With single payer health plans, whither insurance companies?

Great Debates
41

Shared risk is good for society, even though it’s bad for the economy … it 's better for a thousand to take one cut than it is to let one random person take a thousand cuts …

Huh? … why were pension plans even holding J-M stock when it went down? … maybe I’m misinformed but I thought IRA’s and 401(k) plans had strict limits on the quality of stock … with piles and piles of lawsuits, why would security rating companies be grading J-M stock as “AAA”? …

Anyway, the government never nationalized the asbestos industry … it just simply died of it’s own accord … here we are talking about nationalization the health care insurance industry, government taking over and otherwise healthy and beneficial sector … if you think this is okay, then why not nationalize the health care industry itself, instead of the insurance companies …

If you had ever paid capital gains taxes, you would understand my statements better … just because we got a check for $750,000 this year for a house doesn’t mean we’ll be paying taxes on the entire $750,000 … there’s a form we fill out and include with our return so we won’t pay taxes on the entire amount …

The principle is that we always get to keep our after-tax income … the government can’t come in years later and say we have to pay more taxes on it, nor can the government just simply take the money …

The gradual switch-over would work if it could be keep secret … because once we announce that health care insurance stocks will be gradually reduced to $0.0001 per share over ten years … the prices will crash right away, and hard working folk lose capital … I think government has to buy those shares, buy the hospitals, run Big Pharm … the British did this in 1945, and now they have a wonderful system …

42

I’ll ignore this weird pair of platitudes, unless you can relate it to the context.

You seem to have a very weird idea of stock investments, as though there was some sacred authority telling the good people when to sell so losses are not a concern. And, ignoring pension fund misunderstanding, you ignore ordinary people owning shares not via a pension fund. :confused:

First we’ll need a cite that the health insurance industry is “beneficial.”

Even ignoring that misconception, your response is Wrong. Was it wrong for government to sell airwaves to phone operators, degrading the fixed investment in land lines? Was U.S. support for telegraphy unfair to the Pony Express Company? Is support for public schools an on-going assault against education?

The government goes into business providing a “public option.” If unable to bring their costs down, private insurance companies will need to be content with niches. The intent of a smarter health “insurance” industry is a bit like no-fault auto insurance. Laying off the hundreds of thousands of insurance bureaucrats who interfere with health delivery is beneficial. Why on Earth do you imagine differently?

This is not too sensical. Your condescension about capital gains taxes is particularly amusing since in a previous paragraph you demonstrated faulty stock market knowledge.

43

But … the … government … wouldn’t … be … taking … your … money … by … implementing … single … payer … nor … imposing … new … taxes … on … your … previously … taxed … income …

The … government … would … just … be … doing … something … that … made … your … investment … in … a … health … insurance … company … much … less … profitable … to … the … point … it … may … go … out … of … business … and … your … shares … become … worthless …

And … there … would … still … be … plenty … of … ellipsises … to … go … around …

44

If you don’t understand shared risk, then I can see why you don’t understand what I’m posting … just some advice, don’t drop your homeowner’s insurance just because the mortgage is paid off …

45

That’s a meaningless statement unless you explain in what way your statement was “misread” and what you actually meant. What you said and what I responded to was this:
Many of the opponents of single payer, insist on only one way to do it: have tax money pay any bills presented, without question. That would certainly cause the explosion of expense that they insist is inevitable.
In point of fact, unlike private insurance, single-payer systems and their equivalents all over the world do exactly that; that is, they establish an upfront schedule of services and fees and within that framework they pay all bills presented, in full, without question. This is absolutely fundamental to how single-payer works, in stark contrast to the traditional insurance model. It does not lead to an “explosion of expense”, and indeed it streamlines the process and saves money, nor does it lead to increases in fraud, for the reasons I stated upthread.

As also stated upthread, you are also incorrect about malpractice suits being a significant contributor to health care costs. Like some others here, you don’t seem to fully grasp the health care economics that drives single payer cost savings. If I’m not understanding you correctly and you meant something different, you haven’t been very clear on what it is.

46

It’s important to see the world as it is, not how we wish it to be. Nobody is going to work for free, or nearly free, or work their ass off after years and years of medical school for minimum wages, jaw dropping liability, turn over profits to a government, drug companies won’t navigate years of bureacratic mine fields of litigation and red tape to bring new medications to the market just for the hell of it. It doesn’t work that way, never has and never will. I don’t like this arrangement either, but it’s the reality. Competition is a key component of excellence and progress in any field of endeavor, as well as the profit motive.

47

If we are to see the world as it is, the first thing we notice is that other developed nations tend to do better with different setups. It is the way it works.

48

Let me show you how you again mixed things up, even as you wrote your post and quoted mine.

First, I’ll highlight some key words you are ignoring/overlooking in what I said:

“Many of the opponents of single payer, insist on only one way to do it: have tax money pay any bills presented, without question. That would certainly cause the explosion of expense that they insist is inevitable.” Pay attention to the fact that I did NOT say, either that existing single payer systems work that way, OR that I thought that they should. I described what many American OPPONENTS of single payer are PRETENDING they are all about, in order to fool everyone into voting against them.

“As also stated upthread, you are also incorrect about malpractice suits being a significant contributor to health care costs.”

Again. I did not say that they were. I said that OPPONENTS here in the US, particularly the Republican Party, PRETEND that they are the main problem, so that they can in turn PRETEND that they can fix everything simply by limiting lawsuit payouts.

I can’t make things more clear, when people aren’t reading what I did say to begin with.

I am personally convinced, after a great deal of thought, and listening to most of the arguments by all sides, that medical support in the United States needs to be recognized as NOT belonging to the world of commercial competition and profit-making business.

I am persuaded on more than one level .  First, the US economy and businesses are in direct competition with a world where most businesses DO NOT have to shoulder the burden of medical care for their employees.  Insisting that they do so here, is therefore anti-business.  It certainly doesn't meet the idea of creating an "even playing field" for capitalist enterprises to compete, and it forces businesses to reduce wages even further, in order to compete.

Next, the basics of medicine themselves, are the reverse of capitalist profit-based models. In order to make money with medicine, you have to find ways to charge as much as you can, for the least amount of expense in return; and you are best off, if rather than seeing to the HEALTH of your customers, you keep them in thrall to your medical support instead. And, of course, do as insurance companies have always done, and reject anyone who really needs medical help, and let them die.

It is BECAUSE medicine as a profit center makes zero sense, that delivery of medical support is so incredibly distorted in the United States.

49

You are making unsupported assumptions. No one has said that people in the medical field would have to “study for years and then make only minimum wage.”

And yes, drug companies WILL work to find better products, even if they are NOT absurdly over-paid for them. If you insist that ONLY overpaying for things that you want is necessary, then you’ll need to explain why wildly overpaying EVERYONE isn’t necessary. You DO want all work to be done well and competently, don’t you?

And no one has said that “all profits are to be turned over to the government,” so that’s just nonsense.

As for the myth that “Competition is a key component of excellence and progress in any field of endeavor, as well as the profit motive,” that has repeatedly been proven to be mostly bollocks. The reason why so much regulation DOES exist, is because of the many MANY abuses of the for-profit sector. Certainly in an ideal world, where everyone has a conscience, and thinks of their fellow man, and of the Big Picture at all times, competition would always result in ever better and cheaper products and services. But in the REAL WORLD, what has happened again and again, has been maneuvering for momentary advantage, then manipulation of the markets in order to force customers to buy lesser products for higher profits.

This is because in general, people who follow the mythic IDEALIZED version of capitalism, are incredibly rare, and are stamped out as quickly as possible by the rest of the competition, in order to go back to cheating their way to short term high profits as quickly as possible.

50

Thanks for the clarification. I only quoted the last line in the interests of space since the whole post is just above.

I agree with a lot of it but I still think some of it is misleading. You do state that it’s “opponents” of single-payer that insist that it pays all bills without question, but then you appear to agree that, if true, this really would lead to an explosion of costs. I think it’s important to understand that single-payer really does work this way (as long as “all bills” is understood to mean all bills for procedures on the fee schedule) and that this is one of its primary strengths, and it does NOT lead to higher costs. Ditto for any suggestion that malpractice insurance is a major cost issue, although it’s an issue in itself to the extent that in the US it’s out of control.

When criticizing medicine as a profit center, I think it’s very important to distinguish between the provision of health care funding as a business model and health care delivery as a business model. It’s the funding aspect (i.e.- the traditional insurance model) that is so counterproductive because, as I’ve said upthread, health care needs totally don’t align with or respond to market forces. If someone is stricken with an illness, it is utterly bizarre and reprehensible for the question “how much money do you have?” to come up in any way shape or form, directly or indirectly, as if the patient were someone shopping for a new refrigerator, and the US is the only advanced country on earth in which it persistently does.

There is nothing necessarily wrong with medical care delivery as a profit center, as long as we recognize that the public interest requires it to be well regulated. One of the most important things that single-payer does is establish a negotiated schedule of uniform fees for all medical procedures. Within this framework there’s nothing wrong with doctors being self-employed proprietorships or an incorporated group.

I’m on the fence about major hospitals being for-profit but generally not in favor of it. In Canada they are almost all non-profit, run by independent boards of trustees, but a few for-profit centers have been grandfathered, and they seem to have a mixed record. The Shouldice Hospital in Toronto is an interesting example of a grandfathered for-profit. On one hand, they are considered a world-class center of excellence for their specialty of hernia repairs, and while they may charge what they like for their many out-of-country patients, they are subject to the usual cost controls for domestic patients. On the other hand, as a for-profit business, their business-driven obsession with their track record causes them to accept only patients who fit their low-risk profile. For-profits may also be inclined to engage in unwise cost-cutting at the risk of the best medical outcomes.

51

Thank you for attacking my puncturation … I’m glad someone here agrees my arguments are unassailable …

52

That’s an unusual point, is there a cite for it?

53

I’m not sure which aspect of my statement you’re asking about, that single-payer always pays its bills, or that this policy doesn’t increase costs. I’m surprised you find any of it unusual.

On the first point, this is really fundamental to how single-payer works and how it has to work, because unlike traditional insurance, there is no mechanism at all for adjudicating individual claims, and the patient isn’t even involved. There is an entirely different method of cost control, which plays out when the fee schedule is periodically negotiated between the medical association and the government, and is then pretty much automatic.

The funny thing about that is that it leads to a situation that is the exact opposite of conservative fearmongering about “government meddling in the health system”, because in fact it’s in the traditional private insurance system that bureaucrats meddle rather intensely in the clinical process by scrutinizing each and every claim, whereas single-payer not only doesn’t do that, it couldn’t even if it wanted to, because it’s not structured that way. This absence of clinical meddling – and the process of ensuring essentially automatic hassle-free payments in public health insurance – is rather ironic to those who fear “government bureacracy”, and has come to be known as “Reinhard’s irony”, after Princeton health care economist Uwe Reihardt.

Herewith some cites on that:
It is Reinhardt’s assertion that the absence in the United States of an overall program of budgetary control over medical expenditures, as is characteristic of the prominent European systems, results in unparalleled micro-management at the clinical level to achieve cost control unattainable on a larger scale. He writes that “…if the bureaucrats cannot somehow impose upon the healers an overall budget constraint ex ante, then they will sooner or later be driven to control their outlays on an ongoing basis, by monitoring each and every transaction for which they pay—that is, by second guessing both the providers’ clinical and pricing decisions” (Reinhardt, 1988). This appropriation of the clinical dimension of autonomy would be regarded as intolerable by physicians in other medical care systems. He suggests that “European and Canadian physicians would be appalled at the numerous intrusions into clinical decisions now routinely made by these external monitors in the United States. They probably would rise up in arms over that loss in clinical autonomy” (Reinhardt, 1988).

And this:
In contrast to the United States, France, Germany, and Canada have virtually no government or payer intrusion in clinical practice. This observation supports what may be called "Reinhardt’s irony:

[INDENT]The less tightly society controls the overall capacity of its health system and the economic freedom of its providers to practice as they see fit and to price their services as they see fit, the more direct appears to be the private or public payer’s intrusion directly into the doctor-patient relationship-the less clinical freedom at the level of treatment will payers grant providers.
https://www.nyu.edu/projects/rodwin/payment.html[/INDENT]
And if what you’re asking about is costs, well, the per-capita health care costs of OECD nations is pretty well established. Canada, in particular, which is so socioeconomically similar to the US except for the single-payer structure of its health care system, has just a bit more than half of US per-capita costs:

54

The simplest way to switch gradually is to lower the medicare age one year every year. So this year everyone over 64 is covered, then everyone over 63 and so on.

Although I have and pay for supplemental insurance, the only reason I bother is that covers me outside of Canada. For the rest, I pay out more for the insurance every year than I get back. I really want to insure against losses I cannot bear. My reimbursements so far have all been for expenses that I certainly can bear. But possible costs outside of Canada are potentially unlimited.

55

I heard (via a Michael Moore movie? :slight_smile: ) that family doctors in Britain are compensated by how healthy their patients are! The doctor thus has a strong incentive to get you to stop smoking and to start working on your weight problem. This is opposite to U.S. incentives in some cases — of course no doctor would wish his patients bad luck, but injuries and diseases probably increase his income!

You forgot to mention that the government bureaucrats planting the mines and red tape are lazy hateful people who couldn’t get a real job. :slight_smile:

On a more serious note, recently a (new?) Doper commented that he was involved with upper management of a pharmaceutical company. He stated that drug efficacy and safety is dependent on government regulation; without it many drugs would be unsafe or ineffective.

56

This is what I was questioning. The graphic shows public and private expenditures in the US. Adopting single payer means all of it becomes public expense and will require new and massive revenue streams. This is the focus of conservative opposition.

I’m not sure what other, lesser objections exist beyond that, but I would agree that the mechanics of single payer do not raise costs.

57

I recall previous discussions of single-payer healthcare on this Board, where at least one “conservative” insisted it be funded with no new taxes, and wondered if it could then be funded. I think he found this doubtful and acted like this was some big Gotcha! :eek: :cool:

58

Romneycare worked by reallocating public expenditures from the fund that covered reimbursement of health care providers for care to the uninsured, and setting up insurance for them instead - with no new taxes.

59

Excellent point … for the exact same wage, doctors would be far better off preventing health issues than curing them … “a pence of prevention is worth a pound of cure” …

I’m not a socialist, but I do believe some markets are very poorly served by the free market … and health care is one of these … the rich have good reasons to pay for universal health care, their profits are based on the labor of others and these others will be more productive and profitable if they are healthly … win/win situation …

I don’t know if this is still the case in Cuba, but at one time the government would draft the best and brightest students into the medical corps … send them to medical school … and once returned to The Island, these new doctors would be assigned a hundred or two hundred people, that’s their career … so the doctor can work really hard curing disease, OR they can visit all the homes and prevent disease … Cuba’s health care outcomes were comparable to that in the USA … it’s not about being cheaper, it’s about being better …

60

No, why would you assume that “all of it becomes public expense”? The graph shows you that in every country, some portion of the total expenditures are private. It also shows you – and this is the most important part – that the US already spends more on public health care than any other country except Norway. In particular, it spends more on public health care than Canada, which has a very similar economy and which for a lesser expenditure gets universal care for everyone with better outcomes in terms of important metrics like life expectancy, infant mortality rates, and quality of life in old age.

Clearly something is really messed up in the way that the US administers its health care, and we have often discussed what those things are; they are all directly and indirectly due to having private businesses form the foundation of health care funding, which is grossly counterproductive in every possible way. It’s trying to jam a square peg into a round hole by first pretending that an essential human service like health care is just a market commodity like a kitchen appliance, and then trying to patch over the moral failings of such nonsense by applying a vast patchwork of costly and inefficient half-measures like Medicaid and EMTALA. Even Medicare is afflicted by this syndrome. I never cease to be amazed at its staggering complexity, all of it due to having to integrate and co-exist with this mess.