Great analysis! I didn't know many of the details, of course, but some years ago when I first heard the term "single payer" I thought: You want a single payer to pay for THIS? That poor payer!
I hadn't heard the Ed Lazear story about Gosplan's use of the Sears Catalog before. I had heard something similar: Will the world revolution encompass the whole world? No. We'll leave Switzerland capitalist so we know where to set prices.
On health care I once heard [for real], maybe later 1970's, a British communist visited the Soviet Union and needed some hospital treatment. Upon his return home he was asked how the Soviet medicine establishment was. He replied: No problem! Just like the NHS.
One of my pet peeves is this "Isn't (food, shelter, job, health care, ...) a basic human right?
My brutal answer is, everyone should have the right to live by themselves in a state of nature. But if they want to live in a society built by others, they have to contribute to that society. TANSTAAFL!
The companion answer is disgust at people who have such low opinions of us, their fellow human beings, that they think we will not help the destitute, that we will let people die in the gutter, and therefore government must force people to pay taxes so the kind, benevolent, all-seeing all-knowing government can provide the charity we would be glad to provide on our own. A friend delivers food and prescriptions on his snowmobile, no charge even for gasoline, just because he wants to. It's what people have done since time immemorial. The only people who get left out of personal charity are the hermits who don't want human friends and the criminals who don't deserve it. Even the hermits would find charity if they could tolerate accepting it.
There is a certain irony as well that governments seem quite content to create situations where people are dying in gutters on a regular basis; see California's various slums.
Few would let a child near a red hot stove, yet we allow our politicians/lawyers near matters economic. We should not be surprised when terrible things happen.
I have long wondered why medical procedures have rediculous list prices and the Medicare/insurance cost is a single digit of the list price. Due to the excellent obfuscation by the providors and the government, it remains a mystery to me and many others. However, if you are hospital and your list price is a zillion dollars for a minor procedure then when you provide that minor procedure to an indigent you can claim that you have provided the community with a zillion dollars of free medical care. Also, how is it a hospital is a charity when it is run for the benefit of specialist physicians making seven-figures from that hospital?
I am a libertarian at heart, and my instincts agree with much said here. But I've never heard a fundamental question addressed. If there is not universal coverage - which does not need to mean providers - what are we do with people who chose not to pay for coverage? Unless we are willing to turn people away at the emergency room doors - "sorry, you chose not to be covered" - how does this work? If we're not prepared to allow people to pass away if they chose not to buy coverage, whether subsidized or other, and most of us can't quite bring ourselves to do this, what do we do with these people? How does this work without allowing people to pass away because of their choices, whether misguided or not?
Charity will take care of people who cannot afford to pay. Naturally they won't get heart transplants unless they have an exceptional sob story, like being 5 months old. But I believe Americans will donate to good charities and good cases. The last reliable pre-COVID rankings I saw in Wikipedia were from 2016; everything later was so different from year to year that I ignored them as unreliable. The 2016 rankings by tax data put Americans at (from memory!) 1.5% of GDP, and the next closest at 1/2 or 1/3 of that. There are other rankings which seem so vague as to be useless, measuring things like self-reported "I gave to charity last year" and "I helped a stranger last year". But it's been a while since I looked at this stuff.
People who can afford to pay and choose not to are a relatively easy problem. To exaggerate, someone who chooses an around the world cruise and then tries to get a charity heart transplant will be out of luck, and unless he's the champion miser of all time, he will come to his senses and pay. But it's hard to imagine anyone like that in real life. Someone who would have to move into a smaller house, sell all but one car, and use half his savings and live a more frugal lifestyle probably would too. I don't think he'd gain a lot of public sympathy easier.
Then there's an average family but self-employed and they bought an RV and boat instead of good insurance, and even if they sell the RV and boat and downsize their house, they can't afford that heart transplant. Would a charity or the public pay the difference, say $100K? Maybe. But I don't think there'd be any huge public outcry either.
I'm sure there's some narrow band between "could have but cheap" and "instant charity", call them the "couldn't and didn't even try" people who didn't really try to help themselves, bought cheap hit-by-a-bus catastrophic insurance so they could travel a lot, party a lot, hit Vegas several times a year. Not evil meth addicts, just not the kind to plan ahead. Even if they'd had better insurance and been more frugal, they still couldn't get that heart transplant. People in their area might help, but out of state? Maybe not.
It is worth noting that one can borrow money as well for these sorts of things. It is hard today because of the astronomical cost for the decent care we get, but with lower prices it might not be much worse than say a car or home loan.
Sometimes being a pure libertarian gets in the way of 99% improvement. The government can give people a voucher to pay for simple health insurance, without the government itself having to run the insurance company (Medicare, Medicaid). The government can run free hospitals, as it has in the past. A mandate that you have to buy some minimal health insurance, because otherwise you might show up and we won't throw you in the streets can work too. But there is no reason your and my heath care and insurance needs to be so thoroughly screwed up in order to provide for poor or indigent people, or even just supremely unlucky.
Two comments - my wife had a spine procedure 6 years ago, the bills totaled $260,000. Then the “negotiated rate” was applied and it magically dropped to $56,000. Where did the missing $204,000 go? Would a person without insurance get stuck with the whole $260,000 bill? It’s all “funny money”.
The whole concept of insurance was to protect against low probability events that an individual couldn’t shoulder on their own (like one’s house burning down). And yet we seem to expect health insurance to pay for the routine costs of living like regular checkups, colds & vaccinations, or expect insurance to cover healthcare costs for the chronically ill (where losses are guaranteed - like buying fire insurance on a house that is already burning). This isn’t insurance, it’s a massively complex & inefficient tax system where the more affluent subsidize the less affluent. And by routing the routine healthcare costs through the bill insurance / deal with the rejection / get paid $0.50 on the dollar we have massively inflated costs.
Yes. Using insurance for routine care was a terrible mistake, the equivalent of using car insurance to pay for oil changes and new tires.
I was self-employed for a couple of years and am no good at it; once I start a project, I am head down until it's done, and neglect all the self-marketing to keep a steady flow of clients. But I had great medical insurance (this was around 2003?). I forget the premiums, but $200/month sounds reasonable in my memory. I paid all medical costs up to $2400 a year. We split the costs up to $3200 a year. They paid all or almost all over $3200, probably some co-pay. Nice and simple, great incentives, and it covered being hit by a bus or needing that heart transplant. Then I went back to being a wage slave, a good company, but they would not let me keep my medical plan, I had to sign up for theirs. And then Obamacare came along and plans like that vanished. If you like your doctor, you can keep your doctor, ha ha.
Reading Cannon's article, I had a reaction that I've had before. The present health regime is so poorly designed and has been for generations, that it would better to abandon it to the single payer crowd(and taking steps to make it transparent and accountable) and then enjoy the inevitable counter-revolution
Great analysis! I didn't know many of the details, of course, but some years ago when I first heard the term "single payer" I thought: You want a single payer to pay for THIS? That poor payer!
I hadn't heard the Ed Lazear story about Gosplan's use of the Sears Catalog before. I had heard something similar: Will the world revolution encompass the whole world? No. We'll leave Switzerland capitalist so we know where to set prices.
On health care I once heard [for real], maybe later 1970's, a British communist visited the Soviet Union and needed some hospital treatment. Upon his return home he was asked how the Soviet medicine establishment was. He replied: No problem! Just like the NHS.
You might want to check that link to " WSJ editorial board writes," as it appears to go to the US Health Care/Myth" site
Fixed, thanks.
One of my pet peeves is this "Isn't (food, shelter, job, health care, ...) a basic human right?
My brutal answer is, everyone should have the right to live by themselves in a state of nature. But if they want to live in a society built by others, they have to contribute to that society. TANSTAAFL!
The companion answer is disgust at people who have such low opinions of us, their fellow human beings, that they think we will not help the destitute, that we will let people die in the gutter, and therefore government must force people to pay taxes so the kind, benevolent, all-seeing all-knowing government can provide the charity we would be glad to provide on our own. A friend delivers food and prescriptions on his snowmobile, no charge even for gasoline, just because he wants to. It's what people have done since time immemorial. The only people who get left out of personal charity are the hermits who don't want human friends and the criminals who don't deserve it. Even the hermits would find charity if they could tolerate accepting it.
There is a certain irony as well that governments seem quite content to create situations where people are dying in gutters on a regular basis; see California's various slums.
Few would let a child near a red hot stove, yet we allow our politicians/lawyers near matters economic. We should not be surprised when terrible things happen.
I have long wondered why medical procedures have rediculous list prices and the Medicare/insurance cost is a single digit of the list price. Due to the excellent obfuscation by the providors and the government, it remains a mystery to me and many others. However, if you are hospital and your list price is a zillion dollars for a minor procedure then when you provide that minor procedure to an indigent you can claim that you have provided the community with a zillion dollars of free medical care. Also, how is it a hospital is a charity when it is run for the benefit of specialist physicians making seven-figures from that hospital?
The doctors aren't the ones taking it in, it's the administrators.
I am a libertarian at heart, and my instincts agree with much said here. But I've never heard a fundamental question addressed. If there is not universal coverage - which does not need to mean providers - what are we do with people who chose not to pay for coverage? Unless we are willing to turn people away at the emergency room doors - "sorry, you chose not to be covered" - how does this work? If we're not prepared to allow people to pass away if they chose not to buy coverage, whether subsidized or other, and most of us can't quite bring ourselves to do this, what do we do with these people? How does this work without allowing people to pass away because of their choices, whether misguided or not?
Charity will take care of people who cannot afford to pay. Naturally they won't get heart transplants unless they have an exceptional sob story, like being 5 months old. But I believe Americans will donate to good charities and good cases. The last reliable pre-COVID rankings I saw in Wikipedia were from 2016; everything later was so different from year to year that I ignored them as unreliable. The 2016 rankings by tax data put Americans at (from memory!) 1.5% of GDP, and the next closest at 1/2 or 1/3 of that. There are other rankings which seem so vague as to be useless, measuring things like self-reported "I gave to charity last year" and "I helped a stranger last year". But it's been a while since I looked at this stuff.
People who can afford to pay and choose not to are a relatively easy problem. To exaggerate, someone who chooses an around the world cruise and then tries to get a charity heart transplant will be out of luck, and unless he's the champion miser of all time, he will come to his senses and pay. But it's hard to imagine anyone like that in real life. Someone who would have to move into a smaller house, sell all but one car, and use half his savings and live a more frugal lifestyle probably would too. I don't think he'd gain a lot of public sympathy easier.
Then there's an average family but self-employed and they bought an RV and boat instead of good insurance, and even if they sell the RV and boat and downsize their house, they can't afford that heart transplant. Would a charity or the public pay the difference, say $100K? Maybe. But I don't think there'd be any huge public outcry either.
I'm sure there's some narrow band between "could have but cheap" and "instant charity", call them the "couldn't and didn't even try" people who didn't really try to help themselves, bought cheap hit-by-a-bus catastrophic insurance so they could travel a lot, party a lot, hit Vegas several times a year. Not evil meth addicts, just not the kind to plan ahead. Even if they'd had better insurance and been more frugal, they still couldn't get that heart transplant. People in their area might help, but out of state? Maybe not.
It is worth noting that one can borrow money as well for these sorts of things. It is hard today because of the astronomical cost for the decent care we get, but with lower prices it might not be much worse than say a car or home loan.
Sometimes being a pure libertarian gets in the way of 99% improvement. The government can give people a voucher to pay for simple health insurance, without the government itself having to run the insurance company (Medicare, Medicaid). The government can run free hospitals, as it has in the past. A mandate that you have to buy some minimal health insurance, because otherwise you might show up and we won't throw you in the streets can work too. But there is no reason your and my heath care and insurance needs to be so thoroughly screwed up in order to provide for poor or indigent people, or even just supremely unlucky.
Two comments - my wife had a spine procedure 6 years ago, the bills totaled $260,000. Then the “negotiated rate” was applied and it magically dropped to $56,000. Where did the missing $204,000 go? Would a person without insurance get stuck with the whole $260,000 bill? It’s all “funny money”.
The whole concept of insurance was to protect against low probability events that an individual couldn’t shoulder on their own (like one’s house burning down). And yet we seem to expect health insurance to pay for the routine costs of living like regular checkups, colds & vaccinations, or expect insurance to cover healthcare costs for the chronically ill (where losses are guaranteed - like buying fire insurance on a house that is already burning). This isn’t insurance, it’s a massively complex & inefficient tax system where the more affluent subsidize the less affluent. And by routing the routine healthcare costs through the bill insurance / deal with the rejection / get paid $0.50 on the dollar we have massively inflated costs.
Yes. Using insurance for routine care was a terrible mistake, the equivalent of using car insurance to pay for oil changes and new tires.
I was self-employed for a couple of years and am no good at it; once I start a project, I am head down until it's done, and neglect all the self-marketing to keep a steady flow of clients. But I had great medical insurance (this was around 2003?). I forget the premiums, but $200/month sounds reasonable in my memory. I paid all medical costs up to $2400 a year. We split the costs up to $3200 a year. They paid all or almost all over $3200, probably some co-pay. Nice and simple, great incentives, and it covered being hit by a bus or needing that heart transplant. Then I went back to being a wage slave, a good company, but they would not let me keep my medical plan, I had to sign up for theirs. And then Obamacare came along and plans like that vanished. If you like your doctor, you can keep your doctor, ha ha.
There's this recent paper in the JPE on long-term health insurance in Germany - https://www.journals.uchicago.edu/doi/10.1086/734781
Such a great post. Both political parties should read it, implement it
You are way too optimistic if you think you get$0.50 on the dollar. My estimate based on decades in the field would be more like $0.10.
Reading Cannon's article, I had a reaction that I've had before. The present health regime is so poorly designed and has been for generations, that it would better to abandon it to the single payer crowd(and taking steps to make it transparent and accountable) and then enjoy the inevitable counter-revolution