Has Universal Healthcare Really Come to California?
Many Americans have begun to question why, in the wealthiest nation on earth, we cannot implement a healthcare system that works better for everyone. And while change may be a long time coming to the American populace as a whole, the state of California appears to be testing things out by implementing their own universal system to cover the citizens of their state.
California State Assembly Bill 1810, “establishes the intent of the Legislature to provide coverage and access through a unified financing system for all Californians, to control health care and administrative costs, to ensure high-quality health care, to limit out-of-pocket costs, to train and employ an adequate health care workforce, and to ensure all Californians have timely access to medical care.”
The bill passed as a trailer bill to the 2018-19 California state budget. The bill establishes a council consisting of five members to develop a way to implement a universal healthcare system in California by the year 2021. Three members of the council will be appointed by the governor, the other two by the legislature.
Current estimates project that approximately $100 billion in new taxes will need to be raised to pay for the measure, but proponents remain confident that the plan will save money overall. Proponents also argue that a universal system will alleviate the burden on small business owners to provide employees with benefits they may not be able to afford.
California already has a strong healthcare market, with citizens in all areas of the state able to select from at least three care plans. This stands in stark contrast to many other states where there is only one provider in the market, leading to increased costs. Given this fact, the switch to a universal care system may have consequences yet unforeseen by the writers of the bill or even members of the five-member Council on Health Care Delivery Systems.
California already draws an enormous number of immigrants from other states. And, due to the lack of consistency in access to healthcare across the United States, those who find health insurance impossible to afford in their state may decide that the risk in making a move across state lines is worth it. Due to its appeal, California already has some of the highest costs of living in the nation, especially in terms of housing costs. A large influx of even more immigrants from other states could exacerbate California’s existing housing crisis.
Similar rises in housing costs have occurred in other areas, as seen when cannabis was legalized for recreational use by Colorado and Washington. Seemingly overnight, Denver became the most expensive landlocked city in the US, and housing costs in the Seattle area similarly skyrocketed. Everyone wanted to move for the opportunity, but the sudden overwhelming demand for housing drove prices out of reach for a good number of people.
Proponents of the universal plan, however, argue that increased population will only grow the tax base, and thus, lower the financial burden on individuals. They also argue that by relieving individuals and small businesses from the cost of health insurance, more money will be available in just about every family’s budget for things such as housing. In addition, proponents argue the move will spur business growth and expansion, further growing the economy.
In the end, as the trailer bill which created, at least on paper, a universal healthcare system for Californians, left much undetermined in how the plan would be implemented, the devil truly will come down to the details. It will be impossible to please everyone with the measure; however, if administered properly, the result could very well be fewer sick Californians, as well as money saved.
In addition, the success of the plan will rely upon current federal funding for things such as the Veterans Administration, so changes to state funding from the federal level may also play a determining role in the success of the plan.
We know from the example of other nations that have implemented a universal system of care that it is possible to both save on administrative overhead and provide a great level of care. Whether or not California’s venture into universal healthcare will succeed in the US remains to be seen. If it is a success, that success could then translate into a model the rest of the US can follow.
This is really interesting! I hope they end up coming up with something effective, and that it leaves the paper it’s written on and becomes a reality in time. There are so many ways it could go though…
I suspect that, to the extent people move to California for the healthcare, it won’t in fact lower the financial burden on individuals, at least in the short to medium term – since the people most likely to move will be disproportionately those in need of expensive treatments. Still, if any state can bear that burden, California is the one.Report
Forgive me if I just don’t trust CA politicians and bureaucracy to make the difficult choices necessary to run such a system. Every bleeding heart story on the news will create a demand for yet more.Report
I’m not sure the California state government is uniquely unqualified to run such a system, and many countries with dysfunctional political systems in general have pretty decent universal healthcare.
That being said, I hope they choose one that is nothing like the NHS.Report
An admittedly small sample, but everyone I’ve ever known that’s dealt with the NHS has spoken very highly of it. Do you have another take?Report
Yes, the NHS has many good qualities and some bad ones.
I just think it’s poorly suited to the way government works in the US at both the federal and state level. We don’t have a great record with the government directly administering complex, labor- and capital-intensive industries, and the closest domestic equivalent is the VA, which has a (deservedly) mixed reputation.
While, like I said, I don’t think the government of California is uniquely incompetent, it’s also the case that most countries (many with systems that are at least as good as England’s) have systems quite different from the NHS.Report
I think what @pillsy said about direct administration is on point both about quality and practicality. For one thing you’d need to convert virtually every provider to a public employee then have them report through administrative authorities that don’t have experience with overseeing care.
IMO any plan that relies on converting care providers to public sector is doomed to fail. The good news is it really isn’t necessary to get to universal coverage. There are issues with care delivery in the US but the underlying problem is how we handle payment and financing.Report
Yes, with emphasis on financing.
If something like Medicare for All is implemented at Medicare reimbursement rates, than the healthcare providers that are currently generating most of their revenues through private pay insurance contracts (pretty much all successful practices) are going to face significant cuts to their revenues, this after adjusting to the realities of the healthcare business in the post-ACA world.
The not-for-profit health systems don’t have that kind of room if they have any interest in maintaining investment grade ratings for their bonds. Independent practices will struggle with it too, especially smaller practices that can’t generate the kinds of margins the bigger players can, which could lead to further consolidation.
That doesn’t address questions about access to care or the quality of care received.Report
There’s no way you could do Parts A and Parts B for all but you might be able to find a way to wrap up Medicaid into a modified Part C for all (or just a newly designed Part E operating under risk adjustment principles) to act as an insurer of last resort, or very soft public option. All the big payors would survive that and possibly profit from it. They can still offer separate boutique plans that keep service providers making money. People with the means will (and should) always be able to buy extra.
The access issue is tougher. One of the worst things about the ACA is that it further entrenched insurance in artificially small state regulated markets. That’s why the markets with elderly populations are in a death spiral and the co-ops failed. It defeats the whole idea of risk sharing. I rarely say the feds should step in and make the market national but it seems like a very basic interstate commerce issue.
Otherwise all you can do is find ways to increase supply. I think loosening up NP oversight like a lot of states are doing is a good step. Getting more people even on crappy insurance has helped the growth of urgent care and retail facilities. Put people in a position to pay and services hopefully follow.Report
@inmd
Agreed, and I think it’s an interesting point in light of your comment about keeping private insurers in the mix in a universal healthcare coverage (that side sounds like it’s your expertise much more than mine – I’m just a dumb real estate guy).
We’ve seen a growth of urgent care operators, in some areas to the point of saturation. Given the size and space requirements, they fit well within a typical retail box. Freestanding facilities are small enough to put in any retail location, and I’m seeing health systems building their multi-specialty outpatient facilities in heavy retail locations.
My observations on that are:
1. The expansion of services are occurring in stronger demographic markets (urban/suburban) with high commercial payor mixes as opposed to Medicaid/indigent populations.
2. More of it seems to be happening in non Certificate of Need and states with literally no barriers to entry (Texas). I see more more surgery centers, inpatient rehab facilities and other higher acuity assets going up in states like Texas, OK, MO and NV.
Texas is an interesting case study for what I think is the closest thing there is for a free market in healthcare services. It may be the only state that operators privately-owned for profit freestanding emergency departments.Report
I’ve been an in-house attorney in the healthcare industry for about 9 years now. I don’t have all the answers but I like to think I’ve picked up on a few things. The dirty secret about the private insurance industry is that the government needs them as much as they need the government. There are sound theoretical reasons for killing them but I don’t think its practical or necessary and if regulated properly they can help spur increase in the supply of care providers. The retail stuff you’re seeing is a direct result of more people having a plan. States taking down barriers to entry is also helpful but it’s going to be a slow process and require parochial institutions to get more consumer focused. It’s going to be a bumpy process and there are going to be scandals involving putting business over clinical standards but it’s a path we’re going to need to walk down.
The people still on old fashioned Medicare and Medicaid tend to be the hardest to insure profitably. They’re statistically the sickest and the poorest. One of the things that needs to happen for universal coverage via mostly private insurance to work is to find a way to integrate them back into healthier member populations so that risk sharing works. Some states are experimenting with Medicaid managed care programs that take a baby step in that direction but its still in its infancy.
Right now they’re in kind of a dumping ground.
So a long road ahead but there is hope, again provided we can get policy makers to get over certain hang-ups.Report
And just to add there might be sound reasons for keeping private insurers around. Offering better plans to the rich and especially the middle and professional classes could be what it takes to keep providers in the black and keeping expensive technology and treatments widely available.Report
Yeah. It’s a double-edged sword, but there are some definite upsides to effectively having a two-tier system, especially if the lower tier remains pretty good.Report
That, and even the Canadian Supreme Court upheld the right of people to retain private health insurance even to cover procedures provided by the state system.
Chaoulli v. QuebecReport
The VA is the closest thing we have to the NHS, and they insist that members have and use private insurance unless they can’t get it for some reason. E.G. If my employer offers it, I have to take it, or I have to be on my spouses plan if they have one, I can’t just decline to have insurance just because I don’t feel like taking it or paying for it (and if I can’t afford it, I have to request a waiver and prove that I can’t reasonably afford insurance).
Thus the VA acts as insurer and provider of last resort, and morally I’m fine with that. That said, I also see how poorly run and funded the VA facilities are, and my faith that we could have something like the NHS drops to very small values.
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About 50% of my clients are in the UK and the NHS is not a system we should aspire to (at least for female reproductive issues, can’t speak to anything else). Insanely long waits even for relatively serious issues, the care you get depends on the area you live based on the decisions of the local trust, procedures/medications that should be allowed and in fact are allowed in all other countries – are (IMO) unnecessarily rationed/forbidden. The doctors seem to face few repercussions for bad care and poor advice, the patients really are subject to the whim of the doctors and are denied treatment sometimes based on personal judgements (too fat, too old, too poor, too many children, a “whinger”) and many of my clients end up simply paying out of pocket to go to a private doctor anyway. The European systems work far better and are much more patient-responsive than the NHS.Report
There are good things about the system, but they make a lot of sacrifices in the name of keeping things cheap and free at the point of delivery. The last in particular strikes me as an incredibly dubious goal, and I think (especially on the left) American advocates of health care reform are far too enamored of it, probably because our system goes completely off the rails in the other direction.Report
I wish I knew more about the evolution of the system because many things about the NHS seem broken in the way our own system is broken. Not the specific details, but this overall vibe where I wonder how much of the system is the way that it is due to people not wanting to change too much too quickly/an overall fear of drastic change, endless compromises between various interest groups, and worrying about how certain things would play in the press and with the public. No one wants the health care system to be terrible, they just evolved that way over time. The European systems seem to function better because they don’t try to maintain any illusions, they’re straight up socialized. Makes me wonder how much better a system could be devised if we just had the political will to scrap everything and start anew without trying to maintain tradition and placate everyone. But that veers off into benevolentdictatorland and all our systems would look totally different from each other’s anyway.Report
@pillsy
You are being far too generous. It’s ignorance, willful or otherwise.
Anyone that complains about healthcare being off the rails that fails to see the number of changes that healthcare providers are making in order to try to make the delivery of healthcare accessible and affordable isn’t paying attention. Therefore, as someone that has to live, eat and breathe healthcare every day as a real estate professional investing in healthcare properties and making sure that our tenants and uses are on the right side of the healthcare curve, people that think that the current system “goes completely off the rails in the other direction” simply aren’t paying attention.
The fee-for-service model with millions of people lacking access to insurance and preventative care along with the pending rise in Medicare expenditures due to the changes in the US demographic profile was much worse.
If left-leaning want to be fairly critical of the ACA, so be it. There’s a lot of room for that. Enamored with free healthcare? I don’t care to discuss policy with unicorn chasers or ideologues. I’d prefer adults handle this.Report
It has gotten better, but healthcare which is free at the point of delivery is not exactly a unicorn. The reason I brought it up is that it’s actually a major goal of a real healthcare system that works OK, but not great.
There are arguments for having it. I think they’re not great, and that having a modest amount of patient responsibility for costs is a good idea, but they’re real and people make them. I do think it’s weird (and here likely ignorant) that so many people think that “Medicare for All” will be free at the point of delivery, since, well, Medicare as it stands now isn’t.
So the NHS does other things to manage its costs, like evaluating drugs and procedures for cost-effectiveness, and having stringent standards for that (including a legally required cost-effectiveness threshold that’s really pretty low).
They do a good job keeping costs low. But there are consequences to that, too.Report
@pillsy
You need to tell me why it isn’t exactly a unicorn. I think it’s going to be a golden unicorn unless taxpayers are willing to foot a huge bill for it. I make that argument on a number of assumptions:
1. Reimbursements for universal health care are at or near Medicare type rates. Given that private pay carriers reimburse upwards of 30-40% more than Medicare, healthcare providers that have a majority of revenues from commercial insurance contracts (call it 60%) that switch to a 100% government mix will see revenues decrease unless they can make up the difference in volume.
2. Patients don’t pay co-pays or deductibles. It’s not as significant as (1) but it does move the needle.
3. Because the ACA has driven healthcare providers to eliminate inefficiencies in their own healthcare delivery models, a lot of the fat has been trimmed off so the idea of a universal healthcare program that shifts the burden to healthcare providers to aggressively cut costs will lead to access and quality issues, even if further consolidation, shift to the employed physician model and private equity capital stepping in can solve for the cost cuts. FYI, healthcare is one of the hot spots for private equity. That doesn’t even address what the impact on the bond markets and the trillion or so of outstanding municipal bonds backed by health systems.
Can I get a universal healthcare proponent to address this point-by-point? All I’ve seen in the original post and elsewhere is the Green Lantern Theory of Universal Healthcare – aka if only we had the will. Maybe mix in some cheerleading pom poms and a few backflips.
I know arguments out there exist. I also know there are real arguments that Donald Trump is a good president. It doesn’t mean I agree.Report
Yes, obviously taxpayers are going to be footing a large bill for it. That doesn’t change all that much if there’s still patient responsibility for the bills, though yes, it will be more costly, ceteris paribus.
In particular, this part is absolutely true:
There will be some decrease in revenue, but there is also room to decrease the costs of inputs (i.e., medications and devices) by adopting European/UK-style health technology assessment, eliminating much of the burden associated with adversarial paperwork, and a lot of the cost of medical malpractice insurance [1].
And it will increase volume. Even post-ACA there’s still a fairly large un- or under-covered population.
Still, it will increase taxes, but for a lot of people, it will mean less (or nothing) paid out in premiums.
This is true. And there’s really nothing at all there to discourage over-utilization, which is enough of an issue that we’d need to find other ways of rationing care (as in the UK) which I expect would be both less politically viable and have higher human costs than just retaining a (generally reduced) degree of patient responsibility.
I’m not trying to convince you that having service be free at point of delivery is a great idea—I don’t think it is myself. But it’s within the realm of realistic goals that someone might have without being a dingbat.
Sure, there’s been some improvement, and this means that there will be some diminishing returns. Then again, there are plenty of things we don’t do, or do spottily, that would stand to help, and something like a single-payer scheme would make them easier and, since they would require regulatory changes [2], having the government on the hook for them would provide more impetus to pursue them, not less.
There’s also the fact that all in all, we would probably be better off as a population if we were both screened and treated less. People who do receive care under our system actually do receive more than they need.
[1] As malpractice awards will no longer need to incorporate the costs of future treatment.
[2] Like requiring the FDA to consider having competition for a treatment as a positive.Report
It depends both on how they structure it and how the feds respond. The federal government is so enmeshed in healthcare that if they want to make it impossible they can. If all California does is reinstitute the ACA mandate at the state level and introduce a more comprehensive subsidy that doesn’t break state budgets they could make it work. Something more ambitious will IMO most likely not succeed.Report
Every bleeding heart story on the news will create a demand for yet more.
“And that’s why you’ll get nothing and like it!”Report
This is something the VA struggles with, and Vets aren’t typically a group to complain to the media until it gets really bad (like, as Andrew notes, they are killing us through neglect or incompetence).Report
I mean real universal health care systems have some political fighting over their scope and generosity—how could they not—but the idea that they inexorably grow to provide everything at any cost, in contrast to the contemporary US system, is almost the opposite of true.
People want to get health care, but people don’t want to pay unbounded amounts of taxes, and governments have tools available to them to keep costs down that don’t exist (or are much more limited) in our system.
That said, it’s harder at the state level, and harder still because they can’t (for example) make the FDA more interested in having competing drugs on the market, which is something the EMA does.Report
exactly. I think the objection that people will demand more and more is lazy.
Add: Oscar’s other complaint about politics and Big Gummint bureaucracies is valid.Report
It’s not lazy, some people always demand more of things where they aren’t seeing the cost. This is a fact of life. When you can concentrate the benefit and distribute the pain, those who benefit will want more. This is the primary driver behind rent seeking, is it not?
So how well does CA resist rent seeking in general, and within the social services sectors specifically? It isn’t going to be the sick person getting the concentrated benefit (yes, they will, but hopefully only once), it’ll be whatever organization can make bank or acquire power from getting the state to cover just one more thing.Report
It’s lazy because people demanding more is *just politics* and arguing about what counts as enough is politics too. (Eg., like denying everyone everywhere anything.) Your objection to universal HC reduces to the observation that it’s political. Which it is. Trivially.
“Hey, let’s charge cops for shooting unarmed black men.”
“No f***ing way. If we do that people will just demand more and more…”Report
Once that sweet chemotherapy is free, boy howdy, Ima be first in line to get me some, and go back for seconds!Report
This is such a disingenuous statement I keep reading it again and again trying to see if I’m missing some deeper point here. At the least it’s far too dismissive of a really complex problem. Oscar raises a legitimate concern that would absolutely have to be dealt with in any single payer medical system and it seems like you’re diminishing his opinion by making it seem like he’s trying to deny cancer patients treatment, which I find a little uncool.
Set aside the obvious bones of coverage contention like acupuncture and plastic surgery. Chemo. Who decides who gets it, even if it is free? Not everyone should get chemotherapy. Not everyone is helped by it. Someone has to decide who gets it. Thousands people are getting chemotherapy who are actually made sicker by it and would have been better off without it. https://www.newyorker.com/magazine/2010/08/02/letting-go-2
So not to put words in Oscar’s mouth but “demanding more” isn’t always or even usually people who want medical bells and whistles, it’s everyday lifesaving stuff and how to allocate that and where to draw the line. Decisions have to be made by someone about when people should have access to certain treatments and when they shouldn’t. It is entirely possible for patients to wrongfully “demand more” of things that are completely legitimate in other instances (overtesting, overmedicating), to demand them at times that are inappropriate (people whose lives are not lengthened or improved by invasive treatments) and any debate regarding socialized medicine surely has to acknowledge the reality that medical dollars, even when spent on lifesaving treatments, are at times misspent.
And who decides? I have these eyedrops that improve my quality of life and cost my insurance company a truly appaling $500 a month. It’s the same medicine that is given to organ transplant patients, it basically prevents me from rejecting my own eyeball. I won’t die without it, I won’t go blind without it, but I feel a lot better with it. Should I not be able to have my eyedrops? Should that medicine be rationed and given to organ transplant patients instead? What about people who cooked their liver with alcohol? What about people who will only live another few months even with the medicine? Why should they get the medicine and me not? I can’t help being sick, nothing I did caused it, why can’t I have the thing that makes me feel a little better and makes my life a little easier? I’m “demanding more”, aren’t I? Demanding something I don’t strictly need but that most people would agree, it’s better to feel good than to be in pain.
I personally prefer that these decisions be left up to me and my doctor and the insurer I choose to do business with, not a bean counting government bureaucrat. But that’s really not the point, the point is how much medical care is “enough” and who should decide this, is a reasonable concern for a well-intentioned person to have. And people should be able to raise that concern in a dialogue about universal health care without being made to feel like a cruel and miserly jerk about it.Report
The “demand more” argument usually envisions people greedily seeking unnecessary treatment, because it is free.
It is premised on the notion that medical care is a consumer good like wide screen tvs, and if it is free, people would rush out to get stuff they don’t need.
But medical care is entirely different, in that no one wants it, except those who really need it.
In your case, eyedrops make your vision better, they aren’t something you just decided to do out of vanity.
True, there are things like boner pills that can fairly be described as consumer items, but most proponents of socialized health care are happy to exclude them.
You ask who should ration health care- right now, your eyedrops are being rationed by insurance company bean counters on the basis of price.
I don’t know why this is preferable to being rationed by government bean counters on the basis of availability and need.Report
This is a false dichotomy.
A couple days ago, I had a plumber come out and remove a clog from my sink. It was… not especially cheap.
But it’s also not the sort of thing I’d do if I didn’t have a clogged sink. But because money had been tight for a little while, I’d put off the plumbing for a while and lived with a sink that took forever to drain.[1]
This isn’t an uncommon situation.
It’s just easier to estimate how much it will cost to fix a sink and effectively insure yourself against it, and also easier to live with an unfixed sink. Or live in a rental unit where you aren’t responsible for having your sink unclogged, for that matter.
And you can get a good estimate of how much it will cost ahead of time.
So Universal Sink Unclogging would be silly.
But the idea that “demanding more care” is a matter of greed or profligacy just doesn’t hold up.
[1] Then I just kept putting it off because I’m a huge scatterbrained procrastinator. But that’s a different story.Report
Missed everything I said about rent seeking, did you?Report
Government *IS* the possibility of corruption. Government is also necessary. So it’s not the veto point you think it is.Report
@stillwater
I’d argue that’s lazy.
Two counterpoints:
The whole purpose of insuring people with pre-existing conditions is for them to get access to affordable and preventative care instead of having these people wait until they’re were so sick that they had to go to the ER.
The entire purpose of reducing the cost of care for these people was so that they could access care. That in of itself represented an increase in demand given the ability to pay.
Second, one of the biggest criticisms of high deductible plans was the cost shift away from insurers and to consumers in the name of “saving money on premiums”. A consequence of that, especially for more costly procedures, was a problem similar to the uninsured in the pre-ACA world…holding off on medical expenditures.
The upside to this is consumers getting a lot more educated about the cost of care and forcing healthcare providers to compete with another and increase price transparency.
Take away the cost consideration and you’re going to tell me that customers are still going to seek out the best pricing even though it’s all bought and paid for by someone else? Are you also telling me that you won’t see people elect to use medical services that they were delaying due to affordability and high deductibles? Of course it’s going to happen.
I’ll meet you halfway on this – if people look at my description above and think that because of this, it’s going to cause some systemic shift that will negatively impact the delivery of care, that’s lazy thinking and likely political unless they can show their work.
That people will demand more is a given because of the framework. It’s the order of magnitude that’s up for grabs.Report
As a holder of a HDHP for the last 5 years, I can say this mostly false and totally false where it matters. I can’t find prices for nearly anything. The stuff I do find prices on, it’s dictated by my plan. The econ theory is solid, but in practice the transparency is not appearing.Report
Almost certainly better than it does in the health care sector, given that it’s in the United States.
Seriously, health care is a phantasmagoria of cartelization, government-granted monopolies and government-created barriers to entry, not to mention opaque (and often deliberately deceptive) billing practices.
Not all that stuff has to be there, and some of it should actually be gone, but the lower bound on how much deregulation people are willing to tolerate in health care is unusually high, and that means the upper bound on how much it can help is unusually low.
Other developed nations, even ones that have the most market-oriented approaches and the highest degree of patient responsibility for paying health care costs, have much more intervention in how care is paid for and how rates are set.
And really about a third of me thinks we should go that route. There are good arguments for such systems, existing ones tend to deliver very good care by paying a premium for it[1], and unlike an NHS-style approach, I think they might fit our approach to government and politics pretty well.
[1] Which is something the US would like to do, if you get my meaning.Report
Seriously, health care is a phantasmagoria of cartelization, government-granted monopolies and government-created barriers to entry, not to mention opaque (and often deliberately deceptive) billing practices.
Among other things!
Really, the idea that universal HC will *create* an incentive for Big Medical to capture legislators and regulators is seriously confused*.
* or is batshit crazy the better term? I dunno. I got caught between civility and accuracy and went for moderator satisfaction.Report
@pillsy
To be fair, the comment I made about adults needing to figure out this problem is not limited to one side of the political aisle.
Ask free market advocates about the freestanding emergency room business. Sure, they were a market response for the need of low-cost emergency services but let’s not forget that there are profit-motivated people with a business model where profit and proper care are in conflict with one another.
Coincidentally, it’s the private pay insurers that seemed to catch on to this first and are starting to crack down. I’d have to find the link but this is a pretty recent thing.Report
Yeah my issue is less that I think we must do healthcare in a specific way, and more that a lot of things that people insist can’t possibly work do work, and it’s largely a matter of trade-offs and picking solutions aligned with your goals.
People around here rarely argue that systems can’t possibly deliver good universal care if they have some patient responsibility for costs; if more of them did I’d probably spend more time pointing to all the systems that do just that.Report
California had one of the most successful ACA program roll-outs. We are not the super-dysfunctional state everyone else makes us out to be. California’s status as a really large economy also makes it more likely here than say Vermont.Report
To me this is the primary advantage, along with having the right demographics.Report
I hope it becomes real, but the barriers to doing this on a state level are huge. I know one issue CA is grappling with is related to health care for veterans, as this plan would give a fairly expensive-to-cover group free care but conflict with the VA system. The numbers on that alone are huge.Report
That’s how Canada got universal healthcare – it was impossible, then Saskatchewan implemented it for just the one province, at which point it was doomed to fail, etc. The rest of the country watched Saskatchewan fail to implode for a while, and before you knew it (about 4 years later) the federal government introduced a program to basically replicate what Saskatchewan did in the other provinces.
Kind of the like how legal marijuana was totally unthinkably impossible because international treaties and who knows what else, and suddenly in under two months I’ll be able to walk into a legal marijuana shop and the most controversial thing about it seems to be whether individual municipalities are going to allow smoking cannabis on sidewalks.Report
Why would you buy weed when it should be covered under the new California universal health care system?Report
We are intrigued by your proposal and would like to subscribe to your newsletter.Report
I’m in Canada. We’ve had legal medical MJ for some years now. Some percentage of “medical” users are presumably abusing prescriptions to get access to hassle free MJ of consistent quality and known provenance, as are presumably some percentage of people with opioid and adderall prescriptions. It’s not free though – prescription drugs are one of the big gaps in Canada’s Medicare system.
My own consumption is so little it wouldn’t be worthwhile getting a prescription, and besides I don’t like the idea of undermining the perceived legitimacy of the medical system.
On Oct 17, recreational MJ will be legal throughout Canada, so my next purchase will be at a legal pot shop.Report
Wasn’t that in the early 60’s? The US could have done that too back then.
If memory serves we came close to doing so at about that time but Ted Kennedy prevented it from passing because he thought we could/should do better.
Putting in a significantly more expensive program when the original is 1% of the budget is very different than when it’s the bulk of the budget.Report
Early to mid 60s, yeah.Report
Going to try to post a graph here of how much costs have gone up. My eyeball suggests about 25.
https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjVveHP6pndAhUOWq0KHXI5DAcQjRx6BAgBEAU&url=http%3A%2F%2Fcpiinflationcalculator.com%2F2015%2F06%2F01%2Fwill-rising-medical-costs-sink-the-recovery%2F&psig=AOvVaw2OYmbhviYYNQMOQTgOGs3_&ust=1535892241525568Report
Conservatives, 1964: “Medicare is socialism and can’t work!”
Conservatives, 2018: “Yeah, we coulda implemented socialized health care back then, but not now, it can’t work!”
Conservatives, 2068: Yeah, we coulda implemented socialized health care back in ’18, but not now, it can’t work!”Report
California is a single party state. If Blue Politicians flinch from the cost in a solid Blue state, maybe the core issue is budget and not the Conservatives.Report
The majority of Republicans in the House voted for Medicare in 1965, 70 to 68. 48 Democrats also voted against it.Report
The history of these attempts suggest the budget will explode and the politicians, even in California, will flinch from paying for it and dismantle it before (their) jobs are threatened.
After that happens, MAYBE (but probably not) the lesson we learn is UHC expands access but is very expensive. I say probably not because that would force UHC’s proponents to discuss painful ways to control costs (which means no, everyone doesn’t win) and it’s much easier to pretend the candy is free. Instead we’ll see the “if administered properly” fall back to explain why it didn’t work.
But hey, I’d be thrilled for California to prove me wrong and make this work.Report
The candy is never free and it frustrates me when proponents whose end goals I typically agree with talk about ‘free’ healthcare or healthcare as a right. Its a fundamentally wrong and stupid way to look at the issue. Of course so is pretending that the existing or pre-ACA system are anything like a free market or that dismantling existing programs would in itself be an improvement.Report
The benefits are specific and the costs are diffuse.
When the benefits also happen to be matters of life and death, it’s real easy to turn it into a moral question.Report
Anthropogenic Global Warming. Benefits are specific, costs are diffuse, and policy is morally compelling precisely because its life threatening.
“Let’s do nothing…”Report
The problem with turning it into a moral question is that those tend to require moral answers.
If it’s an engineering question, you can come up with engineering answers.
(Engineering answers tend to be amoral, though. I mean, for AGW, you might conclude that nuclear power would be a good way to reduce fossil fuel use. Fan of pebble bed reactors, myself.)Report
If it’s an engineering question, you can come up with engineering answers.
This is nuts. You don’t believe it even as you’re saying it. Eugenics is an engineering answer to an engineering question, right?Report
I thought we were talking about provision of health care and Global Climate Change.
But, sure. What is Eugenics being suggested as an engineering solution for?
I mean, if we want to discuss more birth control in the 3rd world to help address both of the above issues, I’d be down.Report
Jaybird, I refuse to believe that you’re so dense as to not follow the reasoning of *your own argument*. But you continue to amaze me in creative ways.Report
While I’m a huge fan of pointing out that someone’s position, when taking to its logical conclusion, leads to Hitler, Stalin, or Rand, I can’t help but notice that that, too, is a moral argument rather than an engineering one.
And I’d rather discuss the engineering problem than the moral one.
I’d certainly rather discuss collective action problems than whether people who want to discuss collective action are in a circle that has significant overlap with the Nazis on the Venn Diagram.Report
No, your position is absurd right from the start. Tail ends have nothing to do with it. I mean, unless you’re OK with eugenics, which you aren’t. So….
Do more thinking and less reacting. None of us is perfect, Jaybird. 🙂Report
A) stop being an ass.
2) WTF are you on about? HC and GW are two different classes of problem; moral and technical. Pretending that they are the other is confusing the issue in remarkably unhelpful ways.Report
“stop being an ass”
Seriously? If the argument is to eliminate morality from political discussions and view them as engineering problems, then the discussion of eugenics *just becomes* an engineering issue.
Christ, I can’t believe you folks can’t see this. I’m literally shocked.* Especially from you Oscar.
I mean, Dark and Jaybird, I perfectly understand….
*I’m not fucking kidding. You guys are blowing my fucking mind right now.Report
Then we’re having a disconnect.
You think that we’re, obviously!, saying something that we, for some dumb-assed reason, can’t see that we’re saying.
Perhaps you should treat this disconnect in our communications like an engineering problem rather than a moral one?Report
Well, we’re back to my question that I asked a couple of comments ago:
What is Eugenics being suggested as an engineering solution for?
For my part, I wanted to discuss the engineering solutions to health care provision. Not how it’s true that eugenics would work really well and that’s why we have to block off all discussion of it by placing it behind the Wall Of Things That, Morally, We Cannot Discuss.
(For what it’s worth, I don’t think that we’d be able to put together a policy that would result in Eugenics working. As such, on a purely engineering level, we should avoid it.)Report
No, we’re not back to anything other than that you expressed a silly claim which you don’t believe. Why you expressed it is something you – not me – need to reflect on more seriously.Report
I’m pretty much under the impression that I do believe it.
Here, let me say it again:
I’m in a place where I don’t see that as silly. I’m in a place where I see it as damn-near-trivially true.Report
What is the “engineering question” that you’re trying to solve here?
Edit: If it’s “how do we get rid of class/race ‘X’, then your problem is the unethical nature of the question, not the answer”.Report
Doesn’t matter Dark. No matter how you look at it, eugenics is an engineering answer to an engineering question.Report
You’ve been repeatedly asked what the “engineering problem” is, and you’ve repeatedly avoided giving an answer.
Not having a defined problem is the opposite of “engineering”.Report
The problem set is “how to create more people like X”.
I mean, that’s pretty much the operational definition of eugenics, right?Report
“How do we make more doctors?”
“Eugenics!”Report
Think of all the other sectors who’ll benefit from eugenics as well. You’re being very shortsighted here.Report
Well, my original intention was to talk about the engineering problem involved with health care provision so… yeah. I guess I walked into this conversation with blinders on.Report
Fair enough (I really would like that I could trust you on that but I don’t…) but the premise of your argument was to divorce healthcare from morality and treat it like a straight up dam or highway building project. Well, if someone wants to build a highway to “better humans”, then Let’s Go Baby!!!
Add: I mean, something a bit more than fair enough. I appreciate your engaging in a dialogue. FWTW.Report
the premise of your argument was to divorce healthcare from morality and treat it like a straight up dam or highway building project.
Yeah.
Well, if someone wants to build a highway to “better humans”, then Let’s Go Baby!!!
I don’t see how that necessarily follows.
Like, let’s say that I wanted to build a highway. “What kind of materials do we need? What kind of budget do we have? What kind of workers are available?”
To respond to that by saying “hey, if you’re not dealing with the moral issues, you might as well be providing cover for Nazis!”, I find myself wondering “what the hell?”
Now, if you want to say that there are some things that are just too important to discuss dispassionately… well. Okay. I guess. Sure. Whatever.
I don’t see how the improvement of health care logistics is one of those topics. If this is just one of those things where we have to open the proverbial meeting with a proverbial prayer before we discuss the nuts and bolts, well… I’d like to think that we wouldn’t have to do that.Report
Now, if you want to say that there are some things that are just too important to discuss dispassionately… well. Okay. I guess. Sure. Whatever.
I don’t see how the improvement of health care logistics is one of those topics.
I’m trying to love ya bro, but did you really just write the above two grafs?Report
This is one of those things where I’m confused again and suspect that you’re reading what I’m (obviously!) implying rather than the things that I write down that strike me as being trivially true.Report
Hmmm. The thing you said, and I quoted the relevant passages up there, is that healthcare is one of those topics which people can dispassionately talk about. My response, oblique of course (because I continue to give you credit for being a human being and understanding implication), is that *life and health* ARE things passionately cared about.
Personally, I can’t find the conceptual space where folks (in general!) wouldn’t passionately care about their own personal life and health and the life and health of others close to them.Report
I don’t want the person operating on me to be a nervous wreck because s/he just *CARES* so much about people and s/he *KNOWS* that I have so *MANY* people who *LOVE* me.
I want him to be a cold fish of a man. Or woman. Whatever. I want him to be able to have an idle conversation about the recent golf tournament he played in. Or she. Whatever.
The people in charge of training him to operate on people? I want them to be dispassionate too. Or her. Whatever.Report
I don’t want the person operating on me to be a nervous wreck because s/he just *CARES* so much about people and s/he *KNOWS* that I have so *MANY* people who *LOVE* me.
Good lord man, they all *ALREADY* know that and that’s an integral part of what motivates them. The best ones anyway. And most of the rest. They’re human beings. They understand, without explanation and exception, that your life matters to other people.
What do you think should be the motivation? Reputation in the ER? Monetary profit? Fear of litigation?
Christ I feel like I’m talking to an alien. Or a libertarian…Report
They understand, without explanation and exception, that your life matters to other people.
I’m glad the theoretical people get the benefit of the doubt on this.
More should get it, I think.Report
Oh, OBs (eg) still opt for cesareans more than warranted by medical necessity but that’s not because they’re nervous wrecks about loved ones…..Report
I remember a study recently which concluded the number one trait of a really good surgeon was arrogance.Report
Objection. Nonresponsive.Report
This is one of those things where I’m confused again and suspect that you’re reading what I’m (obviously!) implying rather than the things that I write down that strike me as being trivially true.
Then maybe you should *write your own thoughts better*!!
The wonderful thing about writing is it makes our thoughts public, no longer private, and subject to not only interrogation by our interlocutors but our ownselves. “Did I really mean to say that? I guess I did. Huh.”Report
The problem is the engineering solution is going to draw lines and put some people’s medical problems on the other side of those lines.
It’s immoral not to cover condition [X] for everyone!
HC is a Right!
The moment we decide we can’t cover knee replacements for senile bedridden 90 year olds with cancer, we’re making serious moral choices that value one person’s life over anothers.Report
The moment we decide we can’t cover knee replacements for senile bedridden 90 year olds with cancer, we’re making serious moral choices that value one person’s life over anothers.
So, obvs, its better to have a system where insurance companies can unilaterally deny those people coverage. To
maximize profitkeep premiums low.Still remarkable to me that you defend our health care system….Report
There’s a difference between thinking what we have is good and thinking the proposed alternative isn’t workable.
I don’t think anything along this line of “reform” can be successful until it figures out how to reduce costs. All these moral arguments keep getting trumped by “not enough money”, and that’s going to keep happening until “how does it become cheaper” is the most important thing. Typically this issue is handwaved.
“Administration Costs” is a fine answer… if that means “throw millions of bureaucrats and insurance people out of work”… but I find it a lot easier to think impersonal and heartless market forces can do this than politicians.
When I look at our current system, I think the problem isn’t that we have too much market and not enough government, just the opposite.Report
Right. The most expensive, least producing health care system in the world is the best we can do as Americans. Got it! Garbage in, garbage out, bro.Report
Throwing bricks at the current system does not make it believable that our politicians will have the spine to throw millions of non-value-added HC workers (to the tune of multiple points of the GDP) out of work.
I think that plan is up there with recruiting thousands of people who can walk on water and heal with a touch to simply cure everyone for no cost.
If the plan requires politicians who can walk on water, then it’s a bad plan… even if we can certainly do better than we currently are.Report
This level of cynicism is why we not only have Trump, but why things will get a whole lot worse before they get better, for everyone, including the anti-establishment Trump supporters driving this bullshit.Report
It has been my experience that facts are stubborn things.
However I don’t live in California, maybe your politicians are much braver, wiser, and less captured by special interests than mine.
I wasn’t kidding when I said I’d love to be proven wrong, for CA to make it work.Report
My concern with CA is less with cost of actual care (although that is a concern), it’s that I look at the CA High Speed Rail and fear that we will be looking at another example of that.
How many veto points can people leverage against the system as it’s being conceived of or rolled out? And if it survives the roll out, how many appeal options does a person have should the state decide to decline payment for services?
CA seems very fond of giving the people all manner of veto and appeal options, seemingly to it’s detriment.
But maybe I’m wrong, and @burt-likko will come by and tell me I have nothing to worry about…
Report
Eugenics: the science of improving a human population by controlled breeding to increase the occurrence of desirable heritable characteristics. Developed largely by Francis Galton as a method of improving the human race, it fell into disfavor only after the perversion of its doctrines by the Nazis. (google’s dictionary).
It’s history, i.e. forced sterilization and/or the holocaust is more of a “how do we eliminate people of type X”.Report
So, are you arguing that the reason eugenics should be opposed *on moral grounds* is because it was advocated by the Nazis?
Really? After all I’ve written….. ??
Dark, this is weak, weak stuff. Dissapointed…Report
Having an answer without a question was the plot to a pretty funny book way back when.
Then, like now, they spent a lot of time and effort trying to find out what the question was.Report
No, it really isn’t, unless the engineering question is, “How can we waste a lot of money, time, and effort while pointlessly dicking over people who are poor, disabled, or members of racial minorities.”Report
Engineering questions, per Jaybird, are devoid of moral terms and motivations, Pillsy.
You’re not objecting to me, but Jaybird.Report
@stillwater
I can’t speak for @jaybird and I have no idea how the eugenics thing came into play but I think you’re creating a conflict where there isn’t one. It would be immoral IMO for a society as wealthy as ours to allow people to starve. That doesn’t make every question about food distribution/subsidization a moral one or require every analysis of how food markets work to be cast in stark moral terms.
Now I happen to think that the way our current system distributes and pays for healthcare to be immoral in some important ways. In that sense my position is ideological because it’s premised on the belief that in a country as wealthy as ours people shouldn’t go bankrupt or be denied basic care due to the vagaries of the job market and outdated government programs designed around how the economy worked 60 years ago. There are people who disagree with that for ideological reasons, but IMO they’ve already lost even if they don’t admit it. The failure to repeal the ACA is the most recent evidence.
What I’m not prepared to do is say every model that falls short in some way of what I’d do if I had free reign is immoral (even if I think somemight be). It’s an extremely complicated problem and no one quite knows how a proposal is going to work out until we try it. The whole ‘it’s a right’ rhetorical approach makes the perfect the enemy of the good.Report
but I think you’re creating a conflict where there isn’t one.
I’m really losing patience with this objection, to be honest, but to recall the origins of the discussion… it was *Jaybird* who said that health care wasn’t a moral problem, it was an engineering problem, and engineering problems call for engineering solutions.
Here’s the relevant quotations:
The problem with turning it into a moral question is that those tend to require moral answers.
When the benefits also happen to be matters of life and death, it’s real easy to turn it into a moral question.
…
If it’s an engineering question, you can come up with engineering answers.
Well, it’s not an enginereeing question since it’s a matter of life and death and those are, I think by anyones conception, moral issues.
The reason eugenics arises is as a *counterexample* to Jaybird’s basic claim: that these issues devolve to engineering problems devoid of morality. If that’s the case then lets ….
I’m genuinely puzzled why this isn’t readily apparent to people.Report
Jesus. Is this something where I should have said “treat it like an engineering problem” and thus not have left it open for the interpretation that I was talking about the ding an sich of health care logistics as containing no moral content, ever, and anybody who thought that it did was making a mistake?
Please pretend that I said “we should treat it like an engineering problem”.Report
If you thought moral content was implied in your comment why did you make an explicit reference to *excluding * moral content from the discussion?
Are you fucking confused about your own beliefs?Report
Because, like the surgeons that we were talking about earlier, I thought it best that we take it for granted that everybody understands, without explanation and exception, that people’s lives have worth and health care can extend lives and this isn’t about how many signals we make about how much we care about morality before we sit down and talk about logistics.
You know, treat it like an engineering question rather than a moral one.Report
“Oh, when I said that objectionable thingy I meant “according to this baseline”. Sah-reee!!”
yeah but no. Either you need to get clearer on what you think before you spew this stuff or you need to rethink your reflexive, knee-jerk opposition to “liberal” views.
JB, I think you’re a wonderful guy who climbs at the gym and runs 5ks and treats his family members admirably well all that, but really, you’re a f***er of an anti-liberal ideologue for no reason that withstands any intellectual scrutiny. 🙂Report
To help us avoid this in the future, if I say something like:
Please assume that I’m not making statements about whether it’s possible for someone to see health care as an important moral issue, but that I’m talking about wanting to jump straight to pragmatic stuff like the logistics of health care provision without spending 10 minutes talking about how much I deeply care about things first.
Instead of assuming that I must not have considered stuff related to the Nazi party, try assuming that I’m primarily thinking about this as a problem that, pragmatically, would be alleviated best by treating it like an engineering problem (and in alleviating it, addressing the moral problem).
(But I realize as I type this that I’m treating our misunderstanding like an engineering problem when it’s probably a moral one.)Report
Please assume that I’m not making statements about
Can’t be done. You’re the holder of the Liberal Decoder Ring and all that jazz which means you can’t come back without something more than an a “please, don’t think I’m …. ” You did, you do, and nothing you’ve said indicates that you won’t always will.
To your last graph, no, it’s not an engineering problem. It’s a problem of intellectual honesty.Report
What’s the liberal decoder ring again? Is that where someone tries to explain what they mean and the holder of the ring yells “you don’t mean that! You mean something else! SOMETHING MUCH WORSE!!!”?
If so, I’m not the guy wearing it.Report
Because, like the surgeons that we were talking about earlier,
Do you mean the surgeons that *I* was talking about earlier?
This is another thing that drives me nuts about our hot-take culture: using a person’s examples against them. Come up with your own damn examples…Report
Eugenics wasn’t an engineering solution, it was an obvious social solution for Germany’s health needs under its socialist health-care system. The trend actually predated the Nazis. The Weimar Republic moved doctors from being a representative of a patient to a representative of the state, focusing more on disease prevention and public health, with quite successful results.
Since the state was paying for health care, for the benefit of the state, they started applying scientific cost-benefit analysis to outcomes, as opposed to doctors billing the heck out of rich patients. For that, you still needed a good Jewish doctor, and people’s preference for those really irritated good pure Germanic doctors, who became the major backers of the Nazi party. But the Nazi party was implementing health reforms suggested by the Weimar Republic, such as favoring strong healthy people who could work and not wasting public resources on patients who provided little benefit to the public at large.Report
I see what you mean. I readily concede the moral dimension. But I do prefer the dispassionate approach for attacking the problem for reasons I said above and bellow to Pillsy re:healthcare as a right.Report
{{apart from that, on the substance of the issue, I agree. 🙂 }}Report
Gov involvement is so omni-present that we’re deep into gov run(?) HC and regulatory capture. What we have is NOTHING close to or similar to a market.
Let’s take what we have now and make it universal is crazy if we’re expecting it to reduce costs, and that part of the problem tends to be answered by pointing to other countries (a total non-answer).Report
Well, yes, but it’s also very rare to see that proposed as an answer.
Usually it’s more like, “What other countries have systems that are close to ours but which work better? What do they do differently?”
While there are a lot of answers, and a lot of factors that contribute, the big one is, IMO, a centralized authority that sets reimbursement rates. In most situations this would be crazy, but the things that make it crazy are mostly things that aren’t present to begin with in the market.Report
You’ve lost me. What are the crazy things which mostly aren’t there?Report
The lack of transparency around prices is the most obvious.Report
Adding to that, no in-network provider is allowed to ask the amount of another in-network provider’s remuneration. The entire “in network” system, which is designed as providing lower prices for insureds and therefore lower premiums, doesn’t allow “price” transparency, even at the level of providers. So it’s fundamentally anti-market at the price-point, though “argued” as market-based at the premium price. Go figure. (It will take a lot of figuring…)Report
In my (very limited) experience primary care providers have ZERO leverage in negotiating what are called, by the insurance providers, “negotiated rates”. No negotiation happens at all. Take it or leave it.Report
From my experience, even insurance companies suck at setting rates.
My favorite example is a surgery my wife had about five years ago. I hadn’t met my (quite high) deductible, so I just offered to pay cash up front. I was quoted 3k by the surgeon, which covered the surgery, the recovery, and any number of required biopsies. That was their “walk in with no insurance” cost.
So we paid 3k, had the surgery, and they promptly billed my insurance for twenty one thousand dollars. Which my insurance “negotiated” down to 14,000 dollars, noted the surgery was “out of network” (even though the surgeon was in network, and her doctor’s office was in network, just not the surgery center literally attached to her office) and told me I owed that.(Because my out of network deductible was higher than 14k).
I panicked. I wasn’t prepared for a 14,000 dollar bill, you know?
Only to be told by the surgeon’s billing center “No, your 3k covered it.” When I asked about the slight discrepancy in what was actually paid to them and what they billed, they just noted that “Sometimes they’ll pay”.
So to sum up: The surgeon was quite happy with 3k. My insurance company, apparently, would have paid 14k for it had I met my deductible. (But, I gathered later, no more than about 3500 if they’d been in network).
That’s messed up. The surgeon billed 7 times her cash rate, the insurance would have paid almost 5 times her cash rate, and everyone but me seemed to find this unremarkable.
The other story I have is about my doctor prescribing a drug that I found out costs 400 dollars a month (and was not covered under my insurance). Given the drug was literally nothing more than Alleve and Prilosec in the same pill (at OTC dosages, effectively), my doctor was shocked to find out the price, and just told me how much of the OTC stuff to take and when.
The OTC costs for that dosage was 40 bucks a month, name brand. So 1/10th the cost. And I can assure the the R&D costs, and the FDA costs, associated with smashing two OTC drugs together (with decades of known effects, including what happens when they’re taken together) did not justify charging 10 times as much per pill.Report
I’ve told this story before, but… I had a friend who worked in the business office at a hospital. He told me that if I were ever stuck with a hospital bill sans insurance, I should go to the hospital and speak to the business office manager. Offer them 25% of the bill in cash or certified check. He said they will almost always take it and mark your bill paid-in-full, because 25% is all that a collection agency will pay them for the debt.Report
Hell, I got a 10% discount on a procedure — again, hadn’t met my deductible — because I offered to pay up front.
So no running me down, and if I went over my deductible they’d just refund me anything over.Report
You’re looking at the difference between “medical costs” and “our bureaucracy is at war with another bureaucracy”.
There are vast numbers of highly paid foot soldiers who in another life would be doing math. All of those people could simply be fired because they don’t add value to the system, and when we compare our system’s expenses to others and thinking our costs will match theirs, we’re implicitly claiming they should/will be fired.Report
Yes. That’s what would be required in any scheme to reduce costs no matter what the overall design is. I think we should all agree that we’ll all be better off when we eventually figure out how to eliminate those jobs.Report
That. That exactly… and it’s very hard for me to picture our politicians even trying to destroy jobs on that scale, the political pushback would be crazy intense. The scale of this misallocation of resources is nuts. Multiple percentage points of the GDP.
Politicians can NOT simply say they’re going to lay off 2% of the GDP worth of jobs. The best they could do is set up a situation where the market does that. Command and control won’t do it because then people losing jobs could just vote against the guy firing them.Report
How do you reconcile the belief that politicians won’t put a bunch of bureaucrats out of work by altering billing with the belief that they’ll easily be able to put everybody in R&D out of work by negotiating prices? In both cases, the variable they’re pushing on is not “people working doing X” but rather something that affects the profitability of having people doing X, and the job losses are simply a long-run response to those pressures.
If somebody wrote a python script that generated nonsensical price schedules, printed incomprehensible invoices, and gave people the runaround on the phone and it started putting insurance company employees out of work, we’d all see it as “innovation through automation” and be fine with the those jobs drying up over a few years as the people working them found something else to do. Anything we do that makes it less profitable to waste resources in those ways should be looked at similarly.
I don’t think anybody is proposing a bill that just says, “Everybody who pushes paperwork for insurance is now fired. You’re welcome.”Report
It’s similar to how I can think we could have had UHC if we’d done it back in the 50’s when it was smaller.
Only 9-10% of the HC system is drugs, only 20% of that ends up back in R&D, so it’s a lot smaller in terms of scale (It’s 2% of the HC system instead of more than 50%). Better yet it’s money politicians can point to going into consumers pockets. Paying high drug prices is deeply unpopular, and you can totally destroy R&D without sacrificing any existing drugs.
Agreed… but your example implies no one would miss these jobs, including the organizations for which they work. From the point of view of the hospital, the hospital paper shufflers are ABSOLUTELY needed and make the hospital profitable by cost-coding HC to insurers so that the hospital maximizes it’s return.
So I’ll keep expecting no significant cost savings but instead costs will explode.
Econ 101 will dictate what happens yet again.Report
Well, yes, but it’s also very rare to see that proposed as an answer.
Usually it’s more like, “What other countries have systems that are close to ours but which work better? What do they do differently?”
While there are a lot of answers, and a lot of factors that contribute, the big one is, IMO, a centralized authority that sets reimbursement rates. In most situations this would be crazy, but the things that make it crazy are mostly things that aren’t present to begin with in the healthcare market.Report
I think your framing is inaccurate. Government involvement in healthcare is considerable but very little of it outside of the military/VA is government run in the sense that state employees are performing services or overseeing delivery. Most of that is done in the private and NPO sectors and it will remain so in any viable system for the USA.
Cost reduction is a tougher topic. To even discuss it you need to decide whose costs you want to reduce and for that matter what costs. Is it consumer costs? Government costs? Cost of delivery or cost of insurance premiums? I think its unlikely expansion of something like insurance coverage through an ACA model will reduce costs to the government but you can probably get a lot more people covered and save consumers money. There are also models out there like ACOs different entities are experimenting with that might have some success in reducing government costs but it remains to be seen.
This is why though it’s important that we continue experimenting with policy. The pre-ACA model had outlived viability by almost 20 years. The ACA also has major flaws which is why we need to keep tweaking and experimenting. Better policy is possible if policy makers can drop their ideological baggage.Report
Only true if we’re expecting the gov to mandate things. What should be happening is the gov corrects the current failures it’s allowed and (re)creates markets. In other words…
Force all HC providers to publish prices (and probably some other data such as infection rates and success rates).
That allows market solutions to be possible, considering how many people would like HC to be cheaper, I’d think it might be the only thing we need the gov to do (although I’d like mandated standards for electronic records as well).Report
@dark-matter
https://go.beckershospitalreview.com/the-case-for-price-transparency-why-it-pays-to-empower-patient-choice
This has been long underway since the ACA went into effect. Not only is there more price transparency than there ever has been, which improves competition and a functioning market but the shift from inpatient to outpatient care has forced the health systems to change the way they think about healthcare delivery and are now actively competing heavily for market share.
Ten years ago, you didn’t see a competing health system open a multi-specialty outpatient center in the backyard of a competing system in order to chase market share and increase patient referrals to inpatient and other facilities. Today, it’s the nature of the course.
There’s the whole healthcare following a model that has more in common with traditional bricks and mortar retail than the more institutional on-campus healthcare delivery model in years past.Report
@dark-matter
You are so wrong on this point that I don’t even know where to begin to pick apart at this other than to say your free market ideology doesn’t help you at all in this conversation, which seems to be a problem among the more ideological libertarians that don’t understand real world markets.Report
I had surgery a few years ago, scheduled things well in advance. My doctor could NOT tell me what I’d pay, he didn’t have a clue. At that point the basic concept of a market fails.
Can you name any market where everyone involved in the nuts and bolts of the transaction is ignorant of the prices? Not only what other people are paying (which is also a problem) but what they’re going to pay?Report
I agree to an extent about healthcare being “free”, but there are definitely upsides to approaching it as a right. Does it leave some important questions unanswered?
Well, sure, but so does anything that’s framed as a right.
[1] “Free at point of delivery” is a plausible goal, but as I said elsethread, a pretty bad one.Report
I don’t want to get overly philosophical but part of my objection to it as a ‘right’ is my general skepticism about positive. I think negative rights make sense and are consistent with our politics and history while characterizing a service as a right, no matter how important that service is, puts other rights at risk. No matter what we do with healthcare there are going to be hard economic decisions that have to be made. I’d hate to see our already besieged civil liberties get caught up in those kinds of analysis by proxy as they inevitably would in our system.
More practically though I don’t see talking about it as a right being helpful. Its a major public policy problem implicating something like a sixth of the national economy plus the biggest chunk of the federal budget. It requires compromise and path dependency means improvement will be incremental, not comprehensive. Deciding its a right is the best way I can think of to make people even less flexible when adaptability is what we need most.Report
I really want to focus on the second point, about it being helpful, partly to avoid getting into philosophy, but also because if it’s not helpful, well, there’s no need to consider it further.
But I do think having healthcare as a right, or more accurately a set of rights defined by statute [1], is at least potentially helpful.
A universal healthcare system, even one that’s more market-oriented and focuses more on provider competition and patience choice [2], is going to require a good deal more involvement from the bean-counting government bureaucrats that might deny @atomickristin her eye-drops.[3]
What if that bureaucrat says, “No.” Should Kristin have the right to appeal, and how should the appeal be carried out? Should she have the right to buy the drug out of pocket at the same rate the government would reimburse it? Should she have the right to at least see the basis for the government’s refusal to cover the treatment?
This is, I think, especially important given that the system will be administered, by necessity, by the Executive Branch, and that the Executive will, again by necessity, need to have considerable latitude to make decisions about care. It wouldn’t work to require Congress to pass a bill every time a new anti-depressant comes on the market to say it should be reimbursed, and how much.
But sometimes the Executive Branch kind of sucks, and we have a problem with the Executive Branch probably having more power than it should already, and one major party that will try to deliberately sabotage a major welfare state program whenever it takes control of the Executive Branch. Healthcare rights are a way to give patients more leverage in such a situation, and allow Congress to restrain the Executive Branch in a number of important ways.
[1] Making it a Constitutional right seems like , a completely terrible idea.
[2] Which are reasonable goals, and systems that focus on providing them have a lot to recommend them.
[3] This seems like a perfect example of the sort of treatment that is likely to cause conflict, being expensive, providing a real quality of life benefit, but not being a matter of life or death.Report
Things like “rights to access and information” are perfectly fine. A requirement, even. Rights to appeal are also fine (to a point).
It’s the more abstract “healthcare is a right” that can get us in trouble, since phrased like that, it has no limits.Report
It’s the more abstract “healthcare is a right” that can get us in trouble, since phrased like that, it has no limits.
But how much of an issue is that really? Opponents of UHC (MFA, single-payer, whatever) all love to cite the econ 101 theory that at a price of $0 the demand will be infinite. But you and I have both enjoyed the benefits of zero cost healthcare courtesy of the USN. Did you consume gobs and gobs of unnecessary healthcare care? Yeah, me neither. My last station was an office gig and I witnessed the fairly common occurrence for the Commander to have to order a sailor, on pain of punishment, to go to the dentist or infirmary.
Medical care isn’t just another consumer good. Apart from hypochondriacs (which itself is a medical condition), no one really wants to consume medical care. No one actually wants to be poked and prodded, discuss sometimes embarrassing situations, have their bodily integrity violated with scalpels, to have pieceparts removed or sewn back on, to consume medications with sometimes nasty side effects. It’s just not a desire thing; it’s a need thing.
I mean… how many heart transplants is Jeff Bezos on now? Zero, you say? That’s irrational, he’s worth like $150B. A million $ hospital bill is a trifle to him, effectively free, like you or I dropping a penny in a gumball machine.
So when people complain about the prospect of demand for medical services increasing under UHC what they’re actually complaining about is the prospect of people who currently need care but can’t afford it suddenly being able to access that care. It’s really NOT like Oprah giving away free cars or something.Report
Agreed that the hypochondriacs are a non-issue with regard to cost.
It isn’t people showing up at the doctors office like Arthur Denton visiting Orin Scrivello. It’s anxious parents bringing their kids in for every sniffle, demanding a battery of tests, and then insisting on antibiotics for a cold, or antivirals, or whatever other meds or tests or therapy they think the kids need. And it’s people near the end of their life, who consume fantastic amounts of medical time and resources just to hang on a bit longer, or whose family just won’t let them go.
I mean, I shudder to think of how much medical resources my father consumed just so he could be basically confined to his house for the last 5 years of his life, hooked up to oxygen and various other machines such that he couldn’t even go to the grocery store half a mile from his home. And his case was pretty mild compared to some, since he just stayed home and paid for supplies (meds and equipment) for the most part.
Sometimes, it’s worth it to pull out all the stops and try and save a life. And sometimes, you need the dreaded ‘Death Panels’ to make the hard decisions that loved ones can’t or won’t make, and the person failed to make with an advanced directive. And the political class seems to have no interest in wrestling with the actual moral question that must be wrestled with if we are going to decide that we need to try and care for everyone.
When do we draw the line and tell a person, “The state will make you as comfortable as it can, but it will no longer expend resources to keep you alive”?Report
It’s anxious parents bringing their kids in for every sniffle, demanding a battery of tests, and then insisting on antibiotics for a cold, or antivirals, or whatever other meds or tests or therapy they think the kids need.
Umm… So this doesn’t already occur in our (non-)system? Casting back again to my Navy days and that free-at-the-point-of-care system, I can recall sitting for a good while in a waiting room at a clinic to see a doc with a sick kid. The triage system is itself something of a deterrent to overuse.
And it’s people near the end of their life, who consume fantastic amounts of medical time and resources just to hang on a bit longer, or whose family just won’t let them go.
Agreed. And those folks are mostly on UHC for old folks, otherwise known as Medicare, now. How does Medicare handle it?
I guess my point here is that your concerns are valid in a general way but they don’t seem to be particular to the method of financing. At least I would need to see something other than econ 101 reasoning as evidence that they would be made substantially worse under whatever particular UHC scheme is under consideration.Report
Mostly I’m just covering my bases. I’m not certain how Medicare does handle such things, but Dad was on Medicare, and they paid all his bills until he died, so I’m assuming they just keep shelling out payments.
But as for my point about kids, I do see it, mostly in the upscale communities, where everyone has good insurance. How much does the cost go up if everyone could do that? Will the system start clamping down on that? I don’t know, I don’t know if anyone does. I think part of the reason our medical care costs so much is not because poor people consume too much, but because the middle class and above do. And it’s not even that they are going more often, but rather that they are demanding a much higher standard of care. One that involves all sorts of ‘make you feel good’ marketing buzzwords and materials.
Or maybe I’m wrong, and it really is poor people abusing ERs.
Thing is, healthcare is not post scarcity. What gets covered or not tends to fall on the insurance companies, and everyone seems content to let them be the bad guys and tell people that a loved one is on their own. When I think about the costs, it isn’t that I doubt we could afford the costs we have today, it’s that I doubt our political system can handle telling people that they are not getting the pricey care anymore, that they are done, so the costs will inflate because politicians don’t want to wrestle with that issue.
I mean, fer chrissakes, our politicians can’t even stop buying weapons systems the military doesn’t want.
As an aside, I’m not opposed to the government being the insurer of last resort. I think it’s a good thing. I love that being retired means the VA is there if I need it. Seriously, huge amount of stress that is NOT part of my life (and as I’ve mentioned before, the fear of being that poor again is one of the very few things that keep me awake at night – I remember how much my parents stressed every time I had to see a doctor, because I got a nasty infection in my ankle, or was spiking a fever for days on end, or had my appendix rupture, etc.). Not just for myself, but for my wife and Bug as well. I’m all for extending that to everyone, the same benefits and limitations. Who knows, it might cut down on ERs having to deal with non-emergent cases, if people felt OK going to an Urgent Care.Report
But as for my point about kids, I do see it, mostly in the upscale communities, where everyone has good insurance. How much does the cost go up if everyone could do that? Will the system start clamping down on that? I don’t know, I don’t know if anyone does.
How does the behavior of the poors on Medicaid, or lower-ranked enlisted on TriCare for that matter, compare to entitled soccer mom with insurance in the suburbs? If we don’t have that data surely it’s only for lack of gathering, which if true I find astounding.
As for the end-of-life problem, are private insurers really acting as a brake there? I see a lot of assertions and speculation but precious little references to studies or other empirical data.
I would also be remiss if I failed to point out that in these discussions we tend to speak of costs. But Cost = Price x Quantity. The graph Dark posted somewhere above shows the escalation over time of the prices of medical care. Quantity speaks to utilization, which is largely a function of demographics and access. I’m not going to say they’re totally unrelated as shifting the demand curve can alter the P/Q equilibrium point but they do seem to be largely independent issues.Report
The lack of information is one of the reasons I don’t have strong opinions on the potential costs for healthcare. I imagine the information is out there, I just have no idea where it is or how to find it. I only hope (thin as it is) that the people thinking hard about policy (like the 5 people CA is assigning the task) know how to find it and use it.
Your P/Q point is spot on and relates to what @dave-regio was talking about elsewhere in the comments.
With regard to my point about the standards of care: My wife and I both had to find temporary PCPs while we are in AZ for the year. I just need a doctor to keep an eye on my cholesterol and keep a Rx filled, so I just swing by the small Community Health Clinic about a mile from house. It’s the kind of place that is happy if you are covered, but doesn’t expect it. It’s less than my insurance allows, but it’s all I need.
My wife has a couple of issues that require more than just a PCP, and her insurance is accepted by the nearby Mayo Clinic, so she figured she’d give them a try. The level of service there is way more than what my wife needs (by her own admission) and she found it almost overwhelming. That’s got to be driving some of the P/Q, just through the quantity of service to an individual driving up the cost.
It’s like the difference between hitting the $5 car wash and the $20 car wash – both get the road dust and bug kill of the car, but the $20 wash adds wax, maybe an interior wipe down, etc. If people can get the $20 car wash for $5…
Now, does that mean if we have Universal coverage, every homeless person will be demanding to be seen at the Mayo Clinic, or every boutique clinic, because the gov will pay it? No, but I wonder how much it will drive demand for providers to increase the kinds of service my wife experienced because someone will pay it, and not among the ‘poors’, but among the middle class, who tend to have political power, and who really want that kind of service*.
PS, regarding the low level enlisted at military clinics, I was friends with guys who had families, and all of them tried to limit using base clinics not just because of the wait times and triage, but because there was always this low level worry that if you were there too often, your command would get wind of it and start wondering what was going on. Because they would, because the military, for all it’s faults, would try to engage some kind of social service for frequent fliers, because they weren’t stupid. It worked to a degree because you couldn’t bullshit that system so easily (no large selection of clinics to shop in order to obscure a paper trail).
*Thinking about this, I wonder how much middle class envy causes us problems. Just look at housing…Report
Yeah, that’s the basic trade-off. You rely more on a triage system and people waiting for care if you make it free at the point of delivery. It’s probably more equitable, but it also means some people are going to have to wait longer than they should.
Having care be free at the point of delivery isn’t a magic bullet or even a necessary condition for good UHC, but it also isn’t an impossible cloud candy fantasy.
It’s a policy choice with costs and benefits, and those costs and benefits mean it serves some policy priorities better than others.Report
It’s the old iron triangle again:
And it’s very easy to point at the ultra-rich and see how they have it done fast and done right and shout to the rooftops about, see? The *RICH* have health care the way it ought to be! We just need to take this and make this scale!
And then we get to learn this lesson again.
That said, there are a bunch of improvements that could be made… but they involve cutting corners.Report
I’m excited that my soon-to-be-former-state is trying this and it’s pleasing to see an audacious reach to the plan. The audaciousness of this plan is breathtaking to consider: California is so damn big! And its history teaches that ambitious governmental programs like this are simultaneously inevitably imperfect on the one hand, and substantial improvements upon the status quo ante on the other.
The study group is supposed to have a plan ready to go by 2021. Note that “by 2021” probably means “by September 1, 2021” for legislative and fiscal cycle reasons* — three years from today. All the same, three years is a relatively short time for something like this to be both studied, planned, and implemented. If they were starting from scratch, that would be one thing. But there is already a substantial and complex healthcare infrastructure here. There’s VA and active-duty military, and Federal price controls (Medicare coding and pricing standards are baked in to a lot of pricing and legal mechanisms) to consider at minimum.
For that I look to the state’s public housing subsidy programs, which are awash in poorly-administered blends of federal, state, and local money; governed by rules that can be manipulated with facility by those possessed of average degrees of cleverness; and thus the font of substantial corruption and fraud — and simultaneously are the reason we do not have triple the homelessness that we do. Or generalized public welfare, which again despite the fraud, graft, corruption, abuse, and waste nevertheless serve as an indispensable guardrail against a public health crisis of nutrition that otherwise might leave California looking like a failed nation incapable of feeding its own people. It’s almost as if government activity above a certain threshold of scale is necessarily going to have both failures and successes and therefore need continuous monitoring, administration, and improvement, all of which will be susceptible to human failures at the individual and enterprise level.
It’s all too foreseeable that what happened to the audacious, ambitious, high-minded, and future-oriented Cal Rail plan will happen to California’s universal health care: it’ll be way more expensive than initially projected, take much longer to realize, turn out to be not nearly as good as had been hoped for, and get bogged down somewhere between idea and implementation by bloat, graft, politics, and litigation.
And it will still be better than the status quo.
* My main man @michael-cain can explain better than me why governmental entities pick varying dates other than the calendar year for the endpoints of their annual planning cycles. As for me, I’m at peace with having to simply accept that fact without complete understanding all the whys and hows.Report
Elections are in November, legislatures convene in January, budgets get finished up by around May, add some time for the possible veto/override process, so the fiscal year starts on July 1. The feds were that way from 1840-something into the 1970s, when they shifted to October 1 because Congress could no longer get its budget done in six months. Most states (46 of 50 start on July 1) still think six months is plenty of time. It’s really just that simple.Report
I’m always reminded of O’Rourke’s line: if you think healthcare is expensive now, just wait until you see what it costs when its free. For the umpteen years, we have been sold the idea that we can somehow increase healthcare coverage and save money, with savings to come from “efficiency” that never actually materializes. Medicare and Medicaid are actually a bit less efficient than the private sector — they ARE run by the private sector with admin layered on. We’re also told that savings will come from preventative medicine, which is chimaera. Preventative medicine saves lives but it does not save money. Or people going to the ER less, an equal chimaera since places that have tried this have seen ER visits increase. And California’s initial proposal — no copays whatsoever — is basically a recipe for soaring costs.
If you want to sell universal healthcare as something we should do for our fellow citizens, I’m open to that argument. But the idea that will save money is absurd. It’s going to cost and it’s to cost a LOT.Report
if you think healthcare is expensive now, just wait until you see what it costs when its free.
Free healthcare can’t cost more than what we have right now, can it? I mean, your average person spends $600 a month, year over year , for nothin. That adds up to some serious cabbage. Like after a month or two.
Add: the other counterpoint to the view is that NO ONE IN THE ENTIRE WORLD has higher healthcare costs than the US. What that person is critiquing isn’t the health care system but the corruption of the US gummint. Not an idle criticism…Report
I have quite a few criticisms of the NHS, and have been making quite a few of them here, but the UK spends 10% of its GDP on healthcare, while the US spends almost 20% of its GDP on healthcare.
Yet, for all its flaws, their system still delivers better outcomes than ours.Report
Your point is based on a false premise: that switching to an NHS-like would magically undo the cost growth of the last 40 years. The cost of the US healthcare system right now is baked in. That’s where you start. Even the most optimistic economist thinks the most you could do is slow down the growth in spending.
And the cost will go up because you are suddenly insuring people whose healthcare spending is currently very low because they have no insurance. You’re also expanding it to people with pre-existing conditions, the most expensive part of the insurance pool.
For all the talk of how Obamcare was going to “bend the cost curve”, it didn’t. Individual insurance rates soared and healthcare spending grew at the same pace it has for the last two decades.
No, it can get much more expensive. And it will.Report
One of the problems with health care is that it’s touch labor by high-value practitioners, so advances in automation and production that boosted other areas of the economy really don’t apply, nor can we easily replace doctors and nurses with cheap illegal labor.
Our system of company-paid insurance doesn’t help keep costs down, either. In Britain most of the cars are company owned, and getting a company owned car is a standard perk. As a result, Britain also has the most expensive car maintenance in the world because customers are paying with someone else’s money. Many mechanics won’t even work on personally owned vehicles because the customers are a hastle.
And Britain doesn’t get the benefits of our private system, which is readily apparent in dentistry. They line up the kids and have government dentists yank all the bad teeth, whereas we pay a fortune for every dental treatment that scientists can come up with. In some fields, the lack of regulation and massive market forces drastically plummets the cost of care, such as laser eye surgery, which over here is about as common as frozen yogurt shops used to be. Heck, maybe the frozen yogurt and video rental folks went into laser eye surgery.
We could probably save a lot more money by self-diagnosis and reliance on Mexican pharmaceutical standards (no prescription required).
A month or so ago my boss was playing an alien in our summer camp, along with some of our staffers. About two days after the camp ended one staffer was suspected of having Lyme disease (quickly confirmed) and put on doxycycline. The next day my boss was suffering from a blinding, circulating headache, along with some other symptoms, and I offered my engineering advice: “You should get on doxycycline, which I have out in the bus out there because I became allergic to it long before my last prescription was finished. I also have a bottle of clindamycin you could take.” He ignored my engineering advice and sought medical treatment.
They put him on doxycycline (costing $20 more than my free offer) for Rocky Mountain Spotted fever, although the clindamycin would’ve probably been more effective. Then they billed him $6,000.
As an aside, a month or two earlier his mother-in-law got a circular pattern around a tick bite and started having headaches, and Suzette Kelo (of Kelo v New London fame) who was staying with us called her doctor back in Connecticut (Suzette is a nurse) and said “It’s Lyme disease”. Her doctor confirmed it and of course the prescription was $20 worth of doxycycline.
The CDC claims that Lyme disease and Rocky Mountain Spotted Fever are pretty rare in Kentucky, about 200 cases a year, but based on my experience this summer it’s more like a third of the population.Report
Mexican, UK, Brazilian, Canadian, French, etc. pharmaceutical standards are perfectly fine and safe, and most products are produced by the same large multinational companies all over the world.
I suffer from migraines. One or two pills of dihydroergotamine, 50 cents over the counter each, will kill the hardest migraine within an hour. However, you can’t find it over the counter in the USA, where a pop is about 100 dollars. I am lucky I buy them bulk when I travel. But, pray, why do my connationals have to pay 100 dollars, or suffer massive pain if uninsured?
[Megan McArdle, PBUH, has repeatedly written that the rest of the planet may have 50 cents migraine pills only because Americans pay 100 dollars. It’s only the American consumer, she argues, that pays for all the R&D that goes into discovering my dihydroergotamine pills. Absent the USA Health Care System, I would be immobilized by migraines (or pay via my insurance, lucky me). The way she explains it, the USA is doing God’s work for suffering Mexicans, Europeans, Brazilians, Canadians, Chinese, etc.
Bollocks. If that were true, let my pills be one dollar each worldwide, and there will be even more money for the pharmaceutical companies to pay for R&D, even foregoing the 100 dollars paid for each at the USA]Report
Can you explain what you mean in this part of the comment? Are you saying that you think McArdle is wrong about how the market is structured or are you saying that the market should be structured a different way?Report
I meant that she is, willfully, or unwillingly, wrong.
If suddenly, pharmaceutical companies stopped charging 100 dollars for a pill that is sold worldwide for cents, they would reshuffle their price structure to essentially make the same money. They would not, as Megan claims, kill their R&D. New formulas will still come into the market.
The “100 dollar pill, but only in the USA” is not THE price the planet has to pay for pharmaceutical R&D. It’s just a rent, a windfall, that pharmaceutical companies enjoy here because they can.Report
If you’re planning on outlawing someone’s business model, it’s dubious to just assume that business prospers after you’re done.Report
I doubt the Board of Sandoz in Bavaria, or GlaxoSmithKline in London, and discuss the business model as follows:
“So, it’s agreed, ladies and gentlemen, we will sell pill X at a 50 US cents per pill in 148 countries, and we will sell it at $100 in just one. All in favor, please say Aye”Report
True, what happens in the real world is 148 countries insist on paying only for the cost to make the pill, not to research it. So we have 148 free riding countries who can use the power of law to strip companies of their intellectual property.Report
Insists? Every single one of them? From Afghanistan to Zimbabwe. And how, do tell, do they enforce their insistence?
Only the USA, pudorosly, abstains from this insistence, in order to provide the world with salvífico medicine.
May I suggest the alternative explanation that 50 cents pays for both the manufacturing of the pill AND the R&D.Report
To the extent that it doesn’t and other countries are free riding on US-funded R&D, I don’t see why the US should be happy with that state of affairs. I mean, we’re freaking out that Latvia isn’t paying its “fair share” in military expenditures to support NATO. Why does, “We’ll just fund all the world’s pharmaceutical R&D through excessive payments for our own drugs,” sound sensible to the same people?Report
We shouldn’t be.
This sort of nonsense is the grain of truth behind Trump’s claims.Report
Mind you, I am quite sure we are not doing that. It’s just this is Megan McArdle’s argument (and I assume others, too) for why, not only medicine prices are so much high than in most of the world, but why we should not try to bring them down. Because the high prices in the USA is the only thing between us and the Black Death wiping mankind off the planet.
I’m quite sure the same level of R&D can and will it be maintained with a more balanced pricing scheme across the 149?? world countries, in which prices drop significantly in one of the countries, and raise slightly, or not at all, in the rest of themReport
In my question, I was trying to figure out why you think this. Mind you, I have no strong opinions, because I just don’t know that much about the topic. But what’s informing your view? Is it specific knowledge or a gut feeling?
This seems like one of those topics where there are empirical answers to these questions or at least some of these questions.
Apropos of that, I found this Brookings explainer on prescription drug prices to be helpful: https://www.brookings.edu/blog/up-front/2017/04/26/the-hutchins-center-explains-prescription-drug-spending/Report
Thank you for the link, which was quite complete.
You are right it’s my gut feeling speaking since I know very little about pharmaceuticals, but I’m fairly knowledgeable about price setting mechanisms in general, and the impact of R&D in price setting all across the energy sectors. Also, my work involves more than 20 different countries in four continents.
Hence, if you allow me to extrapolate and use my business and regulatory experience, I don’t buy McArdle’s argument. I’d much rather attribute it to “sell at whatever the market will bear”, which is what any good libertarian would do 🙂
Mind you, btw. There’s pharma R&D going on in several countries. Yet, McArdle argues, every pharmaceutical company, no matter its country of origin, pays their full R&D out of their USA revenue. And, should the USA enact regulations to address this misallocation of costs (Latvia, NATO, you know), every single company will be forced to shut off their R&D because every other country in the world, no exception, will forbid any price increase, not even one cent, on every drug in existence.
The 148 other countries don’t have that power. The price increases everywhere else shouldn’t be that big. Either McArdle’s argument is bollocks, or she has to provide evidence for it, because it defies common economic and business sense.Report
Forgot to add
The Brookings link is missing the most important graph: Net Income and cash flow from the pharmaceutical companies on a consolidated, worldwide basis.
If their income and cash flows has remained flat while USA prices have gone up, then there is some merit to the idea that they need the USA profits to cover their ongoing cost rate, including R&D. If it has gone up, then the USA is engaged in a massive subsidy to pharma shareholders.Report
How many new drugs have generic, bottom line, no-R&D manufacturers created?
For that matter, where are these massive “windfalls” (your word) going? When I was working for one of these companies it was pretty clear internally that they kept the lights on.
You cheaply get the best medicine research can create… 10(ish) years after the fact. If you need it during that first decade or so, well life sucks, but not as bad if it just didn’t exist.Report
Seems to me the truth lies in the middle. I don’t by the Pharma answer of ‘everyone else is free riding on the USA’. But a lot of countries do tightly control the costs of meds, and other countries get cheap meds because that’s the price the market will bear. The meds cost what they do in the US because we are willing to pay that much for them, or rather, our insurance companies are.
There is also the reality of regulatory hurdle. I don’t know if it is the same with drugs, but if an airliner is accepted by the US, and/or Europe, and/or Japan, a lot of other countries see that as good enough for them and don’t bother making a big deal of letting the plane ‘certify’ for their markets. I wouldn’t be surprised that if a drug is accepted in the US and Europe, are smaller, poorer countries going to push pharma to meet their approval process, versus just filing some paper work and paying whatever fee is needed?
But with regard to pharma, if the rest of the world that tightly controls prices decided to double what they were willing to pay for a given drug, I highly doubt the US would even see the price here dip even a little bit, because it’s not entirely about recouping costs, it’s about the costs the market will bear.Report
Way back in 2016, we argued about EpiPens when that was still a thing. The FDA had only approved one EpiPen and the people who made that product jacked up the price.
This did not happen in Europe because the EU’s equivalent of the FDA approved eight different EpiPen kinda things and they all competed against each other.
Vikram mentioned a friend of his who needed a product that was not approved by the US’s FDA (but was approved in Europe). He said that he had the friend ship the product over here and everybody’s happy.
Where I think the problem lies is in how my immediate response was something like “good for Vikram’s friend” rather than “Mein Gott! Vikram’s friend is taking his/her life into his/her hands by not using something approved by the United States of America’s FDA and instead trusting something that Germany’s slipshod medicine approval agency is overseeing!” (Here’s the second time we wrestled with that particular issue.)
The FDA is too restrictive. I understand that we want to avoid another thalidomide. But we’ve swung too far in the other direction. I’m not even arguing that we need to swing back to juuuuust before thalidomide. I’m arguing that we need to swing back to, say, German levels of caution.Report
The regulatory hurdle is, if anything, even higher here, in that FDA approval will go a long way to convincing other countries (or the EMA) that they should approve a drug. That in and of itself isn’t a big reason for higher prices (because the costs associated with FDA approval reduce the costs for regulatory approvals elsewhere), but the FDA is also generally not interested in the benefits of having competing products on the market, which other agencies are.
Those other agencies do want competition in large part because the countries they serve have universal healthcare systems that, one way or another, make the government much more interested in keeping the price down.Report
Here’s another bit of stupid….
There is no manufacturer in the us for the yellow fever vax. There is a European producer though. Since that’s kinda needed for folks travelling to areas with YF..for work, pleasure, or aid, a “work around” was cooked up by the FDA because you can’t get the vax in the US since it’s not gone through all the trials and testing. You gotta enroll in an “experimental regimen” and report any side effects. It’s stupid and a waste of time but it’s the only way around the “rules”. This makes the vax much more expensive than it needs to be.
SmoothReport
The yellow fever vaccine is free in most of Latin America, btw, though it’s a bit of a hassle to get vaccinated, because it’s a difficult to handle that needs to be kept refrigerated and must be used in complete batches, so you have to go to an authorized center, queu, etc.
I remember once I, and others, needed to corral people around in a health center in Lat Am to complete a full batch of people. Otherwise, they wouldn’t open the batch. We were able to find enough (like three more) people that agreed to be vaccinated to use the full vaccine batch.Report
There is no manufacturer in the us for the yellow fever vax.
The US is the largest global consumer of technetium-99m used in nuclear medical imaging. The US produces none of the molybdenum-99 which decays to technetium-99m, importing every bit that it uses. When I had a nuclear stress test a year-and-a-half ago, the tech told me that the generator producing “my” technetium was flown in from South Africa.Report
The issue is less who makes the vaccine and more about the lack of FDA approval.
Anyway, Sanofi-Pasteur just (like February) had a yellow fever vaccine licensed in the US, so you should be able to get it here without any particular difficulties within a few months.Report
Two years ago we got yellow fever vaccinations for travel up the Amazon right here at our Walgreen’s in the Midwest. Had to special order it and wait a couple of days, but no other hassle…Report
It wouldn’t undo the cost growth of the 40 years, but if it would slow it, well, there you go.
And of course, switching 40 years ago made the NHS much cheaper now, 40 years down the line, which suggests that, indeed, growth could be substantially slowed.Report
@mike-siegel makes some very good points. One of the problems with how we tend to talk about politics/policy is that we treat passing a law or adopting a program as the fait accompli, with too little thought about how all of the affected parties are going to react.
How much a single payer health system reduced costs on the United States would almost entirely be a function of how it dealt with the existing elements our current health care system (i.e. the existing medical insurance companies/private hospitals/pharmaceutical companies/doctors and other health care workers). And that just raises the question of why we don’t spend more time trying to make improvements to these existing elements and less time searching for the silver bullet.
Also, the “better outcomes” thing is subject to way too many confounding demographic and lifestyle factors to be particularly meaningful.Report
Health care problems in Sweden.Report
Health care problems in the US.
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Once again proponents of a UHC system do a study where we come in last… where one of the big things we’re judged on is whether or not the HC system is universal. Even if “improvements” sucked for everyone, if it resulted in more equal treatment we’d do better on these “studies”.
I see no reason to treat a study like that as a serious reason for UHC. It’s an opinion piece masquerading as science and trying to impose the author’s values.
The sub-title from their own link (to their own magazine) is “Because of the opioid epidemic, Americans have been dying younger for two years in a row.”
That link talks about how the opioid crisis is overtaking “gains… especially with heart disease and cancer”. So apparently the opioid crisis is both the responsibility of the HC system and going to UHC will magically just fix it.Report