Economic Pros & Cons of US UHC

[uk_dave]

We'll start with the cons, because the only items I can think of are:

1. A perceived increase in taxation to pay for it.

Of course, if you don't have to pay for expensive private medical insurance or your employer doesn't have to pay it on your behalf and can pass that money on to you as a part of your wages, it may well be possible that it will cost you no more if not less than it does right now.

2. A reduction in income for tv companies and advertising companies as hospitals will no longer need to attract patients on the basis of how nice their rooms are.

3. Job losses as people whose only function is to screen out those who cannot afford health care are no longer needed.

Pros:

1. Fewer personal bankruptcies from unpaid medical bills

2. More even distribution of the cost of health care so that those insured and those with personal wealth don't end up paying more for their own health care to cover for the loss of income the hospitals suffer from when a recipient cannot pay.

Of course one may argue that this is effectively what happens under UHC, but even tax payers in the US currently don't have insurance or the savings to pay for expensive treatments, so the cost of UHC is spread over all taxpayers, not just those who can currently afford health care.

3. Freer movement of labour - employees don't have to stay in a job because it gives them health care coverage which may not be available with another employer. Similarly, more people will take the chance of starting their own businesses if health care provision isn't going to be a huge extra cost for themselves and for their employees.

4. Economies of scale within the sector enabling a reduction in costs of drugs and equipment

Thoughts? (Rational ones appreciated)

 

[Matthew Best]

Thoughts?

Do you hate America because you're a Communist, or is there some other reason?

 

[gumboot]

I find it funny that the US Government provides healthcare to the people of Iraq and Afghanistan, but not its own citizens.

 

[Rolfe]

There is surely a limit to the percentage of GDP that can be spent on healthcare without appreciable return for the money. The USA is currently spending about 16% of GDP, and the health outcomes it's getting as a society for that are no better across the board than the outcomes achieved by countries spending half that.

Where is all this money - about 8% of GDP and that is not pocket change - actually going? It seems mainly to be about pushing paper around. Authorisations and denials and detailed billing and quibbles about the billing. Advertising of hospitals and insurance companies. Processing applications. Counselling those who have received bills which are bigger than their total net worth and trying to find some way to get the bill down and/or a means to pay on the never-never. Huge monolithic insurance companies with luxurious HQs and private jets and gold-plated cutlery and CEOs with salaries in the millions - all to push paper around.

It's unproductive work. Everyone from the aforementioned CEO to the humble secretary employed by the doctor to handle the insurance paperwork are parasites on the system. Sure, every system needs administrators, but the administration overheads of the US healthcare system dwarf the actual productive work. We like to criticise the NHS as inefficient, and mutter darkly about overpaid administrators. And there's some truth in that. But it's a model of efficiency compared to what goes on in the USA.

General Motors spends more on providing health insurance for its workforce than it does on steel. Various companies have complained that they can't compete with similar companies in Canada because the Canadian companies don't have the ball and chain of employee health insurance round their ankles. Many Americans tell of severely restricted life choices (especially in employment) due to the necessity for finding healthcare coverage. This includes finding and keeping a job they loathe, and probably won't do all that well, so long as it provides healthcare coverage, and people being deterred from starting up their own business.

I don't see how the country can go on spending all this money and getting nothing for it, in the present economic climate. But on the other hand I don't see how they can change, given the blind ideology exhibitied by people who don't want to change.

Rolfe.

 

[eeyore1954]

There is surely a limit to the percentage of GDP that can be spent on healthcare without appreciable return for the money. The USA is currently spending about 16% of GDP, and the health outcomes it's getting as a society for that are no better across the board than the outcomes achieved by countries spending half that.

Where is all this money - about 8% of GDP and that is not pocket change - actually going? It seems mainly to be about pushing paper around. Authorisations and denials and detailed billing and quibbles about the billing. Advertising of hospitals and insurance companies. Processing applications. Counselling those who have received bills which are bigger than their total net worth and trying to find some way to get the bill down and/or a means to pay on the never-never. Huge monolithic insurance companies with luxurious HQs and private jets and gold-plated cutlery and CEOs with salaries in the millions - all to push paper around.

It's unproductive work. Everyone from the aforementioned CEO to the humble secretary employed by the doctor to handle the insurance paperwork are parasites on the system. Sure, every system needs administrators, but the administration overheads of the US healthcare system dwarf the actual productive work. We like to criticise the NHS as inefficient, and mutter darkly about overpaid administrators. And there's some truth in that. But it's a model of efficiency compared to what goes on in the USA.

General Motors spends more on providing health insurance for its workforce than it does on steel. Various companies have complained that they can't compete with similar companies in Canada because the Canadian companies don't have the ball and chain of employee health insurance round their ankles. Many Americans tell of severely restricted life choices (especially in employment) due to the necessity for finding healthcare coverage. This includes finding and keeping a job they loathe, and probably won't do all that well, so long as it provides healthcare coverage, and people being deterred from starting up their own business.

I don't see how the country can go on spending all this money and getting nothing for it, in the present economic climate. But on the other hand I don't see how they can change, given the blind ideology exhibitied by people who don't want to change.

Rolfe.

Do you have any statistics on much much of that total health care bill is from pushing paper around?

 

[Rolfe]

You'll find different figures depending on your source. This is because pushing paper around is surprisingly difficult to define. Many sources seem to class money as being spent on patient care if it pays a doctor's bill, without quantifying how much of that bill is to cover the paperwork the doctor is being made to handle, for example.

Rolfe.

 

[Biscuit]

Do you have any statistics on much much of that total health care bill is from pushing paper around?

The United States spends roughly six times the OECD average on public spending on administration and insurance per public life covered.35 In the United States, average administrative costs account for an estimated 6 percent of public health spending, compared with an average of 4 percent for the OECD countries.

Sales and marketing alone account for 1/3 of this cost. Compare this 6% of our total healthcare costs to the .5% that are due to litigation. Its a 6% that doesn't make any sense. It doesn't improve or expand care.

from here

Actually does a great job of showing how, even adjusted for wealth, American's are getting a raw deal even if you have insurance.

 

[lomiller]

Do you have any statistics on much much of that total health care bill is from pushing paper around?

http://www.nejm.org/doi/full/10.1056/NEJMsa022033

In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada.

 

[Rolfe]

I honestly think these figures are underestimates, due to some of the admin costs not being easy (or even possible) to tease out of the accounts.

Rolfe.

 

[eeyore1954]

Thank you for the info.

 

[jnelso99]

3. Job losses as people whose only function is to screen out those who cannot afford do not deserve health care are no longer needed.

Ftfy

 

[citizenzen]

Ftfy

Who "do[es] not deserve" health care?

Please explain.

 

[Rolfe]

I think that was by way of being ironic....

Actually it's an interesting point. It costs far more to prevent certain people from getting the treatment they need, than it would cost simply to treat them, no questions asked. Once you have realised that, you have to re-classify these people as not deserving to live, to make any sense at all of the situation.

Rolfe.

 

[Ohmer]

We'll start with the cons, because the only items I can think of are:
1. A perceived increase in taxation to pay for it.

I did the math for myself. If I did not have to pay for health insurance I could absorb an 80% increase in my federal income tax.

 

[Malcolm Kirkpatrick]

It costs far more to prevent certain people from getting the treatment they need, than it would cost simply to treat them, no questions asked. Once you have realised that, you have to re-classify these people as not deserving to live, to make any sense at all of the situation.

If only there existed a treatment for certainty...
Any system which treats these "certain people" has to classify them before treatment or else has to treat everyone who walks through the door. That gets expensive.
My objection to a tax-subsidized or State (government, generally)-operated medical treatment industry is that such an assignment of responsibility to the government distracts government attention from the tasks where it obviously can make a positive contribution, suppression of competition in the extortion industry, environmental protection, and maintenence of a stable system of contract law.

 

[Biscuit]

I suppose it could be con for the insurance industry and for malpractice lawyers depending on how you set up the resolution process. I think you would have to put limits on malpractice settlements.

Then again I have never met a homeless lawyer...

 

[Rolfe]

Any system which treats these "certain people" has to classify them before treatment or else has to treat everyone who walks through the door. That gets expensive.

It's still much cheaper than what you're doing in America. In effect, the NHS treats everyone who walks through the door, so long as they're resident in Britain. Which is neither difficult nor costly to enforce.

Comparable outcomes, for half the price. Whoda thunkit?

Rolfe.

 

[mike3]

If only there existed a treatment for certainty...
Any system which treats these "certain people" has to classify them before treatment or else has to treat everyone who walks through the door. That gets expensive.
My objection to a tax-subsidized or State (government, generally)-operated medical treatment industry is that such an assignment of responsibility to the government distracts government attention from the tasks where it obviously can make a positive contribution, suppression of competition in the extortion industry, environmental protection, and maintenence of a stable system of contract law.

How do you propose to make good medical care available to those who cannot afford multi-hundred-dollar monthy insurance premiums?

 

[Malcolm Kirkpatrick]

(Rolfe): "It costs far more to prevent certain people from getting the treatment they need, than it would cost simply to treat them, no questions asked."

It's still much cheaper than what you're doing in America. In effect, the NHS treats everyone who walks through the door, so long as they're resident in Britain.¹ Which is neither difficult nor costly to enforce.² Comparable outcomes, for half the price.³

Here's my treatment for certain people:...
1. Maybe. Maybe not. In earlier threads we noted the occurance of medical tourism, where residents of countries with State "guaranteed" care travel abroad and pay out of pocket for imaging services and surgeries that are either not covered or for which there are (sometimes lethal) wait times. Where do the direct payments for such services appear in the national cost accounting?
2. Maybe. Maybe not, again. Moral hazard is a growing cost of entitlement programs.
3. Aggregate cost and aggregate longevity statistics provide only loose indicators of individual cost of services and quality of services.

 

[Malcolm Kirkpatrick]

How do you propose to make good medical care available to those who cannot afford multi-hundred-dollar monthy insurance premiums?

Broadly, the same way policymakers would promote improved performance in any industry:...
1. Promote competition between service providers.
2. Reduce anti-competitive regulations (e.g., occupational licensing requirements).
3. Reduce subsidies (e..g., tax-funded health insurance for government employees).