Thursday, March 30, 2017

US Healthcare reform

This is Joseph.

I want to highlight a couple of issues about free market health care

But in health care, the cheapest, highest-performing systems all do the same thing — they let government set prices centrally. That’s true in the UK’s absurdly inexpensive, and fully socialized, health care system; but it’s also true in the Singaporean system, which conservatives often hold up as a model. 
Hell, it’s even true in the American system! Medicare and Medicaid pay much less for health services than private insurers. That’s one reason Obamacare relied so heavily on the Medicaid expansion — Democrats couldn’t afford to subsidize private insurance for everyone who needed it, and so they turned to the cheaper insurance Medicaid offered. Even now, the part of Obamacare that needs more money is the part based on conservative ideas — the regulated marketplaces where people buy private insurance.
 Now it is true that we cannot presume all government run systems will be inexpensive and high functioning.  But it is a tough problem for the free marketeers that they are, unless price isn't also an object.

I also want to highlight a practical problem:
The loophole that makes our system the enormous clusterbang that it is results from Republicans not having the courage to back up their tough talk on people who can't afford health care. As long as the law requires Emergency Rooms to take people irrespective of ability to pay, the system we use today is guaranteed to be an expensive mess. A system that requires people to buy insurance from a for-profit insurance industry or face a penalty is going to leave some people uncovered. Those people are going to get sick and get in car accidents just like everyone else. When they do, they end up getting services they have no intention of or ability to pay for. The costs get passed on to everyone else. This is why health care in the U.S. has been such a disaster – because we treat it like an industry rather than a social service.
The logical solution is to have a single-payer system in which people don't have to go to the ER when they have the flu because it's the only service provider they have access to that can't reject them for being uninsured and poor. The alternative, though, is for the Republicans to sack up and change the law that requires ERs to take uninsured patients. If they really are committed to the idea of health care as a product, the provision of which is governed by the invisible hand, then go all the way. Tell people, "If you don't have insurance, the ER will leave you outside on the sidewalk and lock the door. Hospitals don't have to treat you anymore, even if you're comatose, until they determine what you can afford."
 This is just one more of the series of information problems that accompany private health care transactions.  The classic one is trying to get prices or estimates for the cost of medical care.  Now I strong disagree with the author above that it would ever be ethical to cut people off of emergency care, but it is a logical outcome of fully free market care.

But you also providers being unsure of just how much care a patient can afford.  Just imagine having a heart attack and having forgot one's wallet.  No care for a rapidly fatal medical condition because you can't get anyone to get your wallet to the hospital in time.  Or imagine having equity in your house but it being too long of a process to free it up to pay for cancer treatment.  To some extent a very carefully regulated insurance market can help.  But surely everyone can see how easily rescission of medical insurance could be a problem -- even the debate could make the costs moot (as the patient has expired).

Furthermore, what does a fully private market think about "self-educated" doctors?  Is not the AMA a government regulation reducing free market activity?  But who would want the system that produces incredibly proficient providers and really sets a floor on quality to go away?

These sorts of deep structural problems (high cost) and information issues (price and so forth) make the provision of fully private medical care unlikely.  Given that, the real question is what results do we want to have.  If we want inexpensive and effective than one has to look much more closely at expanding Medicare and Medicaid, which are the current options with these features.

And a more expensive system is fine, but we should own up to that and accept that we are going to spending more on health care.  And given the high levels of cost, at some level a lot of that has to be sourced from public funds.

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