What you say is true about the public option, because it incentivizes insurance companies to dump expensive patients onto the public dole, while charging ever increasing premiums for those who either don’t need healthcare or are self-rationing because of things like co-pays or high-deductibles. Obamacare and Medicaid in tandem also don’t work for the same reason.
It’s not true for single payer systems, who across the world pay less than what we pay in the US. Without special pleading, you have to explain why they’re able to do it and we cannot, otherwise it seems that you’re ignoring the evidence. State-level examples don’t really count here either, because their underlying costs are being determined by prices pressures in the entire US market.
(Also, CAP takes money from pharma, the insurance industry, and hospital conglomerates, so they’re not a reliable source on any of this).
It's also not true for systems with public options, like Germany. You're making a hypothetical claim about the abstract economic incentives of a public option. But like many such economic arguments, without accounting for the technical realities these arguments have exceptionally poor predictive power.
The cost problem isn't about public or private. That much should be clear. Even domestically, if you look at the best run and widely loudly HMOs (e.g. Kaiser, Mayo), which also are more heavily burdened by low-income and sicker patients, their costs are still much greater than what optimists claim can be achieved.
Prescription drugs and administrative fees account for at worst 25% of expenditures. The real costs are in the practice of medicine in America: compensation, structure of surgical units, organization of hospitals, treatment recommendations, manufacturing industry, FDA regulations, etc. Single-payer doesn't address any of this directly--at best indirectly, and only if you're really optimistic. Obamacare reforms did try to address some of this (it's why it's gargantuan), but with mixed and often poor success. If you want to fix healthcare, it's these unsexy, complex, and hidden things that need to be addressed.
The debate over single-payer is a debate among armchair pundits, which often includes healthcare professionals. (Just like software programmers cargo cult poorly supported ideas about improving the software industry.) Maybe, after accounting for technical realities, an all-private, public option, or single-payer system may be marginally more efficient in the United States. But nobody is making such arguments. The debate is far too abstract, with unsupported, sweeping claims about comparative efficacy.
It’s not at all abstract, you’re just obfuscating. If your concern is costs, we should have a fully nationalized model like the UK because that has lower expenditure per capita than single payer or mixed public-private systems. Or, if we can’t have that, have single payer, because it too still has lower costs than the mixed systems in the developed world.
It’s not cargo cultism by way of arguments from analogy. It’s Americans irrationally clinging to their exceptionalism in the face of stark counter examples while their people die in the streets, ration care, and go bankrupt.
THIS. I don't know why this isn't being said more openly, more often and more widely. It's absolutely the crux of the matter. Yes, it will be great if we get M4A or somethng similar, but it's not going to solve the cost issues, which are bigger (or under any conditions, at least as substantive) than the insurance system itself.
Can you explain why this is supposed to be true? The benefit of a "public option" is supposed to be that it would theoretically reduce costs by eliminating insurance company profits. The government insurer would presumably still charge premiums and set them based on actuarial risk, so why would it disproportionately attract high risk patients? It's not as if private insurers would be allowed to cancel your policy after you get sick and dump you on the public insurer.
> It’s not true for single payer systems, who across the world pay less than what we pay in the US. Without special pleading, you have to explain why they’re able to do it and we cannot, otherwise it seems that you’re ignoring the evidence.
The explanation is simple. With single payer the government is a monopsony buyer, so it "negotiating prices" is really just equivalent to price controls. Price controls can certainly lower prices, but they do so by creating shortages.
In medicine the primary cost isn't the unit cost of manufacturing the pill, it's the R&D cost of developing it and performing clinical trials. So the shortage is of medical R&D. Price controls reduce the supply of new medicines -- that is what other countries do to have lower costs. They piggyback on all the money paid by patients in the US and used to develop new medications that are then used all over the world.
So the US pays more for drugs because the rest of the world isn't paying their fair share of the R&D and we're subsidizing them.
Many drug prices are too high but 80% of rx in the US are generic, and US is middle of the pack in terms of drug spend as a percent of HC spend compared to OECD countries
Drug prices "feel" higher bc copays are higher for drugs than office / hospital visits. If the goal is to reduce actual costs rather than perceived costs, we should look at hospital and provider costs, not just drug costs. But hospitals are huge employers with lots of political power, not to mention large lobbying budgets
Is there a summary of the findings that gets to the root causes of why healthcare is so expensive in the US? And likewise for the difficulties? It would be a useful read for me. :-)
Likewise, total billing and insurance related (BIR) administrative costs are ~$500 billion.[2] (Year unknown.) Or roughly 15% of total healthcare expenditures. And that's up from $471 billion in 2012[3], even though the ACA capped insurance provider administrative overhead and instituted many other reforms intended to address these costs.
Plus, it's odd that people on both the left and the right who are convinced that lobbyists control Washington will simultaneously hold the notion in their head that either a public option or single-payer would be able to consistently cap reimbursements and contain costs. If they're right then it's a miracle Medicare and Medicaid do as it as much as they do, and impossible for it to do so once the Federal government is directly reimbursing the majority of healthcare expenditures. Indeed, if it were possible then defense expenditures would be more efficient and a fraction of what they currently are.
These rosy estimates are ridiculous. We have over 10 years of direct experience with substantial and serious healthcare reform. Obamacare attempted and does enact a variant of almost every concrete reform imaginable. Whatever you think of Obamacare, you can't deny that it has provided mountains of empirical data about the difficulties and promises of containing costs. And yet Obamacare opponents on both sides--those who want to return to the pre-Obamacare system, and those who want a public option or single-payer--willfully ignore the evidence, unchastened by reality.
A California congressional committee looked at the potential costs for single-payer in the state and it would have required an additional $200 billion/year in tax revenue even after accounting for diverting existing private and Federal expenditures. That's what a cold, hard, realistic examination of the facts looks like even by those predisposed to enacting it. Maybe that $200 billion would be worth it; from a moral perspective it certainly seems so. But to deny the costs is to invite failure and financial ruin as not even a majority of Californians, let alone Americans, are willing to make that sacrifice.
We need to figure out how to better solve the cost problems before we continue to wade further into the waters. Otherwise we're just going to drown. If you look at all the other healthcare systems around the world with both better outcomes and lesser costs, neither single-payer nor a public option are defining characteristics. Rather, they run the gamut from mostly private to mostly public. It we can't lower costs with Obamacare, which has both substantial public and private components (and thus opportunities for exploring structural efficiencies across the spectrum), switching to single-payer or a public option won't move the needle.
[1] https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
[2] https://www.americanprogress.org/issues/healthcare/reports/2...
[3] https://www.ncbi.nlm.nih.gov/pubmed/25540104