It’s a really valid point. IMHO, it’s also another case of “feature, not bug.”
It reminds me of the Bracero Program, or its current incarnation: the guest-worker program.
It hitches you to a particular employer, radically limiting your mobility and options.
Has anybody priced COBRA recently? Proverbial gun to the head (what – too soon?).
And – exactly to your point – the number of people who genuinely might otherwise be entrepreneurs, but “it’s all about the healthcare” is a huge opportunity cost for our country.
To that, I would add – IMHO – the people who might be artists, but can’t/don’t/won’t for the same reason.
We’re constantly told that Medicare runs at a much lower administrative cost than the private-industry average. Between that and the economic impact of adding the young and healthy to the existing risk pool, how can you be so sure of what the economic effect to Joe Taxpayer will be?
That’s a great question, and its answer goes a long way towards explaining why our healthcare system is so messed up.
Free markets work best when everyone has complete information and equal power. And there’s little friction to changing to a new product. Of course, that’s never completely true. But people shopping for food make lots of small purchases and generally have a very good idea of exactly what they are buying and how it meets their needs and desires. And every product has a price right on it, where it’s easy to read. And if one product doesn’t serve, there is generally a competing one right next to it, with very little “friction” to switching products. For most Americans, it’s easy to go to a different supermarket, too.
(There are some issues with the power imbalance between growers and large distributors, but at least they DO have the same information.)
None of those conditions are true for purchasers of health care. Most of us have no way to judge exactly what care we need to purchase. The prices are opaque. I once asked my primary care physician how much it would cost if i got a flu shot from him, and he replied that he had no idea, he worked for a salary at a major hospital and earned much less than he would in private practice so he didn’t have to deal with the pricing end of medicine. Because it’s not an easy answer, the hospital actually charges each person a different amount based on the deals that person’s insurance cut with the hospital. And that was just a flu shot, something i understood and which is widely available and i theoretically could shop for. (My insurance paid the full cost, whatever it was, because that was required by law.)
And when people make major healthcare purchases, they are typically very sick, and not in good condition to comparison shop. And there are a lot of “package deals”, where if you get one piece of the care from one vendor, you need to get ALL the related care from that vendor, so you are locked into a “contract” to purchase a thing you don’t understand for a price that you can’t get in advance.
And that’s just the care part. The insurance is even worse. Most Americans get their health insurance through their employer. Many employers pick one vendor, and that’s it. You want to keep your job? You have a choice of plan A or plan B from US Healthcare. All pharmacy benefits will be administered by Express Scripts. Don’t like it? Find a new job.
The contract is negotiated by someone in HR who no doubt wants to keep most of the employees happy enough, but they are looking at the bottom line for the company, not the actual value to the people using the service. There is no way for an individual to shop, even if they DID understand the arcana that is health insurance.
So basically, all the rules that lead to an efficient free market are broken.
I’m guesstimating the difference for the main income brackets between the US and France. Which is not all down to UHC, but seems like a reasonable starting point to compare.
The US pays more per person for healthcare than any other country, by a large margin. So that increase in taxes would be offset by an increase in wages, as employers wouldn’t have to front the cost of healthcare (or a decrease in premium costs, where the employee pays the premium. Or a combination of the two.)
“If you like, you can pay out of pocket for your ticket."
“How much would that be?”
“Yes, sir, I’ll be happy to get that price for you. That would be $17,885.70.”
“What? For a flight to Chicago? Does anyone actually pay that?”
“I’m sorry, sir, I wouldn’t know. I can tell you that different clients and insurers pay different rates. For individuals, the rate is $17,885.70.”
“Oh.”
“Plus tax. And fuel.”
“Is anyone else cheaper?”
“Sir, again, I couldn’t tell you that. Carriers don’t have public rate sheets. Prices are privately negotiated, so there’s really no way you could comparison shop.”
Not to rub it in, but we don’t need to wait to change jobs. By law, we all get about five weeks of vacation, not counting two weeks worth of national holidays sprinkled around the calendar. I’m in a senior position and get even more time. We take two two-week holidays every year, with lots of time left over.
Nope. Our total net household “tax and administrative expense” burden is lower than it was back in the States. Maybe your assertion is true elsewhere, but it doesn’t apply to me and my family.
While I’m not entirely sure what that means, I think we can safely assume that people in the US industry, people at CMS (Centers for Medicare & Medicaid Services), people in the US government, and people in US healthcare think tanks have or can model out what would happen to the cost of healthcare delivery if we offered Medicare for all and added millions and millions of (generally) younger and healthier people to the risk pool.
I’d be far more comfortable with that kind of analysis than any back-of-the-envelope comparison with another nation.
I’m not sure it is such a great question. (In addition to the very valid points made by puzzlegal.) Ever heard of agricultural subsidies? Or dietary recommendations set by the USDA? Exactly what is “non-socialized” agriculture and where is that practiced?
Not sure how great our system is, causing incredible fertilizer runoff and animal waste, relying on poorly paid migrant workers, factory farms that torture animals, generating excessive corn and animal protein contributing to unhealthy diets and - bringing it back to healthcare - avoidable health problems. Of course, it does generate massive wealth for middlemen who “add value” through processing and marketing, as opposed to the schlubs who actually grow/harvest the raw food materials.
I would say that our modestly regulated agricultural sector shows off both the strengths and weaknesses of the free market, despite some subsidies and other government intervention.
Whereas our healthcare sector is an excellent illustration of how the free market totally fails when none of the conditions it needs to operate are present.
I think the point was about taking longer to travel - you can take three months between jobs without worrying about insurance, correct? Or retire whenever you have enough money to support yourself without worrying about paying for health insurance until you are 65 (which is an issue for many in the US)?
When I was working , I had something like 6 weeks of vacation personal time per year plus 12 holidays - but if I had wanted to take an additional three months of unpaid leave to travel or stop working three months before I could collect my pension or travel for three months before starting a new job , it would have cost me $3000 for my health insurance. ( That’s the COBRA rate). Which can make the difference between being able to afford taking unpaid time or not.
50% more in income tax is less than the $3K a month that my insurance costs between what I pay and what my former employer pays.
I think the point was about taking longer to travel - you can take three months between jobs without worrying about insurance, correct? Or retire whenever you have enough money to support yourself without worrying about paying for health insurance until you are 65 (which is an issue for many in the US)?
When I was working , I had something like 6 weeks of vacation/ personal time per year plus 12 holidays - but if I had wanted to take an additional three months of unpaid leave to travel or stop working three months before I could collect my pension or travel for three months before starting a new job , it would have cost me $3000 per month for my health insurance. ( That’s the COBRA rate). Which can make the difference between being able to afford taking unpaid time or not.
50% more in income tax is less than the $3K a month that my insurance costs between what I pay and what my former employer pays.
Historically, it was insurance, in that most doctor visits, etc… were something you paid your doctor for, and insurance was something you would get for unforeseen issues, like being in an car accident or the like. Very much like auto insurance or homeowner’s insurance works for accidents and fires, in fact.
It wasn’t ever intended to be some sort of health care management scheme.
As medical care got more complex and more capable, it went from being literal insurance to something else, and that’s what got us in trouble.
Imagine if car insurance worked like health insurance. You’d get some stuff for free (wiper blades, tire pressure checks) and some stuff you’d pay some flat fee for (oil changes, light bulbs). But when you need new tires, there would be “approved” tires and tire shops, they’d try to nickle and dime you on whether your tire wear was within acceptable limits for the mileage, and whether the wear was symmetrical or if there are suspension problems, etc… and try to deny your coverage for new tires. And they’d do this after you got the tires on your car, and you’d get a bill after the fact, detailing all the issues they came up with. Meanwhile the tire shops would charge $500 a tire for tires for uninsured people, but only charge $150-200 to the various insurance shops.
Same thing if you need a new water pump, except that the insurance company can override your mechanic and say that water pump replacement isn’t authorized unless it meets certain absurdly strict criteria- it’s got to be leaking water at this-and-such rate, or the deviation of the pump shaft has to be outside of some criteria, etc… and they’ll deny coverage for the water pump, even though your mechanic is saying that’s the reason your car overheats. And a thousand other nonsense things people generally wouldn’t put up with for a second on their houses or cars. Imagine if out of the blue, they decided they weren’t going to cover the mechanic or tire shop you’ve trusted for 20 years, and you now have to pay more or go to some janky place that they do cover.
IMO, it’s due to the creeping nature of the way it grew, combined with lax regulation. I think it’s one of those situations where nobody really realized what was happening until it was too late, and all sorts of anti-competitive/obfuscative stuff had grown up around it to prevent price/cost information from being readily available to consumers.
Among those who have looked into the authorization and billing practices of big HC insurers is … the U.S.Senate Permanent Subcommittee on Investigations.
In October 2024 (yes: fewer than 50 days before this murder), the PSI released this report – 54-page PDF:
A quick look at the Executive Summary (in their crosshairs were UnitedHealthcare, CVS, and Humana, particularly) is pretty damning.
The first paragraph of their Conclusion reads:
Medicare Advantage has grown rapidly in recent years and is, as of 2023, larger than Traditional Medicare. Despite the enormous growth in enrollment, some two dozen health systems have announced over the past year that they will stop accepting Medicare Advantage beneficiaries, with hospitals and providers overwhelmingly citing frustration with prior authorization. Prior authorization was one of the tools given to insurers participating in the program to help them prevent harmful or unnecessary medical services, but as HHS OIG and others have warned, the structure of Medicare Advantage can incentivize companies to use the process to deny care to which patients are entitled. The evidence in this report demonstrates that this is likely occurring at a scale impacting tens of thousands of elderly Americans, and that denials are overwhelmingly occurring in costly but critical post-acute care.
IMHO, the rest of the Conclusion is worth reading.
It also speaks to why the for-profit health insurance model in the US, IMHO, is a much better example of a market failure than of the free market “doing what markets do.”
Or – as always – the hazard of perverse incentives.
As I said before, “the spreadsheet belies the humanity.”
ETA: also notable, from the Conclusion:
Although the Subcommittee’s recommendations in this report are targeted at regulators, this should not distract from the fact that it is insurers who are using prior authorization to protect billions in profits while forcing vulnerable patients into impossible choices. This is particularly troubling when recent analyses indicate that Medicare Advantage is more expensive than Traditional Medicare, with one assessment concluding that, in 2024, the government spent 22 percent more to fund Medicare Advantage plans than it would have had those beneficiaries been enrolled in Traditional Medicare.
Apologies if this is a hijack, but I’m really not sure I agree.
First, personally I’m not sure I have a huge problem with health insurance. I have pretty much gotten all the care I wish/need - at prices I can well afford. I readily acknowledge that is not true for everyone. But the question of what healthcare ought to cost, and what healthcare ought to be provided to EVERYONE independent of their ability to pay - is a sticky issue. Hell - rather than providing more healthcare, maybe we’d have better health outcomes if agriculture were MORE strictly regulated and/or less subsidized in unhealthy respects, such that it was not so easy and cheap for people to eat so poorly!
I’m not entirely sure what a “free market” would look like in terms of healthcare. In many (most?) cases, a relatively ignorant consumer is relying on the expertise of others. Is direct advertising to consumers by pharma an element of a free market? (Disclosure - I am not at all a believe that capitalism and a free market is a wonderful thing.)
And what is the success of our agriculture system? A population with world leading levels of obesity/heart disease/diabetes…?
Not an apologist for our current healthcare system. It is horrible and inexcusable, and its primary gain is to financially benefit persons/entities who are not involved in direct patient care/treatment. Beneficial patient outcomes is almost incidental. Just was surprised to see agriculture - let alone socialized vs non-socialized (whevever that means) tossed into the discussion.
When you most need medical care you are least able to negotiate. You are least able to shop around. You might not even be conscious when decisions are made.
It can also be highly episodic. A person can go years, even decades, without needing any medical care at all then experience a sudden severe injury or illness with costs far, far outside the means of 99% of citizens to pay for.
It might require urgent care - you may not have time to shop around or compare providers or relocate for more advantageous circumstances.
This is very, very different than, say, looking to buy a house or property.
Surgeons are paid to complete a certain task - an appendectomy, or spleen removal, or put a shattered bone back together.
Anesthesiologists are hired to provide an on-going service - keeping the patient both alive and adequately sedated which requires medications given as a particular rate per unit of time. They also start before the surgeon does, and keep going with the patient after the surgeon is done until satisfied the patient no longer needs their care to do basic things like keep breathing on their own. Thus, they will always be involved for a longer time period than a surgeon, and their work can be more easily measured as worth per unit of time. They don’t control how long this interval is - it depends both on the unique traits of the patient (some people have adverse reactions to anesthesia that require more care) and however long it takes the surgeon to do their job.
I suppose it could be done that anesthesiologist pay rates could be listed per procedure but it’s not the way it’s been done. It would certainly be disruptive.
The thing is, this is something the patient would have absolutely no control over whatsoever. You can consent to or refuse surgery, but once it’s underway you are no longer in control. What is the purpose of this “control?” To “encourage” patients to make better choices? How? They are not in a position where they can do anything? Make surgeons work faster? Yeah, great, you want to see the complication rate go up? We left the “faster-is-better” attitude back in the days before anesthesia when surgeons doing amputations were graded on how fast they could do one, and if an assistant lost an occasional finger well, too bad, right? Force anesthesiologists to make decisions based on money rather than medicine? Bankrupt more patients? What?
Nope - this was done NOT for medical reasons but solely to increase profits for the insurance company. That’s it.