There are massive tax savings in single payer systems due to vastly simplified billing. To the point where US government spends enough on healthcare to fully pay for a single payer system.
Thus, Americans also pay enough for a single payer system they just don't actually get it.
Magical thinking right here. The savings by merely switching to simplified billing are miniscule. It's also a bit magical to think that switching to single payer in the USA would result in savings. There is no reason to believe that costs would go down without massive price controls (and thus, shortages/rationing).
EDIT: I'd love anyone down-voting this comment to demonstrate how switching to single-payer in the USA would result in savings without shortages, rationing, or lower quality care. Maybe switching is the right thing to do, but it's best to be honest about the costs.
Medical billing is ~1/3 of all heathcare costs in the US. That's everything from doctors filling out extra paperwork to advertising and profit for insurance companies. It's not uncommon for close to half the man hours at private practice to be spent on billing related activities, doctors just get paid a lot more.
Quality of care is not the only factor. Medicare spends a lot on end of life care without significant benifit. It's not a question of if there is rationing as we only have finite money, it's a question of what form it takes.
Worse a lot of unnecessary procedures and medication degrade quality of life.
> Medical billing is ~1/3 of all heathcare costs in the US.
Citation needed. Just looking up health insurance profits ($13B) vs. total healthcare spend ($2T) shows that profit for insurance companies is only 0.65% of the total healthcare spend.
It wouldn't show up in profits as sibling mentions.
I've seen slightly lower but more recent numbers for hospital admin in the US. Not all of this is 'medical billing' but the majority is (look at the Canadian numbers) and you also have to account for the portion that shows up in the insurer's admin as well (~12% US vs ~3% Canada). There are also substantial admin costs soaked by employers and the subscribers in the US as well although technically not 'medical billing' either.
A simplified financing system in the U.S. could result in cost savings exceeding $350 billion annually, nearly 15% of health care spending."
It also says "Morra and colleagues estimated annual BIR costs in physicians’ practices at $82,975 per physician in the U.S. versus $22,205 in Ontario, Canada [5], i.e., 73% lower."
PS: I would say 100% of the insurance industry excluding doctor payments is medical billing and "Insurance carriers and related activities contributed $450.3 billion, or 2.6 percent, of U.S. gross domestic product in 2014, according to the U.S. Bureau of Economic Analysis." http://www.iii.org/fact-statistic/industry-overview
I agree with this take. A big reason why other countries have lower healthcare costs is because they ration care. I moved from a single payer system (Canada) to the US and saw exactly that.
Want the best, experimental treatment for your cancer? A lot (not all) US insurance companies will pay for it. Canada? You need to wait until the gov't does it's review and says "yes". They often say no.
Now, rationing is not all that bad, as obviously healthcare outcomes in the US aren't X% better (X% being the extra amount we pay for healthcare).
The best analysis I've seen as to why healthcare is more expensive in the US is the McKinsey report.[1] It's a huge report, but what they did was breakdown spending in the US by category and compared it to the average across developing nations.
Interesting findings:
- 2/3rds of the excess spending are out-patient care (i.e. stuff that doesn't happen in the hospital). In other words, Americans get a lot more out-patient things done than in other countries
- In-patient care is barely 10% higher than comparable countries
- Health administration and insurance is ~50% higher, but it's not a big piece over the overall spending pie (~7%)
- The US spends about ~20% less on long term care and 50% less on durables (this is shocking to me)
- Finally, the US spends about 300% of other nations on healthcare investment (you'd need to look at the report to see what that means)
The weird stat that always sticks out to me is the maternal mortality rate being so bad in the USA versus other developed nations in spite of unrationed care. There's a big racial component in that but it doesn't explain the difference (You're more likely to die if you are a black mother in the USA, and there is no physiological reason for that.) https://www.scientificamerican.com/article/has-maternal-mort...
It's an interesting problem to find the cause of. I think some of it is due to unequal access to care, but that doesn't explain all of it.
Some of it is due to how a country measures a "live" birth. Some countries say if the child dies within 24 hours of being born, it was never "alive". That certainly helps improve child mortality measures!
The main source of savings in a single-payer system isn't simplified billing, but increased negotiating power on everything from drug prices to salaries. With that being said, I agree that if every US citizen should enjoy the quality of service, that people with premium health care coverage has, it would probably be more expensive than most European single-payer systems.
> The main source of savings in a single-payer system isn't simplified billing, but increased negotiating power on everything from drug prices to salaries.
You're agreeing with the parent's original point. Salaries in healthcare are far higher in the US than they are in eg the UK or Germany. The US median income is significantly higher than all but a few nations. In the US we don't ration care nearly to the extent that they do in eg Canada, wait times are lower and Americans over-use (abuse) their healthcare and always have.
In France a radiologist will make $150,000. In the US it's closer to $450,000. Nurses in the US will typically make 40%-50% more than nurses in Germany. Good luck hammering all of those pay scales back down without causing huge strikes.
You have to remove a trillion dollars in cost from the system. Only about $100b can be removed from big pharma's cost share. You have to destroy a million jobs (eg the health insurance industry), and slash the pay for hundreds of thousands of healthcare workers by at least 20% to 30%. Even if some of those lost jobs can eventually be reclaimed, the upheaval will be epic.
As typically understood, rationing is allowing each person to have a fixed amount of something no matter what. In the USA, if you want more healthcare, you have many options to increase your consumption. If you want to redefine rationing as anything that isn't yet post-scarcity, sure we have rationing.
Aside: Poor people do get health care in the USA. My brother was unemployed and received over $1 million in healthcare for his son with cancer, and hundreds of thousands of dollars in care for his dialysis treatment and eventual kidney transplant.
1 million in heathcare is still rationing. If say bill gates kid had cancer they would likely spend more money on care in the same situation.
But, as you say until we are post scarcity there is going to be cost benifit analysis. All I am saying is our current system is inefficient, I don't expect we are going to transition before the next revolution.
PS: A lot of government money ends up going to healthcare independent of patient care. Ex: HRSA Grants for Rural Heath systems add up to ~16 billion and are not counted as Medicare Medicare etc https://www.hrsa.gov/ruralhealth/
> Poor people don't get any health care, people with insurance get all the health care they want.
You just revealed that you don't know anything about the US healthcare system. Poor people have free healthcare in the US. It's the lower 20% to 40% income bracket that is getting particularly hammered. The top 50% have mostly good health coverage. The bottom 15%-20% is and has been covered by government healthcare for decades.
I'll repeat it again for emphasis: if you're at or below the poverty line, you get free healthcare in the US. See: Medicaid and several other connected programs that are built just for that and are very large. If you earn near minimum wage, you're going to qualify for free healthcare in pretty much every state. And it's actually decent healthcare.
edit: and I should clarify that yes, this is Medicare and not Medicaid and while I do understand the US medical system I'm not a health policy expert so I sometimes get specific points confused. Sheesh. Why does it take a PhD to figure out how to get medical coverage in the US?
So we are about to have net neutrality repealed over the objection of everyone except ISPs basically. Medicare isn't even allowed to negotiate drug prices, but our govt run single payer system will definitely be immune from regulatory capture. Right?
At the bottom it mentions saving billions of dollars by extending a Medicaid program to some Medicare drugs, but that is not negotiated, those discounts are required by law.
increased negotiating power on everything from drug prices to salaries
Not really. Take a look at drugs. Canada has an entire population of ~35M. United Healthcare (biggest US private insurer) has 40M lives. UHC pays a lot more for things than Canada does.
I would say the single payer benefit is that things can be done by fiat. When the gov't says you'll be paid $X for a procedure, there really isn't anything you can do about it.
The system in Canada isn't even close to the most efficient in the world. Many european countries manage to pay even less and produce even better outcomes.
You're link says nothing about outcomes. Have a source?
It also depends on how you measure outcomes. The US exceeds other countries when it comes to things like cancer outcomes. It does poorly in things like life expectancy which is a terrible way to measure outcomes since so many other things other than medical care impact it.
Every time US healthcare comes up the insane cost and relative poor quality is mentioned, it is met with "hmmm citation needed?" like it's not been covered to death already, then the citations are then generally ignored (like here: https://news.ycombinator.com/item?id=15136962). I do not understand why people are so defensive of such a plainly awful system
I'm asking because I'm curious how they measured outcomes. Most of the studies I've seen are pretty bad. They measure outcomes with a very blunt tool. I was curious if something better was out there.
A national single-payer spreads risk across the entire country, so states that are relatively healthy will end up paying for health care in states where people eat bbq ribs and sausage for breakfast.
I like the idea of a county based single payer systems where counties manage healthcare and they are incentivized to promote healthy lifestyles.
This is a social responsibility. Most European countries do this, Canada does this. While not perfect, the system works. It is exposed to any other warfare system to cheaters, but I would say on a much smaller scale than unemployment benefits for example.
Exactly. Just repeat 'free healthcare', never mind that many people in Canada can't even find a family Dr, let alone get things like MRIs. Michael Moore said we have wonderful healthcare just like Cuba, so it must be true.
Oh it appears that now ERs are shutting down, but hey, free healthcare. Did I mention that you won't get a bill for dying on a waiting list if you use free healthcare in Canada? It's amazing and you can pay for it easily. Don't even have to leave your house to get free treatments.
That's true on average. But if you split the US into wealthy and non-wealthy, the wealthy get excellent care and have better outcomes than almost any other country, whereas the poor fare significantly worse than even many 3rd world countries.
That's why people get upset when we talk about this. Some wealthy people point out that their care is far better than Canada's (which is true) while other wealthy people who care about other humans point out that while their care is better than Canada, not everyone's is. And then of course the poor in America just want to not die of totally treatable diseases.
Exactly, so if you are a median Canadian you're getting very shitty healthcare compared to the median American.
In Canada you still get really shitty outcomes for any chronic illness. Basically if any idiot can identify what problem you have heart failure, broken arm, profuse bleeding you get treated for free, and in a reasonably efficient manner.
If you have anything that requires tests, scans, diagnostics, a specialist, or isn't going to kill you in the next week plan on spending 5 to 10 years on a waiting list / various waiting lists. My friend has been waiting 4 years for knee surgery that prevents her from working.
One of the best things about having a private Dr in Canada is that they know how to work the system and will basically harass the list keepers to bump you up so that the keepers of the lists can go back to doing nothing. Also, most clinics have some sort of consult that you can opt for which makes the waiting list magically disappear. Get a out of pocket brain scan? Voila, brain specialist is available in 2 weeks instead of 2 years.
This is so not the kind of conversation we're trying to have here. Please comment civilly and substantively—don't start flamewars by making baseless inflammatory claims.
Single payer isn't free or a panacea to health care costs, and there are problems in Canada, but the problems you cite are also problems in the US. I end with some thoughts on how free markets and optimization can save us lots of money, so stick with me.
That's rural ERs in Canada in the article you link. Same problem is happening in the US, because many doctors want to live in a city, where there is potential job growth and a host of other benefits, rather then out in rural hospitals, which usually can't pay very much.
This is a systemic issue that affects all rural health care, not a problem with Canadian health care specifically.
Here's a couple of articles from just August about the issue in the US.
As for wait times, again, also a problem in America. Even if we moved to single payer, it would probably get worse before it got better, since it means more people with health insurance for the same number of doctors in the short term, but then the market would likely correct that. Heres an article on us wait times.
Demand for health care will continue to increase as baby boomers age, new techniques arrive etc. That will always drive up prices or other costs, regardless of if we go single payer or keep the current system here. And it's a big enough system no matter what you do that there will always be some waste and greed that can't be cut.
Currently though, what is waste/greed and what is actual increasing cost is very unclear because PBMs and other companies keep things like drug pricing confidential.
If conservatives want to fight single payer, they need to lay out an alternative strategy that will actually keep costs in line without sacrificing care.
Single payer or our current system, most of the health care dollar doesn't go to the insurer under obama care (obamacare mandated a minimum of 80% for smaller carriers or 85% for larger ones, previously it was 50 - 60% so we did get some savings there), so if you want to cut costs, we really need to cut it at the middle or at the provider/manufacturer level.
Now single payer could save something, because operating costs are still higher then in simpler systems (https://newsatjama.jama.com/2017/04/25/jama-forum-where-does...). But single payer has a lot of requirements to be cheaper like the govermnent being allowed to negotiate drug and provider prices. These are things that, except on the state level, most likely would be heavily opposed by medical providers.
Total costs for the health care procedures/devices/drugs/providers are higher to insurers, and that's where most of your money goes, and as any developer will tell you, if you want to optimize, you want to optimize where you are spending the most be it in dollars or in processor cycles. So we have to cut that. And that's what conservatives should be focusing on, cutting the underlying costs, and making the pbms and brokers in the middle be transparent, so that cost savings get to insurers which can then be regulated at the state level.
My first suggestion to that end is always going to be more transparency to allow for a better free market, but that means adding and enforcing regulations to provide transparency, something which conservatives have resisted, despite the success of regulated open markets like stock exchanges. Drug companies spend more of their money on marketing then R&D, ( http://www.randalolson.com/2015/03/01/design-critique-puttin... ) so there is plenty of fat to cut before you start affecting R&d expenditures, and drug companies are one of the biggest beneficiaries of US research grants and tax benefits. Even a congressional committee investigation would be a start. So it's still possible to keep private insurers, but conservatives need to step up.
Note: on a per capita basis countries that don't have universal health care (like the US) spend more on health insurance than countries that do (like Australia)
Presumably the single government-run insurance system is in a much stronger negotiation position with the healthcare providers, forcing healthcare providers to operate more efficiently.
So we are about to have net neutrality repealed over the objection of everyone except ISPs basically. Medicare isn't even allowed to negotiate drug prices, but our govt run single payer system will definitely be immune from regulatory capture. Right?
Why would you presume these things that are almost certainly false for the US.
We pay much taxes, but then again. Everyone does here. If you get sick. A doctor can cost 5€ for a visit, we go to the dentist because we can easily. Our medicine is 10x as cheap easily and if we lose our jobs, we still have a home.
But yeah, if we earn a lot. We pay a lot. No reason to be sarcastic about it. I've always had a job and I'm never ill and I hope it never happens. The system works though, even if we have the largest taxes in the world ( Belgium)
