I actually agree w/ overhead limits, but you also need other efficiency metrics to keep the anti-optimization in check. Or, personally I think we should go to some form of universal healthcare and wipe out private health insurance as it's currently constituted.

Why wouldn't insurers argue for better prices now?

Even in our own VA system, their negotiated prices are lower for drugs than the Medicare part D program, barred from negotiating (and with large pieces managed by private companies).

I think your skepticism should primarily be directed to wondering if private systems can ever negotiate a fair price in healthcare products and services.

The rest of the OECD has universal healthcare, but not necessarily fully public healthcare (the model vary considerably.)

Which just means that there are lots of good proven models that the US could adopt.

https://ourworldindata.org/the-link-between-life-expectancy-...

The most recent life expectancy numbers are the hardest to interpret, the US has the only three-year-running negative life expectancy growth in the first world nations - but some argue we should separate healthcare from the suicide numbers that are a big contributors. I don't know that I agree with that as there is a fuzzy line between healthcare and social care efforts.

Age-adjusted all-cause death rate is the better stat for measuring life-saving outcomes.

Child mortality is certainly a useful stat for its purpose, though.

Are there sources of that stat over time and between nations that you would recommend?

http://apps.who.int/gho/data/view.main.1360?lang=en

It probably still supports the point you are trying to make, I just get grumpy about statistic selection.

I think "only (any large organization) can negotiate a better price" is a little misleading on the surface. On a macro level it should, in theory, be true, and should already be happening with private insurers; when I've looked at my own EOBs, they consistently will list a service, a coding, a billed price, an "allowed" price that is always much less than the billed price, and the amount paid (which predictably matches the "allowed" price). And yeah, when we're watching politicians pontificate, we end up having strong opinions about the total price of healthcare and its effect on the economy.

That said, does anyone _really_ make personal healthcare decisions based on the macro effect on the economy? I personally doubt it.

I posit that the vast majority of US citizens and residents wouldn't care if the annual healthcare spend changed by US$200 million, but any individual American cares A WHOLE LOT if you bill them personally for US$100,000 and their insurance doesn't cover it (or much of it).

It seems to me that a much better approach to this entire conversation is "let's drastically reduce the number of Americans forced into bankruptcy because they or their dependent got sick". My own inclination is that that'll require government intervention, because the incentives for a for-profit insurance company are to pay out as little as possible, but I'm open to anything that addresses that problem.

The proposed alternative is to give tremendous power to an organization with less conflicted responsibilities.

In a larger system, we get lower prices via several mechanisms: - Preventative care replacing ER care due to universal coverage - Larger risk pool lowers per-participant costs - Single payer has more leverage and depth of time/knowledge to regulate/negotiate with individual hospitals

The reality of a competitive landscape, hand of market, etc, that just didn't happen.

That one entity can unilaterally refuse to do business with abusive vendors. They can negotiate for lower prices. They can notice and investigate discrepancies in pricing between similar cases. They are in a position to judge which types of care are and are not cost effective and can refuse to cover the latter.

So that explains why having an insurance company helps, but it doesn't explain why a private insurance company can't perform the same role. For that, we have to introspect a little into how insurance firms work.

An insurance company is, in essence, a mechanism for transferring funds from lucky people to unlucky ones. If your car gets totaled then, in essence, a bunch of other people with working vehicles have all volunteered to chip in a couple of bucks toward buying you a new one. The insurer is mostly facilitating the transfer and skimming just enough off in the process to cover their administrative costs.

The private insurance market works well enough for most types of property because the volunteers can't predict in advance whether they're going to be lucky or not and because there's a realistic upper bound on how much money the unlucky ones will need to be made whole. Neither of these assumptions are true for healthcare. Many people were born into pre-crashed cars, to stretch the metaphor, and at least for the foreseeable future it's not possible to decide to replace a body instead of attempting to repair it.

So we need* some non-market mechanism to incentivize or compel insurance companies to cover the already unlucky: people with pre-existing conditions. But that introduces a new problem. The lucky people are being asked to volunteer to chip in more, and at least some of them will stop volunteering. That causes the prices to go up even more, which causes a few more volunteers to leave, which causes the prices to go up again, and so on. Pretty soon there's no volunteers left to transfer funds from.

So we also need* some non-market mechanism to incentivize or compel healthy people to contribute to our insurance system. And with those two requirements (needs to cover everyone and everyone needs to contribute) we are left with a problem space that the State is really the only entity with the ability to implement a solution. It doesn't have to be socialized medicine, per se, but it does basically have to be big government of one stripe or another.

\* Yes, we do technically have the option of compelling innocent people to suffer and die from otherwise treatable diseases that they're not wealthy enough to afford to cover out of their own pocket. If you're aware of that fact and comfortable with it then okay, but please do understand that it is the societal tradeoff that we would have to make to avoid some sort of serious state involvement in provisioning medical care.

That doesn't always work out as well as you might think. A number of years back Medicare told hospitals they'd no longer pay for UTI treatment, unless the provider could prove that the patient had the UTI when they were admitted. This made sense, because hospital-acquired UTI is a big thing.

The thing is, what hospitals had to do to defend against this was to test everybody being admitted to prove that they already had the UTI. So from Medicare's point of view they were saving, but from a broader perspective they were pushing unnecessary costs (unnecessary tests) onto providers which increased the total amount being spent on healthcare.

It's also worth pointing that what you're describing is an illusion of efficiency arising from Medicare implicitly pushing costs off onto non-Medicare patients. That wouldn't be able to happen if there weren't any non-Medicare patients.

Having worked for companies that do government contract work (DoD, in particular), this line of reasoning always makes me laugh.