What will it take to convince people of this? Our society already accepts that markets aren't a suitable medium for every human endeavor, how long must we continue to experiment with private (basic) health insurance before we add it to the list of exceptions?
If our health sector ran as efficiently as everyone else's (as a fraction of GDP/capita), the money we currently pay for medicare and medicaid would suffice to provide universal coverage for every single person in the US.
> If our health sector ran as efficiently as everyone else's (as a fraction of GDP/capita), the money we currently pay for medicare and medicaid would suffice to provide universal coverage for every single person in the US.
This isn't an apples-to-apples comparison for several reasons (some which overstate the amount of money, some which understate).
One, there are a number of things which fall under Medicare's budget which you and I wouldn't think of as the "main" purpose of Medicare in this context (ie, providing medical insurance to the elderly).
On the other hand, look at the profit margins of any hospital broken down by insurance status. Virtually any hospital hemorrhages money on uninsured patients, Medicare patients, and Medicaid patients. They make this up by charging patients on private insurance, and in the end eke out low single-digit profit margins if they're lucky (most aren't). If you're on private insurance, you're essentially subsidizing the medical care of the aforementioned groups (whether you pay it in the form of your deductible, or in the form of your premiums[0]).
As the largest payer, Medicare has the leverage in order to decide what it will and will not pay for, and providers have very little choice but to accept that, whether or not it's economically feasible for them. (This is the exact inverse of the situation most of us are in with our ISP/cable providers (we have an essential monopoly on broadband access in most parts of the US). When there is a single purchaser, this is known not as a monopoly but as a monopsony[1])
It's easy to say that "costs are too high" - that's fine, but where are they too high?
The easy response to this is that hospitals and doctors are making too much money. But in reality, most hospitals are struggling just to say solvent, which is why we've seen massive consolidation in hospitals in the last several years as hospitals go out of business. The same is true of doctors, who are selling to these larger hospitals because their private practices are now financially unsustainable[2]. Of course, this really just pushes the problem up the food chain, because those same hospitals are already struggling to keep the lights on.
I don't really have an answer to this, by the way... I just want to relay an appreciation of why the situation hasn't been fixed yet - it's very complex, and nearly every option involved has significant, serious tradeoffs that nobody really wants to address (whether for political reasons, ethical reasons, or otherwise).
[0] Remember that the size of your premiums are (loosely) linked to the expected value of providing medical care for you. Mathematically this is trivial to show - in reality, the market isn't so efficient, but it's simple enough to say that if your insurers' costs go up, in the long run, your premiums will as well.
[2] This 116-page report gives a very extensive analysis of the economic state of physicians. Don't be fooled by the title - this trend began long before the ACA, even though the scope of this study was the impact of the ACA specifically (which has contributed to the trend which previously existed): http://www.physiciansfoundation.org/uploads/default/Health_R...
It really is, and has nothing to do with the current state of Medicare and what it covers. Our per-capita government health care expenditures are far higher than systems that both have better outcomes and that also don't charge at the point of delivery.
Our doctors make twice as much as everyone else's doctors, and that is only sustained because they are both protected from competition from foreign doctors, and also restrict supply domestically. Our drugs are 10x the prices paid in other countries. Our broken patent system contributes to massively bloated prices in medical devices.
We wouldn't have a government budget deficit if our system was as efficient as any other system in the developed world. The saddest thing is that in after our government spends more than everyone else, we as individuals then go out of pocket even more, and the majority of our bankruptcies and foreclosures are a result of medical difficulties. I would go on, but all of this is as boring and obvious as it is ultimately unsustainable.
The statistics on medically-related bankruptcy are usually flawed, and overstate the extent of this problem. They usually assume that if you owed more than $(small amount) in healthcare debt, (exact amount varies by study,) the bankruptcy was caused by this debt. Some of the better studies use healthcare debt as % of total debt accumulated in year(s) before bankruptcy, and come out with much lower figures.[1]
It makes sense that if you owe a lot of money, some of it would be to a sector which makes up a large part of the economy, and an even larger part of consumer spending. To put it another way, if you measured the impact of car debt the same way that most studies measure the impact of healthcare debt, you would see that cars cause many, if not most bankruptcies (which is an absurd result, as most people can easily liquidate a car and move to a lower cost option).
[1] will get a citation when I have a little more time
Your drugs are expensive because the rest of the world freeloads by artificially restricting the selling price of drugs, leaving the US to bear the brunt of the R&D costs.
Your FDA and legal system pushes up the price of medical devices.
But yes, you have the most unnecessarily complex and convoluted health care administrative structure known to man.
Often times there are very good reasons for those restrictions, especially when pricing for a drug deviates dramatically from actual R&D / operations costs. Take the case of orphan drugs:
Besides runaway pricing, many drugs for which companies are given patents and sole-distribution rights, have already been on the market for decades, just never with proper FDA approval. There are other tax incentives and grants provided as well for reintroducing "new" drugs that were already on the market.
>It's easy to say that "costs are too high" - that's fine, but where are they too high?
I have two (totally anecdotal) answers, from my own experiences and those of my former partner, who spent 15 years working in hospitals:
1 - Administrative overhead. Especially with billing and insurance.
2 - Practices, procedures, and policies to prevent lawsuits. Needless waste, lack of reuse of items that could be cleaned, and safely reused, high premiums for malpractice insurance, training efforts and refusal to make decisions out of fear of suits.
"it's even less efficient that its government-run counterparts" Because the VA System is so lean, mean and well run. All health care should be modeled after the gubberment Rolls eyes
I'm a physician, and I have worked in several VAs, but don't work in one presently. They vary significantly in quality, but the good ones where I have worked are excellent by any standard. In a good VA, the bang-for-the-buck is untouchable anywhere else in the US health sector without compromising on good care. Sadly, bad ones are still bad.
What will it take to convince people of this? Our society already accepts that markets aren't a suitable medium for every human endeavor, how long must we continue to experiment with private (basic) health insurance before we add it to the list of exceptions?
If our health sector ran as efficiently as everyone else's (as a fraction of GDP/capita), the money we currently pay for medicare and medicaid would suffice to provide universal coverage for every single person in the US.
http://healthcarereform.procon.org/view.resource.php?resourc...