Single Payer Healthcare

[Tyler]

Short term, I expect a renewed push for a public option on the health exchanges to fill the gap left by the exiting insurers. Rates will be a little lower at first thanks to government price fixing, but will eventually go up (and/or taxes) when all of the competition is forced out and de-facto single payer takes over for the individual market. It will run big deficits while they figure things out (like how to make coverage truly mandatory while hiding the cost), but the government generally doesn't care about that kinda thing.

The insurance companies will be fine, though, as they'll continue to make huge money on corporate plans and they'll have a mutual agreement ($$$) with the politicians to leave that alone.

I don't see any way the law is outright repealed without a replacement already in place that looks a lot more like the current system than the old one. I just don't think it's politically tenable.

[curlew]

One of the companies that recently pulled out was Aetna which happens to be the company I will be switching to with my wife's employer after being forced into retirement. I just checked out their rates yesterday and found them to be surprisingly reasonable, much less than what I was actually paying before on my own employer's plan. It's no wonder they had to pull out of Obamacare to make a profit but I'm glad they did.

[WiseOne]

Agree with Tyler. You can't give people something like access to individual health insurance, and then just take it away. If the public option is a simple extension of Medicare with a premium attached, it's not necessarily the case that costs will increase. Overall health costs will actually decrease, since private insurers are a lot more expensive than Medicare. Medicare's reimbursements are lower, and administrative overhead is FAR lower. It would also end the perennial "out of network" problem, since pretty much every doctor is on CMS (Medicare/Medicaid).

The elephant in the room is pharmaceutical costs. No matter who gets into the White House, I'm pretty sure that the Bush-era law preventing CMS from negotiating drug prices, or patients getting medications internationally, is going to be axed. It's absolutely ridiculous that a medicine that costs a few dollars a month in Canada, costs over $300/month out of pocket to patients here for exactly the same medication and formulation (this is a real example).

I posted about this before, but just consider how many people are on multiple medications, and compare their pharmaceutical costs with their 3-4 $200 doctor visits a year. The drug costs dwarf everything else. They're the main reason for medical cost inflation.

[Maddy]

Agree with Tyler. You can't give people something like access to individual health insurance, and then just take it away. If the public option is a simple extension of Medicare with a premium attached, it's not necessarily the case that costs will increase. Overall health costs will actually decrease, since private insurers are a lot more expensive than Medicare. Medicare's reimbursements are lower, and administrative overhead is FAR lower. It would also end the perennial "out of network" problem, since pretty much every doctor is on CMS (Medicare/Medicaid).

The elephant in the room is pharmaceutical costs. No matter who gets into the White House, I'm pretty sure that the Bush-era law preventing CMS from negotiating drug prices, or patients getting medications internationally, is going to be axed. It's absolutely ridiculous that a medicine that costs a few dollars a month in Canada, costs over $300/month out of pocket to patients here for exactly the same medication and formulation (this is a real example).

I posted about this before, but just consider how many people are on multiple medications, and compare their pharmaceutical costs with their 3-4 $200 doctor visits a year. The drug costs dwarf everything else. They're the main reason for medical cost inflation.

I agree with WiseOne that it's the racketeering in the pharmaceutical space (she didn't use that word, but I will) that is responsible for the sky-high cost of pharmaceuticals. But the government-sanctioned monopolies that are at the heart of skyrocketing medical costs, and that would constitute an outright violation of antitrust laws in any other sector of the economy, extend far beyond just the pharmaceutical industry. Tried opening an MRI facility lately?

It seems a forgone conclusion that single payer is the only viable alternative to Obamacare. What is so politically impossible about a free-market approach? Facilities such as the Surgery Center of Oklahoma (http://surgerycenterok.com) demonstrate that you can reduce the cost of most routine procedures to a mere fraction of the prevailing rate when you post your prices up front and demand cash on the barrel head. I'd think that the idea of busting up the medical monopolies would be a very popular one. Never mind the attractiveness of getting your choices and privacy back.

[curlew]

No matter who gets into the White House, I'm pretty sure that the Bush-era law preventing CMS from negotiating drug prices, or patients getting medications internationally, is going to be axed.

I don't know about that. Have any of the pharmaceutical companies been making contributions to the Clinton Foundation?

[Tyler]

What is so politically impossible about a free-market approach?

It's not so much about free markets but access to those markets. For example, the old system of insurers routinely denying coverage for any individual not in a corporate pool (effectively locking them out of care because of the insane game the providers and insurers play with billing) was tremendously unpopular for a reason. IMHO, any future with or without Obamacare will always have, at a minimum, some path for guaranteed affordable healthcare that doesn't require depending on full time employment. This isn't the country of corporate pensions and lifetime health plans anymore -- the economy is changing, and that ship has sailed.

[MachineGhost]

Future: MediCare For All + private insurance plans for non-basic coverage.

The drug price problem is only going to be solved by abolishing or seriously reforming the crony corrupt FDA and the entire parasitical ecosystem that surrounds it. Not holding my breath on that one, but wonders do happen occasionally. I just don't see any grassroots movement of outrage formenting that would be conducive to that happening. The FDA's too busy trying to outlaw its primary competitor (supplements and stem cells) to bother getting its own ship in order. Hopeless. It's only disgusting because the FDA wields such extraodinary power over our very own lives that Congress stupidly gave to it. What the fuck do politicians or lawyers know about how the real world works?

[clacy]

I listened to part of an in depth radio segment discussing the problems with the ACA and they had one expert from each side of the isle. They both agreed that Obamacare is working and will continue to work for those that are at or below 200% poverty rate, and it will continue to be completely unaffordable for those above that threshold.

Changes are necessary but finding a common approach will be difficult.

[Maddy]

What is so politically impossible about a free-market approach?

It's not so much about free markets but access to those markets. For example, the old system of insurers routinely denying coverage for any individual not in a corporate pool (effectively locking them out of care because of the insane game the providers and insurers play with billing) was tremendously unpopular for a reason. IMHO, any future with or without Obamacare will always have, at a minimum, some path for guaranteed affordable healthcare that doesn't require depending on full time employment. This isn't the country of corporate pensions and lifetime health plans anymore -- the economy is changing, and that ship has sailed.

Once you make insurance available to everyone, no matter what kind of train wreck they are, and once you extend coverage to address every conceivable need, you're no longer talking about insurance, but rather a social welfare program administered by insurance companies. The revelation that the present system works for only those below 200 percent of the poverty level is no big surprise.

A step in the right direction (after breaking up the government-sponsored monopolies) would be to allow people to group themselves into appropriate risk pools, as contemplated by the traditional notion of insurance, and to return insurance to its appropriate function as a safeguard against catastrophic, unforeseeable losses. Notably, by ridding the system of the price-rigging monopolies, insurance naturally moves toward a catastrophic model because the vast majority of expenses can be budgeted for by people of ordinary means.

You deal with the problem of folks who can't qualify for, or afford, insurance as the social welfare issue it is. This removes the incentive for cost-shifting and allows the actual costs and benefits of government-provided care to be seen for what they are.

[MachineGhost]

I just can't wait for the day we impose strict term limits. Outrageous Boondoggles like the insurance racket would never, ever happen again.

[Tyler]

IMHO, we need something that not only lets insurance be insurance, but also breaks the "negotiation" dynamic reserved for the sole benefit of insurers and providers. Making costs truly transparent for all regardless of the power of the group they're lucky enough to be allowed into would be a huge positive development no matter what form the payments take.

The current system is definitely broken. But the previous system was also broken and going back won't fix the cost problem. It just shifts the burden to a different group without addressing the root cause.

[MachineGhost]

I don't see anything wrong with Medicare premiums and copays. The current insurance companies can focus on providing Medicare supplement insurance for people who don't like copays. It'll give them something to do other than go out of business when Medicare becomes the national insurance.

So long as we realize they are politically motivated premiums and not actually reflecting true costs. But I guess that's par for the course for public health care. Canada's Medicare faces mounting insolvency issues because of chronic underfunding.

Maybe what we need is Medicare for All managed by the competitive private sector rather than a government agency. We both know Medicare couldn't price risk accurately if their lives depending on it. Government fucks up literally everything. (And before you trot out that alleged lower administrative costs, the increased fraud costs to make up the gap in non-enforcement rapidly overwhelms the ghost savings vs the private sector.)

I've said it before but Switzerland does it right. A competitive free market in health insurance and one national singke risk pool. A real no brainer.

[WiseOne]

Just to underscore my point about the pharmaceutical industry being the single biggest cost problem:

http://www.beckershospitalreview.com/su ... ocket.html

If I were dependent on one of the drugs with these absurd price hikes, I'd definitely be buying online from India, Bermuda, or Canada. Recall also that overpriced drugs have a particularly large impact because drugs are taken daily/regularly. Hospitalizations and office visits are comparatively rare, so their daily cost is small. Certainly there are catastrophically expensive cases where patients spend months in the hospital, but that's the exception rather than the rule.

I agree with MG that the FDA's byzantine review process is part of the problem, but then look at how much the drug companies spend on advertising to the public and physicians. In some cases it's more than they spend on research, and the statistics probably aren't counting the costs of employing all those drug reps that are massed outside my office door like fleas.

https://www.washingtonpost.com/news/won ... -research/

[Tyler]

Yeah, that's insane. I get why new experimental drugs are expensive. But gutting people for something as ubiquitous as insulin? Tar and feathers seems like a reasonable response, but it may be difficult to find every responsible party in need of shaming.

[MachineGhost]

"Price hikes" because a generic is no longer available isn't really a price hike per se. I'm hazy about the specifics but I think generic insulin is longer available due to over-regulations causing drug shortages and because very few manufacturer's aren't running afoul of quality control standards. Insulin was the first genetically modified drug so its not something you can just manufacture in a filthy, rat-infested facility in Georgia that Johnson and Johnson loves to use.

So complaining about prices going up that is necessary to attract new entrants to the field to arbitrage the profits away is misplaced when blaming the manufacturers and not the government for overregulating and providing protectionist pseudo-monopoly status. This isn't a Martin Shkreli douchebag issue here.

Also, WiseOne, consumer marketing for drugs wouldn't be necessary if they didn't cost 2.5+ billion over 12 years just to satisfy arcane FDA regulations. Cart before the horse.

Really, the simplest solution to lower drug prices via competition (note that I said competition; it's not a cure all for a non-free market) is to give existing dietary supplement and OTC drug companies the legal ability to produce generics which they are currently denied. Prices would drop so fast, Big Pharma's head would roll off. Although, I would want some minimums on it so that not anyone at their kitchen table or overseas could start selling the stuff.

Another category that would result in lower prices and an increased supply of drugs is the FDA allowing "Non-FDA Approved" prescription drugs. A large part of the 2.5+ billion cost is having to also demonstrate efficacy and not just safety. It shouldn't be the FDA's job to require proof of efficacy which relies on the fox guarding the henhouse since the government is always and everywhere always too incompetent to determine anything based on common sense. Regulatory capture of a single government agency has proven "efficacy" to be completely hollow compared to millions (billions?) in the free market voting with their money and their lives. Word will get around pretty freakin' quick, trust me.

[Tyler]

So complaining about prices going up that is necessary to attract new entrants to the field to arbitrage the profits away is misplaced when blaming the manufacturers and not the government for overregulating and providing protectionist pseudo-monopoly status.

Like I said, there's plenty of tar and feathers to go around.

[MachineGhost]

So complaining about prices going up that is necessary to attract new entrants to the field to arbitrage the profits away is misplaced when blaming the manufacturers and not the government for overregulating and providing protectionist pseudo-monopoly status.

Like I said, there's plenty of tar and feathers to go around.

I'm never interested in blame, but identifying root causes. One must study the enemy to find its weaknesses to attack.

[Maddy]

Well, this is interesting. For those dolts who are still asking why the "free market" doesn't intervene to keep drug prices down, here is the real story behind the $600 Epipen which dispenses a couple of dollars worth of epinephrine. To no thinking person's surprise, it turns out that none other than the FDA has been running interference for its maker, Mylan Pharmaceuticals.
http://www.zerohedge.com/news/2016-08-2 ... fdas-fault

[WiseOne]

That interpretation may be true, but it's kind of hard to know. There may have been safety issues with those alternatives. Not that I'm a big fan of the FDA, which probably has former employees of Mylan on its board.

The thing is, it's not just the FDA choking off competition. There's also the laws preventing CMS (the agency overseeing Medicaid and Medicare) from negotiating drug prices, and those making it illegal for you to buy medications from Canadian or overseas pharmacies.

http://www.cnbc.com/2014/05/23/patients ... tions.html

[Kbg]

I'm not in the medical field, but I worked in another field that has been known from time to be crazy expensive on some things. What I realized after being at the intersection of business and government for six years is that the system works exactly as designed...

I don't lean left, but welfare queen stories infuriate me. The US is filled with very, very expensive welfare queens who don't live in the inner city.

[Maddy]

I've racked my brain for a reason why a single risk pool (ala Medicare) is a beneficial thing. Does it boil down to policymakers wanting to hide the true costs of the medical welfare state?

[Pointedstick]

I imagine one benefit is that it avoids some people being so "risky" as to be uninsurable, which was a major complaint about the pre-Obamacare system.

[Tyler]

What I realized after being at the intersection of business and government for six years is that the system works exactly as designed...

Yep.

Obviously pharmaceutical companies love high prices. Insurance companies also love high sticker prices for drugs (that only they can negotiate down) because it forces people to purchase insurance simply to participate in the pharmaceutical market. And politicians are more than happy to squash competition for both in exchange for truckloads of cash.

Win-Win-Win

With a huge LOSE for the rest of us, of course.

[Maddy]

I imagine one benefit is that it avoids some people being so "risky" as to be uninsurable, which was a major complaint about the pre-Obamacare system.

What I'm really asking is this: If you intend to provide medical benefits to the uninsurable and to those who cannot afford insurance, why not simply do that in an above-board way--i.e., by way of a medical welfare program? By separating this out and calling it what it is, society can begin to make informed decisions about the kind of money it's willing to throw at the support of public health care, what kinds of interventions it's willing to pay for, and what it's going to require from beneficiaries in the way of responsibility for their own health status. It seems like insisting that everybody be part of the same risk pool is a convenient way to keep from having to confront the reality of how rapidly resources are being consumed by people who are contributing very little to the system and who, in many cases, are taking very little responsibility for their own health.

[Tyler]

I've racked my brain for a reason why a single risk pool (ala Medicare) is a beneficial thing. Does it boil down to policymakers wanting to hide the true costs of the medical welfare state?

It seems to me that having multiple risk pools will result in the highest risk individuals eventually being priced out of heath insurance. I suppose then the question would be: feature or bug.

Exactly.

The previous system of having health insurance tied almost solely to company coverage was hugely beneficial to insurers for this very reason. Consider someone who paid for insurance coverage for years only to get sick. Want to change jobs? Prior to the 1996 HIPAA act that ensured portability for people with continuous coverage, they were uninsurable (at a minimum, excluding their preexisting condition was commonplace). And even after group portability was finally enforced, that portability only applied to company group plans. Lose your job or retire early? Your coverage was gone, and if you were really "lucky" you'd get the honor of paying triple in a high risk pool. Think of the separation of risk pools not as an economically efficient means of pricing insurance but as a clever way of jacking up rates and reducing coverage for people when they need insurance most even if they've been paying in their whole life. Basically, the individual market is unprofitable for insurers by design.

Insurance completely independent of employment status secures the economic freedom of individuals to make life and health decisions regardless of the name on the top of their paycheck. I totally understand the argument that one should not be able to ignore insurance and only purchase it when they get sick. But using employment changes as an arbitrary mechanism to deny coverage or jack up rates for long-time customers was an unethical system that IMHO we need to leave in the past. And considering the way the economy has changed in favor of part time and short term employment (the days of my dad working at the same company for 35 years are long gone), I'm not sure going back is even an option.