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Two steps backward
Remember the health care debates of the 1990s? Defenders of the status quo, or more market-oriented versions thereof, placed their hopes in HMOs and managed care. Managed care did show promise in lowering costs, but few people liked the idea that mainstream institutions would simply say "no" to patients.
Democrats pushed a plan for national health insurance, based on a Hillary-led modification of the German health care system. Health insurance would be detached from specific jobs, reorganized into regional cooperatives, and new taxes would finance universal or near-universal coverage. For all its flaws and complications (and no, I do not support the idea), this idea still makes more sense for the American context than do the single-payer plans. They put all those smart Democrats in a room way back when, and there is a reason why they came up with this. It not only had some chance of passing, but compared to the single payer model it was more consistent with America's decentralized, federalistic, corporate interest-heavy ways of running government.
Sadly, current debates on health care have yet to reattain their status in the 1990s. I know full well why both ideas failed and lost popularity. But still, if we wish to debate health care today, we probably should be taking two steps backward.
Posted by Tyler Cowen on May 8, 2007 at 04:35 AM in Medicine | Permalink
Comments
Maybe your contention is one of those "we never had true socialism" lines, but hasn't the HMO, "more-market oriented" line been an abject failure?
Posted by: talboito at May 8, 2007 5:05:05 AM
"but few people liked the idea that mainstream institutions would simply say "no" to patients"
The Clinton-Magaziner health plan would give government a big role in saying no to patients. Should I take it that the 1990s Dems did not consider govt a "mainstream institution?"
Posted by: evm at May 8, 2007 8:05:06 AM
Most health care plans that have been seriously proposed of late--see Massachusetts, the Wyden initiative, the John Edwards campaign--don't sound worse to me than Clinton's plan, although they are certainly not without problems. I do not think single payer is much more likely to be enacted than it was in the 90s, if that is the concern.
Posted by: gundryggia at May 8, 2007 8:08:29 AM
Abject failure? Hyperbole?
Posted by: josh at May 8, 2007 8:15:59 AM
The "single-payer health care" idea just needs snappier marketing, like "HMOs and the DMV: Together at Last!"
Posted by: Arthur Davidson Ficke at May 8, 2007 8:32:00 AM
Arthur -- Good one! I'm going to use that line.
Posted by: jp at May 8, 2007 9:09:56 AM
How well does "voucher HMO" fly, as a market-hybrid? Does any country do that? Or does modeling suggest any level of success? (lazy web)
Posted by: odograph at May 8, 2007 10:11:01 AM
In health care, except for the very wealthy, we can have our medical decisions made by corporations in it for the profit, or by the government.
Personally, I prefer government to make the choices. I would rather have the limitations be the result of a societal decision than a profit-making decision. But, I may be crazy.
Posted by: Allan at May 8, 2007 11:12:04 AM
" would rather have the limitations be the result of a societal decision than a profit-making decision. But, I may be crazy."
First: false dichotomy
Second: Yes, you are.
Posted by: andy at May 8, 2007 11:40:59 AM
When comparing the different plans (single payer, John Edwards, Mass., Hillary-Care), we should keep in mind that most of the new ideas have the distinct advantage of being only ideas. Many of them will look less attractive when put in actual Bill form. Hillary-Care was messy, but it was an actual solution. After reading the Edwards Plan, I have to ask, "what are the details?".
Posted by: JB at May 8, 2007 12:06:57 PM
Allan -- It's very likely that the profit-making decision would be more "societal" than one made by government. The government decision would be made by a bureaucrat following rules established partly by Congress and largely by agency fiat (subject to non-binding public comment). Feedback from society regarding the bureaucrat's performance and the efficacy of the rules would be indirectly felt at best and greatly dulled by the various layers coming between the agency and the voters. By contrast, the profit-making decision would be made by a private bureaucrat whose employer will feel it directly in the pocketbook whenever a customer decides (as he is free to do) to take his business elsewhere. The profit-making decider will therefore be *more* sensitive to what "society" (its customers and potential customers) wants.
Posted by: jp at May 8, 2007 12:09:47 PM
After reading your meandering musings on health care policy for two years, I think I can sum up your thought processes, or at least, how they appear to me, wrt to judging whether or not a health care policy is "good".
The problem with the other health care policies in other countries that deliver essentially equal outcomes for about half the cost: They're bad because they're different.
Ideally, the best health care policy is the one with the least difference.
Because HillaryCare is less different from our current disastrous system than the other health care policies which deliver essentially the same health outcomes for about half the cost, it's better.
And it doesn't matter whether a less different system's eventual costs or health outcomes are worse than the quite varied alternatives (that deliver essentially the same health outcomes for about half the cost), the less different it is, the better.
Finally, anything that increases costs for healthy people is bad.
I don't believe that you've provided any evidence over the last two years to contradict the above analysis. In particular, the various psychologizing posts about 'the possible' generally reduce down to the essentially banal 'people hate change'.
Am I right?
Posted by: Russell L. Carter at May 8, 2007 12:24:13 PM
How can we really say the U.S. system is "private" or "free market" health care? You have a handful of government-approved insurance providers, with the largest provider being SS, a system that is pretty much micromanaged by state and federal governments, and where the government per-capita spends more on health care than countries like Canada.
Isn't it more fair to say that the debate is between non-monopoly socialized medicine (as practiced in the U.S.), vs. monopoly socialized medicine (as practiced in say Canada)? If you call the U.S. system a "free market" system, you can call pretty much anything a free market system.
Posted by: RexRhino at May 8, 2007 5:05:24 PM
Rex, Perhaps it would be more to the point to argue that the choice is whether overspending for health care is manifested in corporate profit, on the one hand, or government ineffeciency, on the other.
In either system, I believe there will be inefficiency (defined as money spent on the system that does not directly contribute to health care for the individual). I further believe that, in both systems, the lower level bureaucrats will treat claimants the same.
However, the motivating factors for executives will be different. Private executives will be motivated by profits. Government executives will be motivated by pleasing constiuencies who can influence votes.
In either case, I support having a dual system, one for the rich (define the term as you see fit) and one for the rest of us. We can't really stop the rich from doing what they want and, if we ration health care without providing an out for those with money, they will simply fly to India (much as the wealthy flew to Sweden in the 1950s to have abortions and sex-change operations (if these are not urban myths)).
So long as we view health care as an essential right, I do not think that the private sector has any competitive advantage over the government sector.
Posted by: Allan at May 8, 2007 6:26:01 PM
To end the post. So long as we view health care as an essential right, I do not think there is any advantage that a private system would have over a government system.
Posted by: Allan at May 8, 2007 6:28:35 PM
I think the reason why a single-payer system is thought of as a delicious utopia by many liberals is simple... it's a very direct system for removing many of the incentives that cause the problems in our current health care system, which tend to be predominantly profit-oriented.
I don't think that it is an absolute necessity to have a single-payer system, though it may be easier to implement the proper incentives. Some examples of what I mean:
-the incentive to deny coverage to individuals based on their potential for reducing profits
-the disincentive to put into place effective long-term health management programs, i.e., electronic health records due to the potential for clients to change vendors before the gain is realized
-the incentive by providers to recommend services that have diminishing marginal returns in order to maximize their own profits
In a free market, the improvements are assumed to occur because the customers have freedom of choice to change vendors if they aren't satisfied. In the health care/insurance industry, this tends to not be true. I suspect that the problems associated with escalating costs are most likely associated more with the health care industry, rather than the health insurance industry. The insurance companies, however, deserve a chunk of the blame for the fact that many people in America are uninsured.
Posted by: Scott at May 8, 2007 9:38:51 PM
"In a free market, the improvements are assumed to occur because the customers have freedom of choice to change vendors if they aren't satisfied. In the health care/insurance industry, this tends to not be true."
Scott -- I don't know what your basis is for asserting that it "tends to not be true." However, even assuming that it is true, how can we conclude from the current system what improvements would occur in a truly patient-driven system? Currently, tax incentives (primarily, the exclusion of health benefits from taxable income) cause the customer to be, in most instances, the patient's employer, which chooses what coverage the patient will get. The service providers don't really answer to the patients, since the patients aren't paying them more than a tiny fraction of what the employer's insurer pays. Insurers likewise respond to their customers, the employers, rather than to the patient.
If we switched to a system in which health benefits were taxable compensation (i.e., a nearly 1-to-1 trade-off with salary), and where high-deductible insurance was the norm for all but the very poor (who would get government-subsidized care), then the incentives pushing service providers to innovate would change drastically, for the better. (This is Arnold Kling's proposal, BTW. See his short, excellent book "Crisis of Abundance.")
Posted by: jp at May 9, 2007 11:30:54 AM
In case it's not clear, my "even assuming that it is true" above means "even assuming that Scott's assertion is true. . . ."
Posted by: jp at May 9, 2007 11:50:05 AM
I think we should run our health care system like they do in Sweden. Over there the goverment pays for everyones health coverage. This way everyone from the rich to the poor could get equal coverage. Yes this would increase taxes but if you ask me it would be worth it. But if everyone had equal health coverage it would increase the waiting time at health care facilities. But if "all men were created equal" we should all have the same oppurtunity for equal health coverage.
Posted by: Melissa at May 9, 2007 8:30:28 PM
National health insurance does have its attached demerits.
Posted by: Smart Card Development Solutions Consultancy at May 16, 2007 5:32:06 AM
Private sector does not enjoy any liberties and benefits as compared to the govt sector.
Posted by: Outsourced Product Development Center at May 16, 2007 5:36:08 AM
Health care system shud be enforced to look after the interests of the people.
Posted by: Offshore Software Product Testing at May 16, 2007 5:47:18 AM
Money spent on health care will not directly go in the favour of individuals as long as the bureaucrats will not understand what is good for people nad not them.
Posted by: Software Development Outsourcing at May 16, 2007 5:51:32 AM
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