About 6 in 10 Democrats at the Iowa caucuses on Monday reported that they support eliminating private health insurance as part of establishing a single-payer health-care system, according to preliminary poll results, suggesting that most of the party’s voters agree with Sen. Bernie Sanders (I-Vt.) on the divisive issue.Only these voters can reelect Donald Trump.
Showing posts with label Single-Payer Systems. Show all posts
Showing posts with label Single-Payer Systems. Show all posts
Wednesday, February 5, 2020
Iowa Caucus Goers Strongly Support Single-Payer Health Care
This from the Washington Post:
Tuesday, October 29, 2019
Medicare for All––the Bernie Sanders and Elizabeth Warren Health Care Plans
The Question That Single-Payer Medicare for All Advocates Need to Answer
You are probably thinking that question is, How are you going to pay for it?
Ultimately, yes.
But, I will suggest there is another critically important issue that is part of the overall question about how it will be paid for––What will your plan do to our existing health care system?
Medicare and Medicaid cost less than commercial insurance because Medicare and Medicaid pay providers––doctors, hospitals, and other health care providers–– a lot less for their services.
Advocates argue their single-payer Medicare for all health care system will overall cost us all a lot less. They are right that their systems can be a lot less expensive by expanding Medicare to everyone––primarily because government payment rates are so much smaller.
But here's the hitch––paying Medicare rates on behalf of all patients would literally bankrupt the system we have.
Wednesday, October 23, 2019
The Public Option's Silver Lining?
Joe Biden's Health Insurance Plan Would Fix the Individual Health Insurance System and Have the Potential to Politically Stabilize the Entire Private Health Insurance Market for Decades to Come
In a prior post, I argued that the Biden health plan directly takes on the most problematic parts of Obamacare by making individual market coverage affordable––and would therefore make the individual insurance system much lower in cost and therefore financially sustainable.
A lower cost individual market would also make the entire private insurance market more politically sustainable––if people find their coverage affordable why move to a complete government takeover such as Medicare for all?
As part of his plan, Biden also calls for a "public option."
Biden's Public Option
In a prior post, I argued that the Biden health plan directly takes on the most problematic parts of Obamacare by making individual market coverage affordable––and would therefore make the individual insurance system much lower in cost and therefore financially sustainable.
A lower cost individual market would also make the entire private insurance market more politically sustainable––if people find their coverage affordable why move to a complete government takeover such as Medicare for all?
As part of his plan, Biden also calls for a "public option."
Monday, October 14, 2019
There is Now No More Support for a Medicare For All Single-Payer Health Care Than There Was in 1977, or 1993, or 2009
Buy HMO Stocks––They're a Bargain
The more things change the more they stay the same.With many of the Democratic presidential candidates' flirtation with Medicare for all, the topic is once again front and center going into the 2020 presidential campaign.
Just like it was when Jimmy Carter ran on a Medicare for all platform in 1976––and it turned out there weren't the votes for it in 1977 even though Carter had a filibuster-proof 61 Democrats in the Senate and a whopping 292 Democratic House seats. In fact, Carter failed to move any significant health care legislation.
In 1993, the Clintons didn't even try to move a single-payer plan even though the Democrats controlled 57 Senate seats and 258 House seats because only about half of the House Democrats favored a single-payer system.
The same for 2009 when both Hillary Clinton and Barack Obama ran on health care platforms during the primaries that looked a lot like the eventual Obamacare because again only about half of the House Democratic caucus favored a single-payer program.
Now in 2019 we are in the very same place we were in 1977, 1993, and 2009––only about half (118 as of September 6th) of the House Democratic caucus now supports the Medicare for all proposal introduced by Progressive Caucus Chair Pramila Jayapal (D-WA).
Tuesday, June 7, 2011
Inconvenient Facts for Both Republicans and Democrats—Neither Side’s Health Care Proposals Are Supported By Past Performance
I call your attention to Ezra Klein’s column in the Washington Post this morning.In it he cites data that has been out there for a long time but Ezra puts some perspective on it that never occurred to me before.
Examining the Kaiser Family Foundation brief, “Health Care Spending in the United States and Selected OECD Countries” he points out, “Our government spends more [as a percentage of GDP] on health care than the governments of Japan, Australia, Norway, the United Kingdom, Spain, Italy, Canada, or Switzerland.”
The data would seem to indicate that even our single payer government-run American health care programs, Medicare and Medicaid, cost way more than similar health plans in these nations.
The argument is often made that we should adopt a single payer—or perhaps a “public option”—health plan in the United States in order to control costs and cover everyone. But it would appear that even those programs in America are way too expensive when compared to similar programs in other industrialized nations.
As for the Republican market-based approach, Klein also points out that those programs have been ineffective at cost control. House Republican Paul Ryan often cites the Medicare Part D drug benefit as proof his proposals to privatize Medicare would work better than what we have. But as Klein points out, Part D premiums have risen 57% since 2006 and the program is on track to see nearly 10% growth in annual costs over the next decade.
And, the existing private Medicare Advantage program “ended up costing about 120% of what Medicare costs.” That’s a new data point for me. However, I do know that Medicare Advantage insurers in recent years have been paid at least 13% more than traditional Medicare.
My takeaway from all of this is that neither side has the answer to bringing America’s health care costs under control.
Liberals think that a single payer, or at least a “public option,” is the best hope and point to Europe and Canada as proof of that. But, as a percentage of GDP, the cost of our already government run health care plans rivals many of those nations' entire government spending on health care.
Republicans argue we need to move entirely toward market-based solutions. But with two big market-based Medicare programs already operating, neither Part D nor Medicare Advantage has come close to demonstrating affordable cost growth.
But both Republicans and Democrats do have something in common—each is offering supposedly painless solutions. For the liberals, just put the government in charge and we will magically have affordable health care for everyone. For the conservatives, just put the market in charge and we will have a solution.
Painless solutions might be politically attractive, but the data indicates they will not get the job done.
Recent post: What It Will Take to Bring America’s Health Care Costs Under Control––We Have to Change the Game
Wednesday, April 16, 2008
The "Frontline" Report on International Health Care, "Sick Around the World," is Worth an Hour of Your Time
Last night the PBS program, "Frontline" gave us an hour long tour of the health care systems in Great Britain, Japan, Germany, Taiwan, and Switzerland and asked what can we Americans learn from them.
When I heard about the program, I was dubious that an hour long report covering five different systems could possibly be helpful. But this hour long tour de force accomplished a great deal and I came away impressed.
Did the report skirt a number of really important issues and fail to mention things that critics or supporters will be upset about? Yes.
But from my experiences in international health care I have to say it is a generally fair and balanced job. "Sick Around the World" is a constructive contribution to our national health care debate.
As the report pointed out, most of these systems rely heavily on the health care market--private insurers, private doctors, and private hospitals.
The program also offered a number of conclusions from their investigation of these national health care systems which, from my own experience, I cannot deny:
I strongly recommend you spend an hour online watching, "Sick Around the World."
All of my posts on international health care
When I heard about the program, I was dubious that an hour long report covering five different systems could possibly be helpful. But this hour long tour de force accomplished a great deal and I came away impressed.
Did the report skirt a number of really important issues and fail to mention things that critics or supporters will be upset about? Yes.
But from my experiences in international health care I have to say it is a generally fair and balanced job. "Sick Around the World" is a constructive contribution to our national health care debate.
As the report pointed out, most of these systems rely heavily on the health care market--private insurers, private doctors, and private hospitals.
The program also offered a number of conclusions from their investigation of these national health care systems which, from my own experience, I cannot deny:
- These nations have health care systems--often as much market oriented as government oriented. Market or government, the U.S doesn't have a health care system as much as a hodgepodge of things we have drifted into over the decades and that creates much of our problem.
- That the quality of health care in each of these nations is generally as good as ours--it is a myth that the U.S. gets a lot more quality health care for the money we spend.
- That these nations take advantage of market forces but at the same time all impose limits that so far we have been unwilling to impose.
- That nations who successfully rely upon private insurance use only not-for-profit insurers and the insurers must accept everyone.
- That everyone is mandated to have insurance and the poor and near poor receive adequate premium support.
- That doctors and hospitals are required to accept one standard price structure--and their prices are far less than ours.
I strongly recommend you spend an hour online watching, "Sick Around the World."
All of my posts on international health care
Friday, October 12, 2007
When It Comes To Drug Prices the Europeans Are Better Health Care Capitalists Than We Are!
Sometimes I think the government-run European health care systems do a better job of using market tools to control their drug prices than we do in the U.S. market.
For example, some government-run systems in Europe, France for example, are not afraid to take a drug off their official formulary if they don't get a competitive price.
In January, the Democratic House passed a bill requiring Medicare to negotiate prices with the drug industry. But for all their election-year bluster last year, the Democrats put no teeth in the measure. When the day was done, Medicare would have had no power to take a drug off the approved list if the government didn't get a good price. But being able to walk away from a vendor is how good capitalist market negotiations work. Would you go to the Chevy dealer, tell them you are going to buy the car no matter what the price, and then demand a better price and expect to get it? But, that's exactly what the Dems put in their Medicare drug price negotiation bill.
That bill later died in the Senate.
It is ironic that Part D insurance companies have the right to exclude a particular drug from their list if they can't get a good price--although they rarely do. Insurers are rightly required to include a wide range of drugs in each class--but not every drug available in a particular class.
It looks like those "sissy" Europeans have turned out to be better market capitalists once again.
This from today's Wall Street Journal:
Let me repeat that last line: "In the U.S., health-care payers -- which include employers and insurance companies -- have traditionally been more generous than European health-care services in paying for new drugs.""To overcome European state-run health-care systems' increasing stinginess about paying for new drugs, some pharmaceutical companies are taking a novel approach: pay for performance.
"Johnson & Johnson has promised to reimburse Britain's National Health Service when patients don't respond to the U.S. company's blood-cancer drug Velcade, in a deal expected to start later this month. In France, J&J has made another agreement on its schizophrenia treatment, Risperdal Consta, offering to pay back the French health-care service some of the money it spends on the drug if tests don't show the injectable medication helps patients stay on regular doses.
"And France's health-care service says it has discussed pay-for-performance contracts with GlaxoSmithKline PLC, but won't reveal details. A Glaxo spokeswoman says the company has talked with European governments about "pricing-for-value" deals, but declined to provide specifics.
"Drug companies are offering these deals instead of simply lowering prices in part because they are fearful of setting precedents that would cause insurance payers world-wide to demand price cuts.
"J&J spokeswoman Kate Purcell says J&J decided to offer a rebate on Velcade instead of lowering its price. "We know our drug works" and "don't accept that our drug wasn't cost-effective," she says. British officials had recommended late last year that the NHS not pay for Velcade because they didn't think the expensive drug was effective in enough people. A full course of Velcade can cost up to $49,000 per patient. J&J then offered to reimburse the NHS, in either cash or product, for patients who don't respond adequately to treatment.
"In the U.S., health-care payers -- which include employers and insurance companies -- have traditionally been more generous than European health-care services in paying for new drugs. Even so, Hartford, Conn.-based insurer Aetna Inc. is exploring pay-for-performance deals with drug makers..."
Much is made about a government-run systems ability to unilaterally negotiate a price and therefore drive the cost down.
However, it has been my observation that in many European systems what they really do is go to the drug company and tell them straight out if you don't drop the price you will not be on our list. They pit one vendor against the other. Isn't that what we want the U.S. government to do when it comes to buying airplanes and tanks?
Is that government price controls or darn good capitalist negotiation?
Once again, when it comes to drug prices, some of these Europeans look to me to be better capitalists than we are!
Monday, October 8, 2007
Aetna to Provide Managed Care Services to the British National Health Service--Say What?
Aetna has been approved by the British National Health Service (NHS) as one of the suppliers who can provide local Primary Care Trust (PCT) managers "a wide range of support, ranging from specific tasks such as designing medical management programs, also known as demand management, to comprehensive contracting and procurement of services."
Where's Michael Moore? He needs to do an addendum to "Sicko" featuring the new Aetna network manager working with that happy British doctor he interviewed. There goes the neighborhood!
More seriously, we have talked about the "Mid-Atlantic Convergence" before. The national systems that use global budgets have been coming our way for some time as they look to implement many of the managed care techniques we have been using for years--Germany's implementation of DRGs in recent years, for example.
Don't leap to the conclusion that I am arguing that this proves the private market is the only way to manage health care costs. I have long believed that we will see America's health care system move in the direction of Europe just as they move toward us--the "Mid-Atlantic Convergence." It turns out that neither global budgets nor the private market, by themselves, have been able to get it done.
Previous post: "Mid-Atlantic Convergence"--The European Government-Run Health Care Systems Are Coming Our Way!
Aetna Press Release
Where's Michael Moore? He needs to do an addendum to "Sicko" featuring the new Aetna network manager working with that happy British doctor he interviewed. There goes the neighborhood!
More seriously, we have talked about the "Mid-Atlantic Convergence" before. The national systems that use global budgets have been coming our way for some time as they look to implement many of the managed care techniques we have been using for years--Germany's implementation of DRGs in recent years, for example.
Don't leap to the conclusion that I am arguing that this proves the private market is the only way to manage health care costs. I have long believed that we will see America's health care system move in the direction of Europe just as they move toward us--the "Mid-Atlantic Convergence." It turns out that neither global budgets nor the private market, by themselves, have been able to get it done.
Previous post: "Mid-Atlantic Convergence"--The European Government-Run Health Care Systems Are Coming Our Way!
Aetna Press Release
Tuesday, July 10, 2007
The Best 39 Minutes You Can Spend Understanding the Various National Health Systems
NPR's "Fresh Air" broadcast a 39-minute interview with Jonathan Oberlander, a political scientist with expertise in health care politics and policy and the University of North Carolina at Chapel Hill.
Studying other systems is important as we in America look to reform our health care system. Unfortunately, we hear many things out of context and some outright myths.
Listening to Professor Oberlander, I came away impressed that I had listened to one of the most informed and dispassionate discussions of the U.S. health care system, as well as many of the other industrialized systems we have heard about.
If you want a straight down-the-middle 39-minute tour de force of leading international health care systems, as well as our own, give it a listen.
You can access it here.
Studying other systems is important as we in America look to reform our health care system. Unfortunately, we hear many things out of context and some outright myths.
Listening to Professor Oberlander, I came away impressed that I had listened to one of the most informed and dispassionate discussions of the U.S. health care system, as well as many of the other industrialized systems we have heard about.
If you want a straight down-the-middle 39-minute tour de force of leading international health care systems, as well as our own, give it a listen.
You can access it here.
Monday, July 9, 2007
"Sicko" Revenue Wanes at the Box Office--Why Didn't "Sicko" Resonate?
The Michael Moore movie about the U.S. health care system's problems, "Sicko," had incredible press before its debut. Moore appeared on the likes of Larry King, Leno, and Letterman, and about everywhere else in the days before its premier to hype his newest critical documentary.
Last week when the movie grossed only $4.5 million (putting it in 9th place) supporters pointed out that it only opened on 441 screens. The producer said he was just opening on a few screens while the movie "got its legs." Moore's last movie, "Fahrenheit 911," had opened on twice the screens--and grossed more than five times as much at $23.9 million in its first week on its way to a $100 million take.
Wait until next week they all said.
Well next week has come and gone.
On almost twice as many screens, "Sicko grossed only $3.6 million this past weekend--still putting it in 9th place and actually reporting less revenue than it did last weekend. Per screen, its revenue fell by about 50%.
So far, about a million people have seen it with a cumulative gross of $11.5 million. On the one-hand that's a lot of people.
But as a political statement, in a country with 300 million people, that's a pretty small audience. The antithesis of Moore, Bill O'Reilly, gets an audience multiples of that every weekday night.
After all the hype and with a U.S. health care system in such a fix, why hasn't "Sicko" resonated beyond what appears to be the already converted?
There could be any number of reasons. Perhaps its perceived as focusing on the negative with no viable alternative presented to its audience--people already know what the problem is and they want solutions.
More likely the 20-something folks, that go to movies more often than the rest of us, were more interested in seeing their childhood toys come to life in "Transformers" this weekend. Heavy policy isn't exactly what a lot of people think of for summertime entertainment.
"Sicko" is also a pitch for a single-payer government-run health care system.
Maybe someday America will get to that point. But I doubt it will be anytime soon.
During the past few years here in Washington, I have noted a marked focus on the part of many long-time single-payer supporters away from the policy they may see as the best--but also one they do not see as attainable anytime soon. They seem tired of holding-out for everything and getting nothing. The result has been a focus on "more realistic" incremental progress. "Families USA" is a case in point.
To be sure, there are those, like Moore, who haven't given up on getting us to a single-payer health care system in the U.S. But they look to be more marginalized at the moment than gaining traction. The presidential campaign of single-payer advocate Democrat Dennis Kucinich comes to mind.
"Sicko" is a political statement full of half truths taking pot shots at a system no one can defend.
I guess the people who buy movie tickets already knew that and just didn't think it was worth ten bucks.
July 16 Update: "Sicko" continues to wane. The weekend of July 13-15 Sicko grossed only $2.6 million in 756 theaters for a screen average of $3,500--the lowest of the three weeks. It has a three week gross of $15.8 million--66% of "Fahrenheit 911's" first weekend.
July 23 Update: Weekend gross of $1.9 million for 11th place with $1,701 per theater. Cumulative gross still below "F-911" first weekend at $19.4 million.
Watch the Wolf Blitzer interview with Michael Moore as Moore goes after CNN for trashing his movie.
Earlier post: A Review of the Movie "Sicko"--Michael Moore Blew It!
Last week when the movie grossed only $4.5 million (putting it in 9th place) supporters pointed out that it only opened on 441 screens. The producer said he was just opening on a few screens while the movie "got its legs." Moore's last movie, "Fahrenheit 911," had opened on twice the screens--and grossed more than five times as much at $23.9 million in its first week on its way to a $100 million take.
Wait until next week they all said.
Well next week has come and gone.
On almost twice as many screens, "Sicko grossed only $3.6 million this past weekend--still putting it in 9th place and actually reporting less revenue than it did last weekend. Per screen, its revenue fell by about 50%.
So far, about a million people have seen it with a cumulative gross of $11.5 million. On the one-hand that's a lot of people.
But as a political statement, in a country with 300 million people, that's a pretty small audience. The antithesis of Moore, Bill O'Reilly, gets an audience multiples of that every weekday night.
After all the hype and with a U.S. health care system in such a fix, why hasn't "Sicko" resonated beyond what appears to be the already converted?
There could be any number of reasons. Perhaps its perceived as focusing on the negative with no viable alternative presented to its audience--people already know what the problem is and they want solutions.
More likely the 20-something folks, that go to movies more often than the rest of us, were more interested in seeing their childhood toys come to life in "Transformers" this weekend. Heavy policy isn't exactly what a lot of people think of for summertime entertainment.
"Sicko" is also a pitch for a single-payer government-run health care system.
Maybe someday America will get to that point. But I doubt it will be anytime soon.
During the past few years here in Washington, I have noted a marked focus on the part of many long-time single-payer supporters away from the policy they may see as the best--but also one they do not see as attainable anytime soon. They seem tired of holding-out for everything and getting nothing. The result has been a focus on "more realistic" incremental progress. "Families USA" is a case in point.
To be sure, there are those, like Moore, who haven't given up on getting us to a single-payer health care system in the U.S. But they look to be more marginalized at the moment than gaining traction. The presidential campaign of single-payer advocate Democrat Dennis Kucinich comes to mind.
"Sicko" is a political statement full of half truths taking pot shots at a system no one can defend.
I guess the people who buy movie tickets already knew that and just didn't think it was worth ten bucks.
July 16 Update: "Sicko" continues to wane. The weekend of July 13-15 Sicko grossed only $2.6 million in 756 theaters for a screen average of $3,500--the lowest of the three weeks. It has a three week gross of $15.8 million--66% of "Fahrenheit 911's" first weekend.
July 23 Update: Weekend gross of $1.9 million for 11th place with $1,701 per theater. Cumulative gross still below "F-911" first weekend at $19.4 million.
Watch the Wolf Blitzer interview with Michael Moore as Moore goes after CNN for trashing his movie.
Earlier post: A Review of the Movie "Sicko"--Michael Moore Blew It!
Tuesday, July 3, 2007
The Market Has a Place in Health Care But It Also Has Its Limits
Every leading health care proposal today includes a place for the market. Some believe government should run it all and then there are those who believe the real solution lies in just letting an unfettered market get it all done.
Health care is not like buying a set of tires. We lose our market-driven objectivity pretty quickly when we are faced with scary medical decisions for ourselves or for someone in our family.
The notion that if you just let an insurance plan rate consumers for their risks, with no rules, is market simplicity taken to the ridiculous.
Two Cato authors recently proposed just letting the market take its course:
"If companies [insurers] can charge more to cover people who are likely to need more care — smokers, the elderly, etc. — then it won't make any difference who does or doesn't buy insurance."
Two of my good friends, Joe Paduda and Richard Eskow, both highly familiar with the advantages and disadvantages of the marketplace quickly pointed out the deficiencies in such a unilateral approach.
From Joe's recent post:
"One of the more puzzling arguments against universal coverage is that advanced by the worthies at the Cato Institute. They argue that if insurance companies could just charge people based on their risk profile, the market would solve the problem of coverage."
This from Richard's recent post:
"The Invisible Hand does many wonderful things, but the notion of the free market as a Universal Solution Machine is closer to theology than it is to economics. The United States has the most deregulated and privatized health system of any OECD country, and we also lag in virtually all major health measures. Don’t think there’s a correlation? Then you have an argument to prove. The Cato authors don’t succeed."
Joe's full post: 'Free markets' in health insurance just don't work
Richard's full post: Daydream Believers: Libertarians and Healthcare
If it's raining where you are this 4th of July, their posts are worth a read.
Have a safe and fun holiday.
My take on the right mix of government and private markets: There is a Health Care Reform Plan That Doesn't Duck the Big Issues--and More Than 100 Heavyweight Stakeholders Support It!
Health care is not like buying a set of tires. We lose our market-driven objectivity pretty quickly when we are faced with scary medical decisions for ourselves or for someone in our family.
The notion that if you just let an insurance plan rate consumers for their risks, with no rules, is market simplicity taken to the ridiculous.
Two Cato authors recently proposed just letting the market take its course:
"If companies [insurers] can charge more to cover people who are likely to need more care — smokers, the elderly, etc. — then it won't make any difference who does or doesn't buy insurance."
Two of my good friends, Joe Paduda and Richard Eskow, both highly familiar with the advantages and disadvantages of the marketplace quickly pointed out the deficiencies in such a unilateral approach.
From Joe's recent post:
"One of the more puzzling arguments against universal coverage is that advanced by the worthies at the Cato Institute. They argue that if insurance companies could just charge people based on their risk profile, the market would solve the problem of coverage."
This from Richard's recent post:
"The Invisible Hand does many wonderful things, but the notion of the free market as a Universal Solution Machine is closer to theology than it is to economics. The United States has the most deregulated and privatized health system of any OECD country, and we also lag in virtually all major health measures. Don’t think there’s a correlation? Then you have an argument to prove. The Cato authors don’t succeed."
Joe's full post: 'Free markets' in health insurance just don't work
Richard's full post: Daydream Believers: Libertarians and Healthcare
If it's raining where you are this 4th of July, their posts are worth a read.
Have a safe and fun holiday.
My take on the right mix of government and private markets: There is a Health Care Reform Plan That Doesn't Duck the Big Issues--and More Than 100 Heavyweight Stakeholders Support It!
Tuesday, June 26, 2007
"Mid-Atlantic Convergence"--The European Government-Run Health Care Systems Are Coming Our Way!
One of the themes I have often heard in international meetings on the topic of health insurance is the term, "Mid-Atlantic Convergence."
That is, our system may be gravitating to look more like those in Europe and theirs maybe moving more toward ours.
One of the people I often see at these meetings is Bill Boyles, publisher of Health Market Survey and Consumer-Driven Care.
Today, I have asked Bill to weigh in with his observations on the ongoing evolution in Europe and in other systems:
Worldwide Expansion Of Private Insurance, Not Single-Payer
by Bill Boyles
I have been studying the private health insurance (PHI) markets worldwide for about two years in preparation for a new publication I am doing on the subject. My original assumption, based on conventional wisdom in the U.S., was that PHI is declining worldwide due to unaffordable costs. What I found out is actually happening is instructive for those calling for government control.
I never really worry any more when I read about Sicko or the Massachusetts single-payer crowd. As I look around the world it is obvious that dozens of countries have come to the conclusion – independently – that private health insurance beats a public utility model.
Out of approximately 100 organized health systems worldwide, I have not yet come across a single one that is moving to a public-utility model or an all-public financing system. China is a good example: it is now debating which way to go because it has tremendous needs in a rural population but clearly prefers a private insurance system in it’s newly-prosperous cities. While this is being debate, private insurance is growing anyway by millions of members every year.
Private health insurance is fantastic for economic growth. It creates national wealth by building an infrastructure of hospitals, physicians, labs, and technology, boosting GDP and per capita income across the board and generating tax receipts and foreign trade.
This is really the lesson here: private insurance is a great economic stimulant – and in the case of the U.S. system this is too much of a good thing. We need to scale back the entire system because it is overcapitalized and bloated, unlike a new PHI system in China or India.
What is happening is that countries with private health insurance systems like most western European countries are moving to adopt U.S. private insurance management techniques like pay-for-performance, DRGs, price transparency, and even cost-sharing. The overriding goal is clear: they want to retain their universal coverage by keeping private insurance affordable.
Meanwhile, in dozens of emerging economies from Eastern and Central Europe to Latin America to Asia there is a rise in per capita income – driving demand for private health insurance. We estimate that there will be an increase in PHI worldwide enrollment of greater than 100 million covered lives in just the next five years. Meanwhile, Columbia and a dozen other countries have in just the past year converted their public-utility model health financing systems into private insurance markets with more announcements each week (I keep a list).
The U.K. is often cited as an example of where the U.S. does not want to go. I have news for all you critics: the U.K. is moving rapidly in our direction. I was shocked to learn that there will be no more waiting lists by mid-2008 following a major infusion of government funds combined with expansion of the private sector, resulting in a recent estimate of 11% of all encounters to private practice and a growth in private insurance (held by 40% of all U.K. workers).
The real question across the world health systems for the future is the balance between PHI and public funding of programs for the low-income population, seniors, and high-risk cases. If that sounds familiar it’s because that is exactly how the U.S. structures its approach, and represents a good starting point for emerging health systems looking for the right balance.
That is, our system may be gravitating to look more like those in Europe and theirs maybe moving more toward ours.
One of the people I often see at these meetings is Bill Boyles, publisher of Health Market Survey and Consumer-Driven Care.
Today, I have asked Bill to weigh in with his observations on the ongoing evolution in Europe and in other systems:
Worldwide Expansion Of Private Insurance, Not Single-Payer
by Bill Boyles
I have been studying the private health insurance (PHI) markets worldwide for about two years in preparation for a new publication I am doing on the subject. My original assumption, based on conventional wisdom in the U.S., was that PHI is declining worldwide due to unaffordable costs. What I found out is actually happening is instructive for those calling for government control.
I never really worry any more when I read about Sicko or the Massachusetts single-payer crowd. As I look around the world it is obvious that dozens of countries have come to the conclusion – independently – that private health insurance beats a public utility model.
Out of approximately 100 organized health systems worldwide, I have not yet come across a single one that is moving to a public-utility model or an all-public financing system. China is a good example: it is now debating which way to go because it has tremendous needs in a rural population but clearly prefers a private insurance system in it’s newly-prosperous cities. While this is being debate, private insurance is growing anyway by millions of members every year.
Private health insurance is fantastic for economic growth. It creates national wealth by building an infrastructure of hospitals, physicians, labs, and technology, boosting GDP and per capita income across the board and generating tax receipts and foreign trade.
This is really the lesson here: private insurance is a great economic stimulant – and in the case of the U.S. system this is too much of a good thing. We need to scale back the entire system because it is overcapitalized and bloated, unlike a new PHI system in China or India.
What is happening is that countries with private health insurance systems like most western European countries are moving to adopt U.S. private insurance management techniques like pay-for-performance, DRGs, price transparency, and even cost-sharing. The overriding goal is clear: they want to retain their universal coverage by keeping private insurance affordable.
Meanwhile, in dozens of emerging economies from Eastern and Central Europe to Latin America to Asia there is a rise in per capita income – driving demand for private health insurance. We estimate that there will be an increase in PHI worldwide enrollment of greater than 100 million covered lives in just the next five years. Meanwhile, Columbia and a dozen other countries have in just the past year converted their public-utility model health financing systems into private insurance markets with more announcements each week (I keep a list).
The U.K. is often cited as an example of where the U.S. does not want to go. I have news for all you critics: the U.K. is moving rapidly in our direction. I was shocked to learn that there will be no more waiting lists by mid-2008 following a major infusion of government funds combined with expansion of the private sector, resulting in a recent estimate of 11% of all encounters to private practice and a growth in private insurance (held by 40% of all U.K. workers).
The real question across the world health systems for the future is the balance between PHI and public funding of programs for the low-income population, seniors, and high-risk cases. If that sounds familiar it’s because that is exactly how the U.S. structures its approach, and represents a good starting point for emerging health systems looking for the right balance.
Monday, June 25, 2007
The Cost to Administer Medicare Versus the Cost to Administer Private Health Plans--The Difference Isn't Anything Close to 25%
Those that favor a single-payer government-run health care system have been reenergized by the Michael Moore movie, "Sicko."
One of their contentions I keep hearing is that we could save 25% by getting rid of private health insurance plans and creating one big government-run plan. They point to Medicare's expense factor of 2.9% as evidence.
The private health insurance plans have much higher expense factors.
But, like so many things in health care, it isn't so simple--or simplistic as I keep saying about this movie.
There are a number of other considerations:
The first quarter 2007 earning's reports from the HMOs included the following:
Wellpoint and United each paid taxes equal to about 3% of their revenue in the first quarter of 2007 (that's 3% of revenue not profit).
So, Medicare's real expense ratio is a lot closer to 10% than 3%.
The big HMOs have expense, tax, and profit ratios of about 17%. But, take 3 points from that because it was income taxes paid to the government--meaning their net cost is around 14%. Apples to apples, Humana paid out 89.3% of its senior revenue on benefits leaving 10.7% of expenses, taxes, and profits. Give them credit for taxes and who's out front now?
But what about that poor doctor's office today having to administer so many plans adding lots of expenses. True, one government plan would be a lot easier. But how much easier? You might have only one plan if the government took over but you would still have the same number of patients all with their unique needs and problems. And, would Medicare just be able to write checks if it were the only payer? Not likely. Medicare would be in the managed care business with all its bureaucracy before too long.
Maybe the private sector does cost more but could we please knock off this, "It costs 25% more" junk science.
The single-payer folks would do well to read more than the headline in an HMO earnings report.
A public/private system like ours will cost more than a single government-run system. But the difference in expenses is not so great that it should preclude our consideration for the advantages of private options.
One of their contentions I keep hearing is that we could save 25% by getting rid of private health insurance plans and creating one big government-run plan. They point to Medicare's expense factor of 2.9% as evidence.
The private health insurance plans have much higher expense factors.
But, like so many things in health care, it isn't so simple--or simplistic as I keep saying about this movie.
There are a number of other considerations:
- Medicare's capital costs - Medicare benefits are paid from payroll taxes and general revenues. Medicare has done its share to run-up the federal debt in its 40 years. In 2004, Medicare costs comprised about 12% of federal non-interest spending. Using that factor to represent Medicare's portion of government operations, Medicare's share of government debt service costs would have been $19 billion in 2004. Adding this cost would have boosted Medicare's administrative costs to just under 10%.
- Medicare pays health care claims for seniors which tend to cost a lot more than the average claim cost for a younger person thereby distorting any comparison between under-age-65 costs and those over age-65. For example, Humana reported its first quarter 2007 medical cost ratio to be 89.3% for its senior business. That is a lot closer to the Medicare expense ratio than I would expect most favoring a single-payer system would think.
- Medicare generally uses payment strategies to control costs (it just cuts payments). While it is starting to do things like disease management, that is a very small part of what it does to control costs. If Medicare had the whole system, it wouldn't benefit from the spill-over impact of private sector programs to control waste and would have to build and operate its own on a much broader scale. That would run its cost ratio up considerably.
The first quarter 2007 earning's reports from the HMOs included the following:
- United Health reported a medical cost ratio of 82.7%--which means 17.3% was spent on expenses, taxes, and profit for all of its businesses including commercial, Medicare, and Medicaid.
- Wellpoint's medical cost ratio was 83.1% in the first quarter of 2007 for all of its health care businesses--commercial and government. That leaves 16.9% for expenses, taxes, and profit.
Wellpoint and United each paid taxes equal to about 3% of their revenue in the first quarter of 2007 (that's 3% of revenue not profit).
So, Medicare's real expense ratio is a lot closer to 10% than 3%.
The big HMOs have expense, tax, and profit ratios of about 17%. But, take 3 points from that because it was income taxes paid to the government--meaning their net cost is around 14%. Apples to apples, Humana paid out 89.3% of its senior revenue on benefits leaving 10.7% of expenses, taxes, and profits. Give them credit for taxes and who's out front now?
But what about that poor doctor's office today having to administer so many plans adding lots of expenses. True, one government plan would be a lot easier. But how much easier? You might have only one plan if the government took over but you would still have the same number of patients all with their unique needs and problems. And, would Medicare just be able to write checks if it were the only payer? Not likely. Medicare would be in the managed care business with all its bureaucracy before too long.
Maybe the private sector does cost more but could we please knock off this, "It costs 25% more" junk science.
The single-payer folks would do well to read more than the headline in an HMO earnings report.
A public/private system like ours will cost more than a single government-run system. But the difference in expenses is not so great that it should preclude our consideration for the advantages of private options.
A Canadian-Style Health Care System--How Would We Get From Here to There?
The movie "Sicko" inevitably gets us talking about making over America's health care system into one that would resemble the single-payer government-run systems like those in Canada, Britain, France--or now even Cuba!
I find the proposal a simplistic one.
Having spent so much time in Europe and Canada working with health care policymakers and major stakeholders there, let me first tell you I have a great respect for where they are. Their systems (well maybe except Cuba) work very well for them. In fact, I have lived in Toronto and carried an OHIP card and the system worked pretty well for our family.
If the U.S. had made Medicare universal for all of our citizens in 1965, as Canada did for its people, my sense is that we'd have a very different system in the U.S. but one that worked and was far more affordable because we would have made the transition when the system was a whole lot less expensive, complex, and addicted to perverse incentives. We would also have a lot less medical technology and knowledge throughout the world today. We probably wouldn't know what we were missing.
In 1965, the U.S. likely (and unwittingly) traded universal and much more affordable care for a system that has subsidized a disproportionate amount of the rest of the world's health care breakthroughs during the last 40 years.
But that is all a hypothetical discussion.
A big problem I have with those who now advocate moving to a single-payer system is how really poorly thought-out their proposal is. Proponents seem to presume that you can get from Point A to Point B in one easy move.
The problem is that since 1965 those who operate in the the U.S. health care system have become something akin to drug addicts--they are addicted to all the incentives we have--good, bad, and perverse.
The huge question now is how do you get the health care players cured of these incentive addictions and onto an efficient course.
Today, the U.S. health care system is like three big rigs on the highway, one each representing patient, provider, and payer expectations, nose to nose traveling down the interstate, their speed out of control at 80 mph, with no effective traffic cop keeping them under control. On a date certain, we make it all look like Canada. The result would be tantamount to all of those big rigs simultaneously having to lock-up the breaks because they would have to slow so dramatically.
You can’t just jam on the breaks and pretend the system can be quickly remade. It’s going to be a whole lot more complex than that.
Instead of hearing from single-payer advocates that this is the system we should adopt (and all of our problems will magically go away on a date certain), I'd like to see them give us a plan for how we will actually transform the health care system to one that is entirely under a government framework of controls.
How will doctors and hospitals respond to much lower payments ? The biggest difference between the U.S. and Canada/the EU is the health care provider prices?
How will we drive the existing excess health care infrastructure down to a sustainable level?
How will the politicians deal with patient expectations that are today open-ended and will have to be much more aggressively managed?
If the government runs it, it is by definition a political health care system. Do you think some of the most powerful political constituencies in the U.S. (doctors, hospitals, drug companies) are just going to sit idly by and magically behave themselves? How will a political system suddenly kick in and do what it can't do today--not be dominated by these powerful interests? Which politician is going to say "no" to the patient/voter?
Don't just give me the simplistic, "It's all in the expense overhead." Ya, but expense savings are one-time. The much bigger problem is the underlying and fundamental growth in health care costs. That's the big one and it relates to the above questions.
Tell me what the transition plan looks like and be realistic about how you get there.
Tell me how you politicize the entire U.S. health care system and the stakeholders just go along selflessly taking far less--perhaps humming the "Internationale."
You might want to go out on the Interstate this afternoon, get the car up to 80 in heavy traffic, and slam on the brakes--that would be good practice for what you are proposing.
A Review of the Movie "Sicko"--Michael Moore Blew It!
The Cost to Administer Medicare Versus the Cost to Administer Private Health Plans--The Difference Isn't Anything Close to 25%
There is a Health Care Reform Plan That Doesn't Duck the Big Issues--and More Than 100 Heavyweight Stakeholders Support It!
I find the proposal a simplistic one.
Having spent so much time in Europe and Canada working with health care policymakers and major stakeholders there, let me first tell you I have a great respect for where they are. Their systems (well maybe except Cuba) work very well for them. In fact, I have lived in Toronto and carried an OHIP card and the system worked pretty well for our family.
If the U.S. had made Medicare universal for all of our citizens in 1965, as Canada did for its people, my sense is that we'd have a very different system in the U.S. but one that worked and was far more affordable because we would have made the transition when the system was a whole lot less expensive, complex, and addicted to perverse incentives. We would also have a lot less medical technology and knowledge throughout the world today. We probably wouldn't know what we were missing.
In 1965, the U.S. likely (and unwittingly) traded universal and much more affordable care for a system that has subsidized a disproportionate amount of the rest of the world's health care breakthroughs during the last 40 years.
But that is all a hypothetical discussion.
A big problem I have with those who now advocate moving to a single-payer system is how really poorly thought-out their proposal is. Proponents seem to presume that you can get from Point A to Point B in one easy move.
The problem is that since 1965 those who operate in the the U.S. health care system have become something akin to drug addicts--they are addicted to all the incentives we have--good, bad, and perverse.
The huge question now is how do you get the health care players cured of these incentive addictions and onto an efficient course.
Today, the U.S. health care system is like three big rigs on the highway, one each representing patient, provider, and payer expectations, nose to nose traveling down the interstate, their speed out of control at 80 mph, with no effective traffic cop keeping them under control. On a date certain, we make it all look like Canada. The result would be tantamount to all of those big rigs simultaneously having to lock-up the breaks because they would have to slow so dramatically.
You can’t just jam on the breaks and pretend the system can be quickly remade. It’s going to be a whole lot more complex than that.
Instead of hearing from single-payer advocates that this is the system we should adopt (and all of our problems will magically go away on a date certain), I'd like to see them give us a plan for how we will actually transform the health care system to one that is entirely under a government framework of controls.
How will doctors and hospitals respond to much lower payments ? The biggest difference between the U.S. and Canada/the EU is the health care provider prices?
How will we drive the existing excess health care infrastructure down to a sustainable level?
How will the politicians deal with patient expectations that are today open-ended and will have to be much more aggressively managed?
If the government runs it, it is by definition a political health care system. Do you think some of the most powerful political constituencies in the U.S. (doctors, hospitals, drug companies) are just going to sit idly by and magically behave themselves? How will a political system suddenly kick in and do what it can't do today--not be dominated by these powerful interests? Which politician is going to say "no" to the patient/voter?
Don't just give me the simplistic, "It's all in the expense overhead." Ya, but expense savings are one-time. The much bigger problem is the underlying and fundamental growth in health care costs. That's the big one and it relates to the above questions.
Tell me what the transition plan looks like and be realistic about how you get there.
Tell me how you politicize the entire U.S. health care system and the stakeholders just go along selflessly taking far less--perhaps humming the "Internationale."
You might want to go out on the Interstate this afternoon, get the car up to 80 in heavy traffic, and slam on the brakes--that would be good practice for what you are proposing.
A Review of the Movie "Sicko"--Michael Moore Blew It!
The Cost to Administer Medicare Versus the Cost to Administer Private Health Plans--The Difference Isn't Anything Close to 25%
There is a Health Care Reform Plan That Doesn't Duck the Big Issues--and More Than 100 Heavyweight Stakeholders Support It!
A Review of the Movie "Sicko"--Michael Moore Blew It!
Michael Moore's new movie, "Sicko," was supposed to be this great argument for a "single payer" government-run health care system.
It turned out to be exactly the opposite because Moore overplayed his hand and did his argument more damage than good.
The first half of the movie would have had anyone mad at the system--and for good reasons. It's real easy to find lots of examples of market stupidity in the way health care is delivered and he found some doozies.
It's also easy to find some examples of government-run stupidity in health care and he conveniently avoided those.
He highlights a case of our system denying a husband and father an end-of-life bone marrow transplant--denied not by a big insurance company but local plan trustees. He forgets to tell us that kind of end-of-life spending would never even be considered in Canada, Britain, or France. He doesn't think the U.S government-run Medicare system denies coverage?
He highlights the British system but never mentions that 12.5% of Brits have opted out of it and into private health insurance--most through employer provided benefits for the higher paid.
In politics, the battle is always over the middle. Those on the left will always be on the left. Those on the right will always be on the right. National elections, and national issues, are always decided by those folks who occupy the middle. They were the ones who elected Ronald Reagan and those same people elected Bill Clinton.
They will also be the ones that finally make health care reform a political imperative.
Michael Moore's adept movie making likely had those middle folks real mad at the largely market-based U.S health care system--for about the first hour.
Then, I think he lost them as they laughed at the foolishness of the French health care system and the notion that we had something to learn from Cuba.
Instead of going for the close he got off on a far left tangent highlighting a guy who left America and went home to France to get Cancer treatment. So far, a good argument for the French system. But then, when the treatments had ended, he showed the guy going to his doctor to get a prescription for three months off at full pay so he could go hang-out on the Riviera. He bragged about the French system's willingness to send a maid over to do the laundry for a new mother. All apparently common under the French system.
Later he went to Cuba and argued that their system, which he says spends less than $300 per citizen per year on health care and he says rates below ours, is a health care model for us to learn from. Arguing that a country, whose citizens risk their lives to get to Key West and which confiscates private property to function, is a model for us to learn from isn't a theme likely to play well with "Joe and Mary Middle America."
It's no surprise that the leading Democratic presidential candidates are not interested in getting too close to this thing.
But "Sicko" will help the Democrats.
In the end, Michael Moore is so far out on the extreme left that what he does accomplish is to make Hillary Clinton, Barack Obama, and John Edwards look like middle of the road health care reformers with their incremental health reform plans.
That's why I won't be surprised when Hollywood puts "Sicko" on network television in the days just before the 2008 presidential election.
My earlier post on "Sicko": "Sicko"--Hate it All You Like But Don't Ignore It! The Best Response is to Satisfy the Customer!
My earlier post on dumb things insurance companies do to unnecessarily make their customers mad: California Fines Wellpoint $1 Million for "Unfairly" Rescinding Health Insurance Polices--Was Wellpoint Fair or Not?
It turned out to be exactly the opposite because Moore overplayed his hand and did his argument more damage than good.
The first half of the movie would have had anyone mad at the system--and for good reasons. It's real easy to find lots of examples of market stupidity in the way health care is delivered and he found some doozies.
It's also easy to find some examples of government-run stupidity in health care and he conveniently avoided those.
He highlights a case of our system denying a husband and father an end-of-life bone marrow transplant--denied not by a big insurance company but local plan trustees. He forgets to tell us that kind of end-of-life spending would never even be considered in Canada, Britain, or France. He doesn't think the U.S government-run Medicare system denies coverage?
He highlights the British system but never mentions that 12.5% of Brits have opted out of it and into private health insurance--most through employer provided benefits for the higher paid.
In politics, the battle is always over the middle. Those on the left will always be on the left. Those on the right will always be on the right. National elections, and national issues, are always decided by those folks who occupy the middle. They were the ones who elected Ronald Reagan and those same people elected Bill Clinton.
They will also be the ones that finally make health care reform a political imperative.
Michael Moore's adept movie making likely had those middle folks real mad at the largely market-based U.S health care system--for about the first hour.
Then, I think he lost them as they laughed at the foolishness of the French health care system and the notion that we had something to learn from Cuba.
Instead of going for the close he got off on a far left tangent highlighting a guy who left America and went home to France to get Cancer treatment. So far, a good argument for the French system. But then, when the treatments had ended, he showed the guy going to his doctor to get a prescription for three months off at full pay so he could go hang-out on the Riviera. He bragged about the French system's willingness to send a maid over to do the laundry for a new mother. All apparently common under the French system.
Later he went to Cuba and argued that their system, which he says spends less than $300 per citizen per year on health care and he says rates below ours, is a health care model for us to learn from. Arguing that a country, whose citizens risk their lives to get to Key West and which confiscates private property to function, is a model for us to learn from isn't a theme likely to play well with "Joe and Mary Middle America."
It's no surprise that the leading Democratic presidential candidates are not interested in getting too close to this thing.
But "Sicko" will help the Democrats.
In the end, Michael Moore is so far out on the extreme left that what he does accomplish is to make Hillary Clinton, Barack Obama, and John Edwards look like middle of the road health care reformers with their incremental health reform plans.
That's why I won't be surprised when Hollywood puts "Sicko" on network television in the days just before the 2008 presidential election.
My earlier post on "Sicko": "Sicko"--Hate it All You Like But Don't Ignore It! The Best Response is to Satisfy the Customer!
My earlier post on dumb things insurance companies do to unnecessarily make their customers mad: California Fines Wellpoint $1 Million for "Unfairly" Rescinding Health Insurance Polices--Was Wellpoint Fair or Not?
Subscribe to:
Posts (Atom)
