country from US News, it appears that the random sample I looked up accept Medicaid, including Mt. Sini in New York, Sloan-Kettering, Cleveland Clinic, and the Mayo Clinic (various locations).
As a counterpoint to what I posted earlier I should point out that both within and between cities cost costs for services can vary by several hundred to several thousand percent. A CT scan can run between $250 and $10000 depending on where you get it. Medicare spends twice as much per beneficiary in some cities vs others. So maybe a 25% variance will not be that bad seeing how the system tolerates inner-city and intra city price variances that are far higher.
I have to disagree with many aspects of that analysis. The same medical market sources you quote above show that Canada imports 75% of its medical equipment – almost all of it from the US – so how could item costs be substantially different? It’s true that equipment costs in Canada work out to be less than in the US when calculated on a per-capita basis – roughly $208 vs. $400 – but given about the same per-item costs I would chalk this up to yet another of the endemic cost problems of US health care, namely oversupply and redundancy engendered by the health care business being so profitable because there’s no effective cost control, so providers can still make a ton of money even when there’s a glut of them and equipment sits idle – it all comes down to the same mess of private insurance.
Regardless, the higher expenditure on equipment in the US isn’t really a major cost driver – according to this CDC document, the total of all structures and equipment costs plus durable medical equipment sold at retail is less than 5.3% of all health care expenditures (2011 figures). In contrast, the total of hospital care costs and professional services is more than 58% of health care expenditures; physician fees alone are more than 20%. So that’s where your costs are, not medical equipment. And those are precisely the costs that can be controlled by a single-payer authority. That’s where the big savings come in.
Also, the 7.6% your source quotes for the percentage of health care spending attributable to administrative overhead seems too low by about half. It yields an amount of just $205.2 billion out of a $2.7 trillion in health spending, whereas the document linked in the OP – which is consistent with many other numbers I’ve seen – gives the figure of $476 billion in potential savings in administrative costs.
All of which seems to reinforce the two major areas of cost savings I’ve been talking about: the ability of single-payer or its regulated equivalent to control costs by negotiating standardized fees, and secondarily – a distant #2 but still important – by eliminating ridiculous bureaucratic waste.
I’m not saying I agree with this summation but if it’s true it’s a pretty clear condemnation of our system. You’re essentially saying that even a really bad public health care system still works better than our private system.
There’s also the major issue of preventive care. Many health problems are easier and cheaper to treat if they’re addressed early. People who aren’t worried about high costs will seek earlier medical care and their problems will be fixed at the early cheaper stages rather than later when they become critical and much more expensive to treat.
And there’s the 800 lb gorilla in the room: profit. No matter how you slice it, profit is an expense in any commercial enterprise. Take any two organizations producing exactly identical services except one of them has to pay out money to its investors - the one paying out money has to cost more than the one that isn’t paying out that money. People who want to defend that profit will claim that profit-making businesses will somehow work more efficiently than non-profit businesses. But that’s an article of faith not a fact backed up by objective evidence.
My understanding is that preventative care saves money for people who have serious health problems (the sickest and most expensive 1-5% of people, who eat up 20-60% of medical spending). For them preventative care means the difference between being hospitalized and constant trips to the ER vs being treated on an oupatient basis. Sending doctors and dieticians to their homes, eliminating copays for treatment and medication, etc. saves money for them since they are walking a fine line between being in a hospital vs being treated outpatient. For everyone else it is pretty much a wash.
However I don’t even know how true that is, will that sickest and most expensive 1-5% live longer and use up more medical spending that way?
I believe in the US a person will spend something like half a million dollars on medical care over their lives (somewhere around that). In order to truly cut costs the lifetime medical spending has to go down. I believe with preventative care a major thing that happens is a person may have less spending in middle ages, but by the end of their senior years the spending is higher and it evens out.
The Politifact conclusion is far too glib and simplistic – there is certainly no shortage of contradictory evidence that directly supports the claim that preventive measures do save money as well as lives:
http://content.healthaffairs.org/content/29/9/1656.full
http://www.surgeongeneral.gov/initiatives/prevention/strategy/appendix1.pdf
I think the real answer here is that “it depends” … some preventive measures clearly save money, others not so much or not at all, and also many – even those that may increase costs – contribute so substantially to improved quality of life or to saving life itself that they should be considered a moral mandate.
I would also cite again the example of single-payer in Canada. There are no disincentives to requesting preventive procedures or testing, because there are virtually no out-of-pocket costs like co-pays or deductibles – individual monetary costs are basically zero, yet there are no indications of over-utilization and per-capita costs are far lower than in the US. And this holds true despite a longer life expectancy, perhaps in part because – as other statistics show – Canadians on average tend to be healthier in old age. Preventive medicine including lifestyle counseling can be a tremendous asset in that respect, and some of those effects are hard to measure. Nor am I sure that the “doesn’t save money” studies adequately account for the extremely high cost of ER admissions when someone lets a condition persist for too long and it eventually turns into an emergency, nor can one just gloss over the moral aspect of prevention and quality of life.
They buy in bulk as a nation, haggle more, and probably buy more basic, cost effective things.
That’s data on Medicare/Medicaid. They don’t spend much on buildings and equipment, just the same as an insurance company doesn’t spend much on buildings and equipment, since they aren’t building and stocking hospitals. The cost for the hospital or for a doctor’s education, from the vantage of Medicare/Medicaid/insurance is all abstracted down to the the “physician’s fees”. But as said, we know that the take-home for the physican is in the top 2-3 of the world. It would have to be #1 by a wide margin in order to explain the US’ spending. The amount that the doctor charges Medicare isn’t the amount that he takes home.
I’ll double check over the weekend.