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I genuinely wish to know
Matt Y. writes:
...the forces of progress are fated to an arduous generational struggle against the health care industry [TC: not just private insurance?] and there's not much to be done about it.
Now I can understand the view that market forces are doomed to failure in the health sector and that government is the best of a bad set of choices. That is not my opinion, but I grasp why someone might believe that. I wish to ask all you single-payer advocates -- in absolute terms -- how good (bad) do you think it will be?
Let's rate "the paper clip industry" as a 9 out of 10. Paper clips are pretty cheap and usually they work. Let's rate the better federal agencies as a 6.5 out of 10. Let's rate HUD as a 2.5 out of ten.
How will national health insurance do, keeping in mind that U.S. doctors do not wish to have their wages cut, Americans want the right to choose their doctors, and the U.S. is a huge, messy, decentralized, federalistic country with lots of cheats and massive, hard-to-eradicate inequalities at many different levels.
I give it about a 3. How about you?
And what are your views on the likelihood of today's flawed system improving without drastic single-payer reforms?
Posted by Tyler Cowen on January 11, 2007 at 04:24 PM in Medicine | Permalink
Comments
How well does the Veterans system do? Medicaid? Medicare? Foreign health care systems? Those could give us some idea.
Posted by: Mike Huben at Jan 11, 2007 4:39:46 PM
I'm one of those who believes market forces are doomed to fail, but my largest concern is that we will screw up progress if we do too much right now. We are on the precipice of unprecedented change. In 15 years, we will all be able to get a full DNA reading pretty inexpensively. In that context, the ability of medical services to scientifically address our problems easily & cheaply will soon make our current system seem archaic. I think there will be wholesale change in how health problems are addressed, and I think it may be more feasible in those conditions to have deflationary pressures, where new, less expensive ways to address needs are consistently developed. Now, groping around in the dark for health solutions means that more & more expensive methods are developed, with little top end to what people will spend for life-saving technology.
Anyway, my fear is that we will put a huge bureaucracy into place that addresses the current context, but that will be too powerful to change when the context changes. And, in the end, the real world-changing innovations that are just around the corner will be stifled by it.
Posted by: kebko at Jan 11, 2007 4:45:14 PM
Single-payer health care in the US? I think it will be just like government schools.
Upper middle class neighborhoods will have GREAT services - maybe 9 out of 10. There will be professional managers who will get fired if performance, as measured by service quality, isn't up to snuff.
Poorer folks will get whatever model you think Marion Barry would provide. I predict that health clinics in populist-leaning cities, like their schools, would be run as job programs for the politicians' constituents instead of service providers - maybe 2 or 3 out of 10.
Rich folks will still go to private doctors just like they send their kids to private schools.
Posted by: evm at Jan 11, 2007 4:48:09 PM
Gee, evm. I was going to make a brilliant point on this topic, but when I read your post, I realized I couldn't have put it better.
Posted by: pawnking at Jan 11, 2007 4:59:43 PM
Single-payer is not primarily about controlling the cost of care; it's about expanding coverage. The hope is that we could current shift spending on redundant administrative systems to spending on medical care for currently uninsured people.
If, under single-payer, we were to continue to spend 16% of GDP on medical care, the idea just might work. If the single-payer agency were well-run, it might achieve 6-7 out of 10, which is probably about how most people with good coverage rate their insurance now. (If the single-payer agency tries to reign in costs, all bets are off.)
The problem (as kebko senses) is how such a system deals with changing technology. Without market signals, how does such a system decide which new treatments should be covered and which shouldn't? How does it decide when people would be happier to spend a larger fraction of their income on medical care and when they would prefer to spend less? Under a single-payer system, there is a real danger that such questions remain unanswered or mired in poltics, standards of care stagnate, and customer satisfaction declines.
Posted by: David Wright at Jan 11, 2007 5:03:22 PM
I think David Wright has makes good points, although I would put the current system at about a 3, and what I expect warts and all from Single Payer to be about a 5.
On the changing technology, though, I think he is missing the boat - get off the government issued monopoly bandwagon, and lets start innovating ways to incentivize innovation - see Dean Baker for actual ideas.
Posted by: theCoach at Jan 11, 2007 5:07:42 PM
We already have socialized healthcare (most people have their healthcare paid for by someone else, half of it is paid for by the government, sounds socialist to me).
So the question isn't whether socialized healthcare is better than free market healthcare, but whether a different socialized healthcare system might be better and more cost effective than the mess we have now.
It also is interesting to consider what might happen if healthcare were de-socialized.
Posted by: Half Sigma at Jan 11, 2007 5:07:56 PM
I think EVM is optimistic. The Canadian and British experience shows that the middle class can expect 4 or 5 at best, certainly not paper-clip-high 9. And keep in mind that the United States provides a critical outlet for the Canadians and Brits as it is--if the US goes to a Canadian model, where are our upper-middle-class people going to go to escape government health-care? Singapore? Thailand?
Posted by: Ted at Jan 11, 2007 5:16:46 PM
I am with mike on this on. I don't see how the US system will be so much worse than actual existing state run medical service systems that do pretty well. Ask the Canadians to rate their system.
Posted by: joeo at Jan 11, 2007 5:16:59 PM
Professor Cowen, this begs the question of how you would rate the current healthcare system. I would rate my own healthcare at a 7 (Very good quality but expensive, particularly when you add in the time I have to spend tracking/paying doctor bills). But there is a pretty good number of Americans for whom it is a 1 or 2 (I hesitate to say 0 because there is always the emergency room).
Single-payer is not primarily about controlling the cost of care; it's about expanding coverage. The hope is that we could current shift spending on redundant administrative systems to spending on medical care for currently uninsured people.
But expanding coverage must imply controlling costs, unless you want to spend ~18% of GPD on healthcare instead of 16. Do you really think that the Government will manage to cut administrative costs by 2% of GDP? Do you think that a plan can be devised that cannot be gamed for at least that amount?
Posted by: rcriii at Jan 11, 2007 5:36:22 PM
1. If (as David says) "redundant administrative systems" are a significant factor in health care costs, why don't we see a wave of mergers among insurance companies? You don't need a government to get economies of scale.
2. Medicare and the VA benefit tremendously from innovation financed by private insurance payments. I don't care about cheap paperclips today, I care about whether 30 years from now iPhones will be cheaper than paperclips.
3. Having said that, I really love the French system. I had to spend most of two weeks with a sick family member in a French hospital once. The buildings were old and the smoking lounges were weird, but the doctors were the equal of top American standards, and the cleanliness and infection control was far, far superior. There is a case to be made that the single-payer systems are more effective in dealing with the externalities of spreading infections.
Posted by: DK at Jan 11, 2007 5:38:51 PM
Tyler--
Out of curiosity, what do you rate the current US system (maybe differentiating among different class levels, as some posters have already done)?
Posted by: Van at Jan 11, 2007 5:39:17 PM
I have a condition called Otosclerosis which causes progressive hearing loss. Fortunately, it's easeily fixed with surgery. The usual treatment is to do each ear separately, the second 6 months after the first, with regular doctor visits in between.
I'm insured through my wife's employer. We had blue cross (CA) HMO. It took EIGHT MONTHS for me to see the surgeon from when we started the process. My surgeon has to play games with insurance company rules (like having people admitted for surgery as outpatients before the surgery, then changing their status to inpatient after the surgery, even though an overnight stay is medically necessary. He also, had to write a prescription in which he claimed I was alergic to some medication to prescribe me his preferred treatment. If he didn't, the insurance company would have wanted me to take medication which damages the ear.)
Yeah, the current system works great.
Now throw in a new wrinkle: My wife's employer is changing insurers effective Jan 1st. I have to go through the whole referral process AGAIN to continue seeing the doctor who is in the midst of treating me.
Tell me why we don't want single payer again. I think giving the current system a 3 is awfully generous. If I had 3, I think I'd be happy. I had much better service when I was on unemployment 5 years ago. Hell, I've had better service for Jury Duty, paying tickets, doing anything at the post office. Dealing with health insurance is probably the worst encounter in my life. Anyone who says otherwise, has probably never used their insurance.
Posted by: don Hosek at Jan 11, 2007 5:46:37 PM
In response to Joeo, as a Canadian I'd rate our system as a 6.
For minor illnesses that require a quick trip to the doctor we have a great system, at least in the part of the country where I live. There's no cost, but also usually no significant line, and prescription drugs are reasonably priced. I would rate this aspect of our system an 8.
For serious illness we also have a good system. There are longer waits than patients with good insurance would face in the US (and the occasional scary case), but overall the statistics I have seen show the results are approximately as good as in the US. I'd give this a 7.
Where our system fails is in many non-essential procedures. Here waits can be very substantial, and are obviously a big problem with the Canadian system. I would give this part of our system a 3.
That said, we spend 7.7% of GDP on health care, while Americans spend 15%. You'd better get better care in some areas. As a young person who isn't particularly worried about hip replacement I'm biased, but given the choice between the Canadian health care system or paying over twice as much (your per capita GDP is higher than ours) to join the US system, I'm happy where I am.
Posted by: Nathan at Jan 11, 2007 5:47:57 PM
Do people think the problem with the current system is market failure as opposed to regulation? In any case, at least with the current system new treatments are constantly being invented. Even if you think there would be an immediate improvement in the quality of care, this may come down to discount rates again.
Posted by: josh at Jan 11, 2007 6:25:13 PM
I am surprised that none of the economist think that single payer health insurance will (economically) turn all health care providers into grain farmers. Since they get paid the same no matter what, the health care industry will concentrate on doing one thing: lowering costs. If a technology lowers costs or increases productivity it will be adopted. If a new technology improves outcome but does not lower costs, it cannot be adopted.
On a second note, I keep wondering if the white upper middle class is getting excited about socializing medicine because very few of them work in medicine anymore. Most large urban and suburban hosptals are dominated by minorities and immigrant workers. It should be no surprise that white, middle class cubicle workers want to cut their pay and lay many of them off.
Posted by: superdestroyer at Jan 11, 2007 6:45:16 PM
don: Don't forget that single-payer is about extending coverage, not improving the quality of coverage. Single-payer could just mean that a lot more people get to have the crappy experience that you did. For some people, that would be an improvement. For many others, it would be a significant reduction in their standard of care.
DK: You have a good point about administrative costs. It may be that heavy state regulation of the insurance industry discourages mergers. I don't know for sure. I do know that advocates of the Clinton-era single-payer plan claimed that they could cover the uninsured out of administrative savings.
Posted by: David Wright at Jan 11, 2007 7:13:20 PM
Nathan,
Several sources give Canadian health care spending at 9.6-9.9% of GDP.
Note that Singapore is apparently below 4% of GDP and passes both countries using many quality metrics. No delays/waits either.
By the way, I have used emergency rooms quite a bit at various points in my life. I would rate them at least a 5.
Posted by: Peter Schaeffer at Jan 11, 2007 7:19:47 PM
evm,
The state of health care in New York City supports your claims. Massive expense. Low quality. Heavy political control. Large scale fraud. Google Dennis Rivera. Ugly at best.
Posted by: Peter Schaeffer at Jan 11, 2007 7:25:09 PM
And what are your views on the likelihood of today's flawed system improving without drastic single-payer reforms?
I'll be conservative and say 99%. Unless someone can suggest a reason why it would suddenly stop improving.
Posted by: Paul Zrimsek at Jan 11, 2007 8:12:35 PM
I hope its MUCH better than the VA. From today's "The Hill":
http://www.thehill.com/thehill/export/TheHill/News/Frontpage/011107/tape.html
"A secretly recorded meeting of researchers working for the Department of Veterans Affairs indicates that the department did not take seriously congressional requests intended to safeguard the personal and medical information of veterans.
"“If you want to know what’s the real purpose of the data call, read Machiavelli. It’s about power, it’s about Congress saying, ‘VA, you’re accountable to us,’” one Veterans Affairs official, Dr. Joseph Francis, says on the tape. “We’re not asking people to do an A-plus job on this report.”
"“Congress is actually rather angry at the VA because we’ve been technically breaking the law for a decade,” Dr.Francis said. “In 1996 legislation was passed called the Clinger-Cohen Act that really set the timing for all agencies to follow certain types of business principles in IT [information technology] procurement and IT management, including cyber security. We’ve basically ignored that"
"It really illustrates that, to the researchers at the VA, the veterans are guinea pigs and are there to promote the research, which is used in turn to promote researchers’ careers.”
The source claimed that high-level researchers at the department are not sufficiently concerned about the vulnerability of medical information because of financial stakes tied to their research.
Posted by: m g at Jan 11, 2007 8:20:42 PM
don:
I certainly hope that your medical problems are resolved. But beware of favoring a single-payer system because you expect it to solve all of your problems. The government will either implement exactly the same sorts of policies that are implemented by your HMO, or it will costs continue to skyrocket.
Posted by: Scott Wood at Jan 11, 2007 9:35:19 PM
You know, after having sat with my wife through the 2.5 year ordeal to get the federal government (Social Security) to recognize her post-car-accident disability, I have little faith in the government to deliver or manage services to/for individuals on an efficient basis.
Put me down for a 1.
Posted by: MikeTheActuary at Jan 11, 2007 9:59:25 PM
evm and pawnking, I find it hard to imagine how public schools that cost 1.5-5X as much as private schools with dramatically better outcomes using the same student pools, which is what the upper middle class gets, count as a 9. I'd call that a 4 or a 4.5
I once actually worked in an urban high school in Cincinnatti from which No Student Had Ever Graduated (Ohio imposes standardized test requirements for graduation). That's a 1, generously.
I'd rate our current socialized system at a 3. Really not much better than HUD. Single Payer in Canada and the UK looks like a 6 from here, but I haven't actually used it. Also, I'd expect worse from the US in any event, a 5 at best and likely a 4. Still, that would be improvement.
I think that healthcare is special and even pure market forces would provide a rather weak solution, compared to the usual, but I'd expect that to work somewhat better than single payer here, possibly a 5, or a 6 if emergency care remained free for those in immediate need.
My best guess is that an 8 or a 9 would be possible if genuinely well intentioned people were to try a wide variety of radically different socialized systems in parallel with market solutions and then implement the best practices of each more broadly. This doesn't seem likely to happen however.
Posted by: michael vassar at Jan 11, 2007 10:28:11 PM
"I think that healthcare is special"
A lot of people do, but I can't help but suspect (strongly) that this perception arises from the fact that health care is already massively socialized in the US (as well as pretty much everywhere else in the advanced world). A lot of the familiar, and peculiar, practices which we associate with medicine and which prompt us to consider medicine "special" may arise, not from causes intrinsic to the field, but from causes originating in government meddling.
Do we really have any comparable examples of a free market in health care in a first world country, one without massive government intervention all over the place? Examples of first world countries are: the US, Canada, the UK, France, Germany. For starters. Does a single one of these have anything approaching laissez-faire in health care? If not, then how do we really know what a free market in health care in an advanced country would look like?
Posted by: Constant at Jan 11, 2007 10:57:44 PM
