I've never received significant health care in another country, so I can't say how the US system differs from others with any expertise. But I can say how US health care differs from just about anything else I spend money on:
1. I don't really get to shop for health insurance providers. My employer picks one, maybe two plans, and I can take it or leave it. If I leave it, I am leaving at least $10,000/year on the table, so I generally take it.
2. Even when I am on the market, the phenomenon in #1 does weird things. Once upon a time, when I was choosing my own health insurance, I started a new job with health insurance benefits that I did choose to take. But my start date was toward the beginning of the month, my old insurance wouldn't let me do a partial month, and the new employer wouldn't let me delay opting for coverage. So I was essentially forced to own two health insurance plans simultaneously for a period of time.
3. Nobody knows what care will cost ahead of time, which makes it impossible for me to make any informed economic decisions. I need to see a physical therapist. I called a few places to shop for prices. They all know what the rate for uninsured people is, but the only way we can find out what it will cost with my insurance is if I receive care, they submit a claim, and then we all find out together what the price was, after the fact.
4. #3 creates a situation where they can hide all sorts of excessive charges. When my first child was born, I got lessons on how to give him a bath and change his diaper. Both of which I already knew; I was really just going along with the lessons to be polite. I certainly wouldn't have said yes if the hospital had been transparent and up-front about the price tag on this lesson: about $2,000.
5. And sure, insurance covered most of it... but that didn't make it free; it just means the price was amortized over a large number of health insurance premiums. Unfortunately, I think that this setup makes it all too easy for us to think of these things as free, which, in turn, reduces public scrutiny over where the money comes from or where it goes.
And it just keeps going like that. Compare with signing up for cell phone service. It's a famously sleazy business, but, even with all the hidden fees they like to tack on, at least they're up-front about the basic price of service. With US health care, every fee is a hidden fee. That makes it impossible for consumers to make free, informed decisions, which is the most fundamental precondition that must be satisfied in order for a capitalist market to form.
First we received a bill for the stay in the hospital. And then we received a bill for the doctor performing the delivery. Okay, fine, it makes some amount of sense, that doctor supports multiple hospitals and isn't technically part of the hospital and staff at that maternity ward that is there 100% of the time.
And then the separate bill for lab work, and another for the pediatrician, and another for our baby's stay in the hospital (this one really got me, why?! we were all in the same room), and then another for the lactation consultant, and, and, and...
I don't remember each one specifically at this point, but I believe it was 7 separate bills.
Edit: typos
The way this plays out is that if I hand over my insurance card, the provider will attempt to extract as much money as possible and bill an outrageous amount. The insurance provider has maximum limits it's willing to cover for each billing code and so only covers some lesser amount. You pay the difference.
This is such scumbag behavior.
https://www.usnews.com/news/best-states/articles/2021-07-09/...
Apologies for asking, but when faced with a medical situation do you have any idea when you have insurance what your maximum liability could be?
NB I'm not from the US so I very little understanding of how the system works.
It looks like all plans sold through the healthcare.gov marketplace is required to have out of pocket maximums.
https://www.healthcare.gov/glossary/out-of-pocket-maximum-li...
Is that a hard limit and you'll never have to pay more than that?
- Balance billing - there is no guarantee that the insurance provider will actually pay what the hospital bills. Insurance companies usually have negotiated rates with some providers. So, if you end up at an ER that's out of network (no negotiated rates), your insurance might pay what they think is reasonable and the hospital bills you the excess. Several California-based hospitals are notorious for this. It also happens with helicopter ambulance transport - frequently, they'll bill $50,000 for a ride, insurance covers $25,000, and the patient is stuck with a $25,000 balance (again, made up numbers).
So it is not an absolutely hard limit in all cases, no.
Edit: originally wrote year twice.
There are probably ways that we could combine aspects of greater and lesser privatization to achieve the best of both worlds. I have some thoughts that I've been mulling around for a while:
1. Expand the government to achieve universal healthcare coverage.
-- a. ACA public option.
-- b. A conservative UBI, with the twist that uninsured individuals would be automatically enrolled in the public option and have their premiums taken out of their UBI. (Tangentially, for similar reasons, also pay out a portion of each UBI disbursement in the form of food stamps rather than cash.)
2. Shrink the government and quasi-public entities (insurance providers) to unshackle the invisible hand.
-- a. New regulation to ban copays and set a mandatory floor on deductibles (say, $10k). While major emergencies still need to be covered, and while there still needs to be an entity in between the patient and provider eating the risk of non-payment, it's also desirable from an efficiency perspective for patients to be kept aware of the costs of their care — and therefore incentivized to select more cost-efficient options. The market would then naturally find a more reasonable equilibrium without the need for price fixing, in theory.
-- b. Set up a system of tax deductions and credits for out-of-pocket medical costs. (Preferably such that the poorest would have their costs fully covered in most or all cases, depending on what's fiscally realistic.) This must strike a balance between non-disruption of market forces and ensuring that the poorest in society aren't shy about seeking the care they need. My thinking is that the annual nature of tax filings would be enough to address the former, as patients would still be be out of pocket for up to a year waiting on their refunds, representing an opportunity cost that would be difficult to ignore. To address the latter point, set up a standardized/regulated process for the insurer to send the patient something resembling a credit card bill, which they could pay either up front or up to a year later with accumulated interest.
Parts 1 and 2 are essentially unrelated, and could hypothetically be implemented independently of each other. However, #1 on its own doesn't attempt to address the efficiency issue (thus saddling the government with even greater new expenditures), and #2 on its own doesn't address what happens or who gets left holding the bag when an uninsured patient can't pay their bill (which wouldn't be an issue with truly universal coverage).
I also have a lot to say about what the state should and shouldn't be doing to maximize the general health/nutrition/fitness of the population, but we can leave that for another post :).
I like everything here except this. Won't a significant amount of healthcare (grouped by specialization, hospital, etc) still be funded by insurance and be outside the reach of market forces?
I am also curious whether there are barriers to producers of medicine, healthcare supply, etc from disrupting existing overpriced producers.
If I understand your last point, I really like this approach in the context of my proposal: https://www.rubio.senate.gov/public/index.cfm/2021/3/rubio-s...
>> Re: prisons - This isn't necessarily the case. Florida's private prisons have air conditioning and the public ones don't in part because of democratic control and the private ones have fewer deaths from heat stroke as a result.
> Extremely suspicious comment. Please elaborate on “democratic control.”
Yeah. Also the GP weirdly collapses "more efficient, less corrupt and of higher quality" into "has air conditioning: Y/N." You have to evaluate those things holistically, and it's quite possible that he holistically-better solution is actually worse in some specific areas.
Also I don't have any specific knowledge about Florida prisons, but private prisons are a new(ish) phenomena [1], and "hav[ing] air conditioning" might simply be an unintended consequence of that, because building standards have changed.
[1] You know what I mean, don't nitpick with some ancient example.
But that never actually happened. Externalities were never part of the market.
> But that never actually happened. Externalities were never part of the market.
But isn't the essence of an externality that it's a social cost not factored into the market price?
It may be that some of these cannot in principle be accounted for, and even more which cannot in practice be accounted for.
But I imagine the majority of externalities could be accounted for if we tried.
The irony is if you actually came close to achieving that (e.g. accounting for all externalities in the market price), you'd have something like central planning. That's why externalities are usually managed through other mechanisms.
Also, externalities are only one kind of market failure.
Edit: updated 1960s to 1950s per info in replies
Roosevelt also tried to institute a national scheme in the 30s but labor unions were split on notional vs. employer provided and it became a wedge issue that scuttled the plan. Truman's push for that same national health insurance plan was shot down in ~1949, partially killed by AMA lobbying.
Employers can raise wages, and have been able to for some time, so that's not why we still have it.
We still have it because of tax and other incentives, and because government keeps making policy decisions to protect, and even extend it (e.g., the ACA employer mandate), not because of the employers need to offer health benefits to compete because they can't offer more wages because of WWII-era wage controls.
The fear of losing healthcare coverage a severe fear that people in other countries don’t have to worry about.
Heaven forbid “wage inflation!”
Was the AFL pushing for employer-based and the CIO pushing for national? I don’t even know where to find history like this. It’s virtually impossible for an average person to learn about the history of the American labor movement.
I realized after double checking that it was actually a 1942 Roosevelt bill, and they were trying to figure out how to keep a lid on rising prices during the war. It's also not uniformly good if prices also rise quickly. Inflationary spirals are real, and very bad for regular people.
> Was the AFL pushing for employer-based and the CIO pushing for national?
I'd have to double check.
> It’s virtually impossible for an average person to learn about the history of the American labor movement.
A bunch of this stuff is available in more popular history and online now. "The Devil Is Here in These Hills" is supposed to be good, but I haven't read it.
Emergency services aren't a good fit for markets. For markets to work, people really need the luxury to shop around with some leisure.
Wasn't there some Roman oligarch that ran a private fire department, and basically just used it to extort property owners when they had a fire? Truly market based emergency medical care without legal restrictions would likely frequently resemble that with some frequency.
Edit: Yep: https://en.wikipedia.org/wiki/History_of_firefighting#Rome
> The first ever Roman fire brigade was created by Marcus Licinius Crassus. He took advantage of the fact that Rome had no fire department, by creating his own brigade—500 men strong—which rushed to burning buildings at the first cry of alarm. Upon arriving at the scene, however, the firefighters did nothing while Crassus offered to buy the burning building from the distressed property owner, at a miserable price. If the owner agreed to sell the property, his men would put out the fire, if the owner refused, then they would simply let the structure burn to the ground.
And that's the open market; it gets even more cloudy when we talk about employers being involved, so we have an agency problem as well.
It's a system unlike any other, and I don't think general theories really apply very well as such.
Hospitals increase rates to cover the overhead of dealing with hostile insurance companies. Insurance companies raise rates to match increased hospital billing. Ironically both industries are incentivized to raise rates on customers while trying to gouge each other.
Is it any wonder healthcare is a scam?
Institutions like healthcare, education, public transport, prisons(!) and so on are more efficient, less corrupt and of higher quality when they are in large parts collectively and democratically organized and funded. The "in large parts" is important here: A community should agree on what that means and let the market play out on the edges, or the bureaucratic costs become too heavy _and_ unfair. Decentralization is key here.