We did much worse than Obamacare
Tyler Cowen has a post on various topics. This caught my eye:
Perhaps two things I was right about, but still not recognized as correct are: 1) post-2012 or so (but not earlier), unemployment was fundamentally a re-matching problem, and would not have been helped much by nominal decisions by the Fed, and 2) we could have done much better than Obamacare and no I don’t mean single payer.
Obviously I disagree about the post-2012 period, but I’d like to focus on Obamacare. Tyler’s right that we could have done much better, but he doesn’t mention that we’ve actually done much worse. But wait, didn’t we end up with Obamacare?
In fact, the most valuable part of Obamacare was the so-called “Cadillac tax” on health insurance, which would have gradually phased out the massive tax subsidy to health care, perhaps the most important single factor driving up costs and driving down living standards for working class Americans. It was phased out during the Trump administration, perhaps his single most destructive policy decision.
I recall that this Obamacare provision was touted by Democratic policy wonks as a huge gain in efficiency, and they were right. So why does hardly anyone even talk about the fact that we’ve ended up with a much worse system than Obamacare?
The answer is simple. We are now polarized into two tribes—Democrats and Republicans. Both tribes conspired to screw the public in order to bail out the bloated health care industry, and thus neither tribe wants to talk about this shameful act.
Don’t let the media tell you what the important issues are. The important issues are not cancel culture, GameStop, or even monetary policy. They are 400,000 in prison for drug crimes, 40,000 needless deaths from kidney shortages, US support for mass murder in Yemen, and lots of other stuff you hardly even see mentioned on twitter.
PS. People wonder what I mean by utilitarianism. Ponder this quote:
Speaking to KDTV, Washington County Republican Party chair Dave Ball said: “We did not send him there to vote his conscience. We did not send him there to do the right thing, whatever he said he was doing. We sent him there to represent us, and we feel very strongly that he did not represent us.”
Yes, there are people who don’t care about maximizing aggregate welfare. They care about maximizing aggregate GOP welfare.
PPS. Make that GOP male welfare.
Tags:
17. February 2021 at 11:21
“Esper’s characterization of the delay was disputed by former acting Defense Secretary Christopher Miller, who told the Times that it centered on “timing considerations, not that they were women.” He said, she said. That said, boring story…..
17. February 2021 at 11:22
Re: GOP male welfare
17. February 2021 at 11:45
I love how you will believe anything written bad about Trump.
But to your main point. This is a question not a disagreement.You will need to explain how not paying taxes on employer-provided healthcare is “the biggest factor driving up costs and driving down living standards”. I agree that treating health care differently than other income makes no sense—a holdover from WW2. Why not food too?
Companies foot the bill for health care. I assume they get a tax deduction on that (if they don’t then they cancel out the benefit the employee gets). So, yes, the government gets “shorted” on taxes—perhaps 27% of the premium–or whatever the average marginal tax rate is.
But you would have to assume the employee would want less health care if they have to pay 27% of the premium–which makes sense—you buy less if it costs more. And if they buy less they would have to pay more when they have higher deductibles —–or uncovered conditions—hence they might use health care less.
However, these are changes on the margin. Regardless of what you pay, once you own insurance you will use it as much as you would if you did not pay taxes on the premium.
So, if we assume not paying taxes is a “subsidy” :-), it is easy to see that some percent of healthcare would decline without the subsidy.
But that seems like a large distance from “the biggest factor driving up costs and driving down living standards”.
Hence, while this appears like a statement—it is really a question.
17. February 2021 at 11:59
Where can one read more about why the Cadillac tax was so great?
17. February 2021 at 12:01
I think it is absurd we get our health care from our employers. Like I said, why not food care too. I would rather get higher cash pay, and purchase exactly the insurance I want with after tax dollars. But that would require a free market. And if there is one area we cannot have a free market, it is of course health care! Because………?? We can still subsidize the poor—of course. It really is absurd—-but like so many other policies—these are entrenched—-and every change makes it worse.
17. February 2021 at 12:10
The worst part of Obamacare is that new “stakeholders” were created by the legislation and due to extremely bad luck one of the new stakeholder’s last names was Kushner! So by 2016 it was obvious the ACA Exchanges weren’t going to work due to how unhealthy the people were in that particular risk pool were, so at that time the Exchanges and subsidies should have been scrapped and replaced with Medicaid up to 250% FPL and then a $5000 refundable tax credit along with some prohibition on preexisting conditions. Unfortunately the fact new stakeholders were created and one was Josh Kushner meant Trump was committed to saving the ACA Exchanges and the new companies started to take advantage of the subsidies…so Trump has stated he could have destroyed Obamacare with executive orders but instead he chose to make it as good as it could be made.
And yes Republican consultants quickly zeroed in on the worst sounding health insurance reforms of Obamacare and started attacking them non-stop even when Republicans had supported those measures in the past. Now Democrats deserve some of the blame for attacking Medicare Part D for years based on the fact it wasn’t paid for so they pretended to pay for Obamacare with measures that Republicans could attack. So the individual mandate was largely innocuous but it sounded bad and so Republicans attacked that along with the Cadillac Tax and the Medical Device Tax non stop and win back the House and Senate.
17. February 2021 at 12:20
Michael Rulle, I too believe it is absurd that we get our health insurance from our employer, but the reality is a universal single payer health care system is the most logical system because it has the biggest risk pool. So free markets don’t work with health care and America has a hybrid system in which Americans ages 18-65 get their health care controlled by the state and the largest employers in the state and it is funded by what amounts to a VAT. So America should resist implementing VATs because we already have one to pay for health care. So every product and service you purchase includes the costs of some other American’s health care and companies treat health care costs as a line item on a budget which makes it like a VAT. So the positive of our system is that it does inject some free market forces into a system in which it is difficult to get free market forces injected into. So that means Bill Gates and Jeff Bezos find value in Humana and Aetna and BCBS because they employ them to run the health care systems for their employees.
17. February 2021 at 13:27
Who decides what is maximum utility? It is personal opinion. In Scott’s world , his will governs the universe. That is a frightening thought. Scott = Society’s moral tyrant
17. February 2021 at 13:27
Scott,
Why do you say “We’ve actually done much worse.”
As to the Cadillac tax, it’s kind of irrelevant in my opinion. Prior to ACA, employers (and employees) were abandoning low deductible plans in droves even absent the tax, they continue to do so.
17. February 2021 at 13:30
Scott,
And BTW the Cadillac tax only addressed a very small part of the tax subsidy on employer provided plans.
17. February 2021 at 13:48
Scott,
People are naturally interested in issues that affect them or their environment personally. That’s what politics is all about. You have to find topics that affect almost all people. Health policy and monetary policy are amongst those topics; your issues are not.
17. February 2021 at 13:59
Even without getting into monetary policy, much of the “re-matching” problem Tyler is referring to was the process of moving a couple million construction workers into other sectors even though it would have been really useful for them to just keep building houses.
17. February 2021 at 14:01
The best system is not single payer or Obamacare, it’s the Singapore system.
The tax deduction boosts costs at many different margins. First, it encourages people to buy health care via insurance. That causes overconsumption as the insurance company pays for each procedure at the margin. Second, the subsidy encourages the purchase of more lavish insurance plans than otherwise, as there is a huge tax subsidy (roughly 40% when you add the income tax rate MTR and the 15.3% payroll tax.) Third, it encourages health care providers to offer more luxurious and expensive facilities, and to develop new equipment that doesn’t actually meet cost/benefit criterion.
If I had not had health insurance, I would have spent far less on health care during my life. I don’t believe I’m atypical.
17. February 2021 at 14:08
Jg, Opposing a government subsidy makes me a tyrant? Okaaay. . .
dtoh, The Cadillac tax was going to start small, but eventually it would have become very important. You can’t just look at the initial tax.
And raising the deductible doesn’t solve the underlying problem.
Christian, You said:
“People are naturally interested in issues that affect them or their environment personally.”
I’ll remember that next time you talk about China’s persecution of the Uyghurs.
17. February 2021 at 15:04
Why is government encouraging home appreciation?
get this?: “The tariffs — also called duties — ranged from 3% to 24% on five specific Canadian lumber companies. For all other Canadian lumber companies, there’s a nearly 20% tariff on exports to the US.”
17. February 2021 at 15:14
Scott,
CCP China does concern the West and me personally. Like Germany around 1900, they want to sit at the table of the greatest nations, preferably on the throne itself.
This would not be a cause for concern per se — if it were not a fascist regime. Moreover, with a tendency to interfere in the most absurd, grotesque matters. Norway? Australia? The NBA? Really?
This is certainly one explanation why the Uyghurs interest the world community more than Ahmadiyya, Adivasis, Zoroastrians, Twa, or whoever.
17. February 2021 at 16:07
Gene, “but the reality is a universal single payer health care system is the most logical system because it has the biggest risk pool. So free markets don’t work with health care…”
This is a bad argument for socialized healthcare. The value gained from expanding the risk pool, by reducing risk, diminishes the larger the pool gets. Yes there are economies of scale. That means an insurer who insures 10k people will save a lot by having a lower-risk pool relative to one that insure 1k people. But we’re talking about insurers that insure millions or tens of millions of people. At that point, the gains made by converting to a monopoly that “insures” 300 million are negligible, that’s just a mathematical fact. An insurer of 300 million people has little advantage over one that insures 30 million. The advantage of expanding your pool diminishes rapidly when you get to very large numberd.
17. February 2021 at 16:40
Correct post now sorry.
Scott,
That may all well be, but does that explain the difference between GDP shares in, say, Europe vs. the US?
Subsidies are extreme in Germany, for example. The employer always pays at least 50% of the insurance. In the case of state civil servants, the state even paid up to 90%.
On top of that, there is trickery, billions of taxpayers’ money from the federal budget are also poured directly into the health insurance companies. So it is clearly more than 50%.
17. February 2021 at 16:41
Quotes out of context. What he means is he expects his representative to vote the conscious of his voters and not his personal conscious. They differ.
And constitutionally Trump did nothing illegal. Which is important.
17. February 2021 at 17:52
If you want to be honest about who killed the cadillac tax, look at “fight the 40”.
https://web.archive.org/web/20200220100803/http://www.fightthe40.com/about-the-alliance/
Don’t be distracted by the individual companies on the list, either. There are lots of front groups.
Basically the entire S&P 500: https://www.americanbenefitscouncil.org/about-the-council/about-us/
Pretty much the entire university system: CUPA-HR
Plus the entire insurance system: BCBS, NAHU
Plus most of the public sector unions: NACo, NLC, GFOA, Unite Here
17. February 2021 at 18:05
Mark Z, the problem is how you get to smaller risk pools with health insurance. So I make the argument all the time to Bernie Bros that Vermont and Massachusetts could have Medicare for All (M4A) tomorrow because “all the residents in a state” is a fine risk pool…and obviously in Massachusetts all of the money necessary to fund a M4A program is currently being spent on health care in the state. So no new taxes are necessary if you convert state employees and college professors to M4A first and over 5 years slowly convert everyone to M4A.
So the risk pool problem arises when you have households headed by a person with a good job vs a household with unhealthy family members which makes holding down good job with benefits difficult. Btw, Canada apparently runs their health care system at the provincial level which most American progressives are unaware of and so they don’t fault Bernie and Elizabeth Warren for failing to take the initiative to get M4A in their respective states.
17. February 2021 at 18:34
My country is a great example of what happens when you give government the rights to your health care.
1. The public system will be immediately challenged by private hospitals, erected by and for the rich.
2. The best surgeons will go to private hospitals, and the worst surgeons will be employed by the public hospitals. Indeed, many of our public hospitals cannot even recruit surgeons. One must wait weeks, sometimes months, to have surgery. And typically, that surgeon is volunteering at the public hospital — part-time — out of mercy for his countrymen. He earns 10x more at the private hospital.
3. You might think setting a bar on salaries and other such measures in the vain effort to create a utopian “equality” will prohibit the brain drain. It won’t! Setting a bar on the salary ensures that the best and brightest go into finance, or other fields that pay more. The less bright will now be conducting your brain surgery.
The best government is a government that gets out of the way of the private sector. The health insurance in the United States is high because of your government, not the private sector.
You live in a society that rewards lawyers with large payouts for suing medical professionals. Such rewards can bankrupt a hospital, and even the insurance company itself. Hence, the need for high premiums.
Your country has very high pharmaceutical costs because the pharma companies pay billions to special interest groups every year that create barriers to entry and legal statutes prohibiting generic alternatives.
Another factor is that doctors themselves have no say in what treatment you are to receive. They are told to give you every exam, even if unnecessary, to protect the hospital from attorney’s.
Scott spoke not long ago about the income tax, and his hatred for Woodrow Wilson. That is the perfect example of how government abuses a policy. Every policy enacted since than was to fix the broken system they created. But each “fix” simply made it worse.
Same is true with healthcare. The healthcare is so awful because of government. But they want you to believe that if only they had more control they could fix it.
Look at my country folks. Look at the health care system in my country of Thailand. Ask yourself if that is a quality health care system?
It is. But only for the rich!
17. February 2021 at 20:03
Christian, I hope you don’t think you are fooling anyone when you talk about the Uyghurs.
As for healthcare, Europe regulates costs much more strictly. In the US we regulate costs UPWARD.
Sean, You do know that the voters wanted Trump convicted, don’t you? He wants the senator to ignore the welfare of anyone who didn’t pull the lever for the Republican Party.
In fact, a senator is supposed to represent all citizens, not just one party.
You said:
“And constitutionally Trump did nothing illegal. Which is important.”
Trying to overturn a democratic election is not an impeachable offense? Is that really your claim? Even those who voted not to convict, like McConnell, admitted he was guilty. They hid behind the fig leaf of him already being out of office.
Steve, Yup, and Trump signed the bill.
18. February 2021 at 00:20
Scott,
“And raising the deductible doesn’t solve the underlying problem.”
How do you figure that?
And what makes you think Singapore has a good system?
18. February 2021 at 00:44
Steve, Yup, and Trump signed the bill.
Wait, so you want the Nazi Insurrectionist Dictator to override the will of the people who donate?
You do realize that shrinks are available over Zoom, right?
18. February 2021 at 03:36
“Don’t let the media tell you what the important issues are. The important issues are not cancel culture, GameStop, or even monetary policy. They are 400,000 in prison for drug crimes, 40,000 needless deaths from kidney shortages, US support for mass murder in Yemen, and lots of other stuff you hardly even see mentioned on twitter.”
All important issues.
However, and no one has discredited ‘this’ important issue?
‘We’ have ten years?
“ . . . our best estimate is that the net energy
33:33 per barrel available for the global
33:36 economy was about eight percent
33:38 and that in over the next few years it
33:42 will go down to zero percent
33:44 uh best estimate at the moment is that
33:46 actually the
33:47 per average barrel of sweet crude
33:51 uh we had the zero percent around 2022
33:56 but there are ways and means of
33:58 extending that so to be on the safe side
34:00 here on our diagram
34:02 we say that zero percent is definitely
34:05 around 2030 . . .
we
34:43 need net energy from oil and [if] it goes
34:46 down to zero
34:48 uh well we have collapsed not just
34:50 collapse of the oil industry
34:52 we have collapsed globally of the global
34:54 industrial civilization this is what we
34:56 are looking at at the moment . . . “
https://www.youtube.com/watch?v=BxinAu8ORxM&feature=emb_logo
18. February 2021 at 07:04
@Scott
Interesting point on not having health insurance. I agree it encourages usage—-whether tax deductible or not. I only go to doctors to check on death causing diseases——but most of these visits are preemptive. Yet, they have found issues that are very important.
Still, we can self insure by saving on premiums for such preemptive visits—-and insure for “the body potentially burning down”—-like we do with houses.
But we cannot do that now without great cost. Pricing is not transparent. Pricing is differentiated for different patients. We stumbled into this due to price controls in the 40s (maybe or even likely it might have happened anyway). I have stopped analyzing this in any serious way because it will not change.
Some think that Government monopoly and forced insurance would work the best. Talk about not seeing the unseen——this is insane. But—-the western world has moved in this direction uniformly.
They do “ration” which really means they stretch out the time period from request to seeing a doctor. Canadians seem to like it—-the ones I know have no complaints. Free college and free health care (on the margin of course) in exchange for higher taxes.
They feel secure. But, they do have America across the border in case of emergency—-so a little bit of “drafting’ supports the system.
18. February 2021 at 10:04
We could also just have a free market with private insurers which insure millions of people across date lines for suitably large and diversified risk pools, but also competition, which is absent with single payer. I do think that state-level single payer would be less bad than national single payer, because there would at least be inter-state competition, but even better if healthcare policy is actually left to the states (unlike in Canada) and states that opt for single payer still have to compete with states that don’t.
It seems like the problem you’re describing is with getting group plans through an employer, and unemployed people not getting into ‘pools’ for such plans. In my ideal world, unhealthy households orindividuals would just buy individual plans, and they’d be expensive because they’re unhealthy, but that’s not a risk problem. It’s profitable, at the right price, for an insurance company to insure millions of unhealthy people individually, and not necessarily any more risky than insuring healthy people. Just more expensive. Hence the higher prices, which is fine, imo.
18. February 2021 at 10:31
Mark Z, the big health “insurance” companies are Fortune 500 companies and so they are powerful stakeholders in the status quo (large employers aren’t really providing “insurance” because they self-fund health care costs which are a line item on their budget). Plus the other Fortune 500 companies are stakeholders in the status quo because they apparently view having an HR department oversee their employees’ health insurance as a positive. So right now and prior to Obamacare the states were regulating health insurance for the vast majority of Americans under 65 through the group market. Obamacare was an attempt to bring the individual market up to the quality of the group market without disrupting the group market…except the individual market apparently had a lot of very unhealthy individuals in the risk pool which is why the policies before subsidies are so expensive. Bottom line—our health care system isn’t changing anytime soon because of the powerful stakeholders invested in the status quo.
18. February 2021 at 11:20
Dtoh, Singapore spends 5% of GDP, vs. 18% in the US. That doesn’t prove that US spending is wasteful, but when combined with inefficient US subsidies and regulations it strongly suggests that there’s a lot of waste in the US. In Singapore, the government spends about 1.5% of GDP in health care, vs. 8% in the US. So that allows Singapore to have much lower taxes, which boosts the efficiency of the Singapore economy. They rely more on HSA’s, which tend to encourage responsible spending (if done right—they aren’t always done right in the US.)
Steve, Amusing to see what dumb commenters think is clever.
Michael, I’ve wasted so much time fighting with insurance companies. For that reason alone I’d prefer to pay out of pocket.
Gene, You said:
“our health care system isn’t changing anytime soon because of the powerful stakeholders invested in the status quo.”
Yup. And that’s why the demise of the Cadillac tax was such a tragedy.
18. February 2021 at 11:49
Scott,
I personally think Obamacare is a very good law, even though I agree it could be a lot better. I think Republicans agree with me, because they didn’t repeal it when they had complete control of both chambers and the presidency- truly the “hold me back” party. I found the demise of the Cadillac Tax to be a huge disappointment. I agree that it was one of the best features about the bill. One of the worst features was the employer mandate, which critics railed against, but when the opportunity came, they went after the individual mandate instead. I agree with you on many of your other priorities too, but I think the number one priority at this point is preserving the republic. I never thought I would say that. Good post.
18. February 2021 at 12:47
@Gene F and everyone:
Yes indeed the current system is almost impossible to change, because of existing stakeholders: which is really just cash flows. It is a tautology that the only way we will spend less on health care is if doctors, hospitals, insurers, drug and device makers make less money. And that’s a lot of stakeholders that will fight tooth and nail.
The old saw for health care is “good, cheap, fast….pick two”. The US is fast and good, with enormous costs. Places like Canada are good and cheaper, but with long waits often.
18. February 2021 at 13:19
Scott,
I’m not debating whether the U.S. overspends. I agree it does. What I asked is what is good about Singapore.
Singapore spends more per capita than Japan despite the fact that the percentage of the Japanese population over 65 is nearly 2.5 times higher than that of Singapore.
I’m not arguing that either Japan or Singapore is good or bad. What I’m asking is what are the objective metrics by which you’ve determined that Singapore has the best system.
18. February 2021 at 14:20
Singapore’s policies associated with housing and real estate are also worth mentioning. Of course, it could never be implemented here, but it’s still a good case study in effective management of scarce resources.
I hope that healthcare costs in the U.S. will eventually be subject to Stein’s Law. The pandemic has made Big Medical a hero, but the system is still nuts.
18. February 2021 at 15:03
msgkings, it actually would be easy to implement M4A at the state level without raising taxes…the states already run a health care program and our hospital systems med schools and licensing medical professionals in general is regulated at the state level.
So you simply start by transferring the residents with the best health insurance policies to the state M4A program. So college professors and state employees would be first transferred to the state M4A and by doing that you are starting out with the most revenue to prove that you can offer better health care for cheaper AND these people tend support liberal policies so the political “buy in” should be easy. And instead of additional taxes you just have premiums and deductibles along with Cost Sharing Reductions like in Obamacare. Remember, the people pushing M4A say they can do it cheaper and better so if you go from best policies (most expensive) to worst policies along with still having premiums and deductibles and copays (taxes) you should have enough revenue to cover 100% of the population.
So Vermont attempted M4A but they attempted to create a parallel system so revenue was an issue—except if the goal is 100% in M4A all the revenue necessary to run the program is currently being spent on health care in the state!! So the fact Bernie and Elizabeth Warren have never taken the initiative to provide leadership implement M4A in their respective states means the stakeholders who have their ear prefer the status quo.
18. February 2021 at 15:40
Even without the Cadillac Tax, Obamacare has been perfectly fine. The top level numbers on % insured, healthcare spend as a % of GDP are fine and on the more micro level the various disasters that conservatives and libertarians foretold haven’t really happened. That said, calling the Cadillac Tax “part of Obamacare” is a stretch. It was basically put in to make the bill more palatable to neoliberals and to boost the CBO 10-year score budget impact. Various other revenue raising elements of Obamacare were put into effect immediately. Even you grant a need for a transition period given that it could lead to significant changes in insurance policies, that it had an 8-year implementation gap shows that it was not really meant to be implemented.
18. February 2021 at 15:50
@Gene F:
Possibly some truth to your point but it’s not as simple as you maintain. The main issue is that people don’t like change when it comes to their medical and health situation, and most people are fine with the current system overall even if they grumble about it. Combine that with what I said above (to spend less on healthcare, a lot of people make less) and you have a lot of inertia to deal with.
18. February 2021 at 16:31
msgkings, I agree people resist change which is why the only way M4A could ever be implemented is starting with states in which senators who promote M4A win statewide office. So M4A makes more sense at the state level and yet Bernie and Warren run for federal offices and don’t attempt to implement M4A in their respective states. If Massachusetts implemented a M4A that was cheaper and better then other states would adopt it. In fact under governor W Bush deregulated the electricity market and it didn’t make electricity cheaper and better so most states haven’t deregulated their electricity markets.
18. February 2021 at 17:37
Scott,
I struggle to understand why so many conservatives and libertarians this Singapores system is so great. The real reason that healthcare costs are so low in Singapore is that the government negotiates unit costs. The number one reason that we spend so much on health care is that prices are higher. The reason Singapore, and every other advanced country, have lower costs is because the governments negotiate prices. Medicare and Medicare have been effective at reducing costs by using their negotiating power to greater effect than private insurers. We could reduce costs further if we allowed them to negotiate drug prices more. I love HSAs and would be totally in favor of mandatory HSAs similar to those in Singapore. I love the Cadillac Tax because I think employer provider insurance is the worst feature of our system. It creates a two-tier system that in inequitable and create terrible incentives. I personally decided not to start my own business in the 2000s primarily because I did not want to be subject to the private insurance markets. I haven’t run the numbers, but I imagine that I may have made a different decision following Obamacare. I’m not in favor of M4A for reasons that are likely different than yours.
Everything that I’ve read tells me that the only ways to reduce overall overall health care spending in a significant way is to: first reduce prices, and a distant second to reduce administrative costs. I’m not aware of any country that has reduced prices, to include Singapore, without the government either negotiated or regulating prices. And if a Cadillac Tax is politically possible here, government negotiated prices won’t ever happen.
My healthcare bill would include the following:
Create a federal HSA program with incentives, and hope that it becomes popular enough that it can be expanded and eventually made mandatory.
Modify tax policy to disincentivize employer provided insurance and incentivize entry into individually purchased insurance. While phasing out tax incentives for employer provided insurance, I would also provide a mechanism for employers to provide a similar contribution to employees who chose to purchase insurance on the individual markets. Again, I would hope that it would become popular.
Eliminate or reduce state regulation of insurance markets to provide greater competition.
Allow Medicare, Medicaid, and the public option to negotiate drug prices.
Introduce a public option and hope that competition forces private insurers to reduce administrative costs and negotiate prices more aggressively.
This plan could lead to single-payer if the public option proves to be more popular that the private options. That would not be my goal, but I would be OK with that outcome because it would be determined by markets. My ideal outcome would be that the public option be just one of many options in a competitive market.
Note, the public option would not be subsidized, beyond the ACA individual subsidies which would benefit private insurance equally.
18. February 2021 at 19:02
I think it’s not surprising to see a technocrat defending the idea that representatives should “do the right thing” (whatever that is) instead of, oops, represent !
18. February 2021 at 19:14
Hum, in a REPRESENTATIVE democracy REPRESENTATIVES should no REPRESENT then?
18. February 2021 at 19:14
Everyone here is babbling on about solutions even though I suspect they haven’t defined (or even understand) the problems with the current system.
18. February 2021 at 21:50
“The old saw for health care is ‘good, cheap, fast….pick two’. The US is fast and good, with enormous costs.”
Fast and good seem like the right two priorities for a rich country like the US. We could be less not-cheap with reforms like Scott’s Cadillac Tax. Unfortunately, we switched to single-payer for Covid-19 vaccines which converted us from fast, good, and not cheap to slow, good, and cheap — exactly the wrong thing to do for Covid, where speed is of the essence! That’s because the system was designed to accomplish one goal: make sure rich people don’t get the vaccine too soon.
19. February 2021 at 10:47
bb, You said:
“I think the number one priority at this point is preserving the republic.”
I agree, that’s why I kept telling people that Trump was the worst president ever; he tried to abolish democracy in America.
dtoh, I should have said the best system that I am aware of. I like it’s very low cost to taxpayers, and also it’s heavy reliance on HSAs. How much does the Japanese government spend on health care, as a share of GDP? This source says 8.55%:
https://ourworldindata.org/grapher/public-health-expenditure-share-gdp-owid
That’s way more than Singapore, which is around 2%.
JHE, You said:
“The top level numbers on % insured, healthcare spend as a % of GDP are fine”
Spending 18% of GDP is fine?
Jose and Romeo, If you want direct democracy, that’s fine with me. Use referenda. But we chose representative democracy for a reason. We didn’t want representatives to always vote the way the public would vote. Indeed the Senate was specifically set up in a way that would make it less representative than the House. I love how you Trumpistas always prattle on about honoring the Constitution, and yet know nothing about it. It’s like some Christians with the Bible.
In any case, your entire comment is nonsensical, as the public favored convicting Trump, so the senators who voted to convict were doing what the public wanted.
19. February 2021 at 11:22
The AMA and government regulations restrict supply. Our tax system and large heavily indebted government programs subsidize demand. Insurers and providers obfuscate prices. But other than that our healthcare system is a model of economic efficiency.
19. February 2021 at 11:40
Scott-I meant relative to prior to enacting Obamacare. Healthcare spending as % GDP has ticked up some since enactment/implementation, but not all that much. And, at the same time, there has been a real decrease in the % of people without health insurance since the opening of the exchanges and expansion of Medicaid. I think Obamacare does deserve *some* credit for having a few wonkish measures designed to keep costs in check, even if the Cadillac Tax would have been far more impactful than any of those now.
The problem with any reform is that most people like their present healthcare, so the only changes that the public supports are literal giveaways. The Democrats got burned for passing Obamacare in the 2010 congressional elections…and then the Republicans got burned for trying to repeal it in the 2018 congressional elections.
19. February 2021 at 11:58
I would also add that the U.S. medical sector has succeeded in total capture of regulators and politicians in to extent that no other profession aside from lawyers has. In particular, the Republican Party, which *should* be the one trying to reduce the government’s role, is full of doctors who rage about how they are drowning in red tape when in reality they benefit on a massive scale from the huge government subsidy to healthcare. It’s mostly only libertarians, policy wonks, and/or maverick types who seriously argue for getting rid of the healthcare tax deduction.
19. February 2021 at 13:06
One thing you can expect from any criminal organization is a lot of misdirection.
19. February 2021 at 13:35
Scott,
Why is government spend on healthcare as percentage of GDP a relevan metric. What difference does it make to the taxpayer if they are compelled to pay a tax or compelled to pay money into a “private” account, the use of which is strictly controlled by the government.
What difference does percent of GDP “spent” by the government make if country on the whole is grossly under-spending or overspending on medical care.
19. February 2021 at 13:38
@JHE:
Yes, the bottlenecks are basically those 2 you mention…most people are basically satisfied with their current situation, and doctors/hospitals/insurers/drug and device industry folks do not wish to receive less money (which is, tautologically, the only way for costs to come down)
19. February 2021 at 13:38
And BTW, you have still haven’t stated what you think are the problems with US medical care system.
19. February 2021 at 15:06
Prof. Sumner
Not everyone that defend the rule of law are “Trumpistas”. You have been using that expression lavishly in order to disqualify commentators for years, which, in itself, is shameful. The public favoring conviction this second round was 52%, but the constitution meant this vote to need qualified majority of 2/3 of votes, therefore, technically speaking, it is obvious the public, according to the constitution, did not favor conviction beyond any doubt. Also, no such proceedings should be made in a hurry, as they were, because Democrats wanted to use emotional reaction to the events in order to obtain a result, which was to get rid of a formidable opponent. Typical leftist behavior, also shameful. IMHO the hatred some groups of people feel for Trump is cloding their judgement, to so large an extent that thei are willing to sacrifice principles to achieve their desired results. This is something we see a lot in third world countries …
19. February 2021 at 15:38
@Jose:
Whatever clouded judgement Sumner suffers from, you are exhibiting your own much more foggy judgement. Trump is so obviously toxic and yet his cultists cannot see the man clearly. “TDS” applies far more to his supporters than his opponents.
Nothing Trump did was as bad as how he behaved after losing the election. I felt the Ukraine impeachment was baloney (like Clinton’s) but the 2nd one was fully justified. Presidents simply cannot act like Trump did after losing the election.
19. February 2021 at 16:01
“But we chose representative democracy for a reason.”
For those who missed this:
“Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens
Martin Gilens and Benjamin I. Page
Each of four theoretical traditions in the study of American politics—which can be characterized as theories of Majoritarian Electoral Democracy, Economic-Elite Domination, and two types of interest-group pluralism, Majoritarian Pluralism and Biased Pluralism—offers different predictions about which sets of actors have how much influence over public policy: average citizens; economic elites; and organized interest groups, mass-based or business-oriented. A great deal of empirical research speaks to the policy influence of one or another set of actors, but until recently it has not been possible to test these contrasting theoretical predictions against each other within a single statistical model. We report on an effort to do so, using a unique data set that includes measures of the key variables for 1,779 policy issues. Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism. “
https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf
‘Representative democracy’ for the plutocrats?
19. February 2021 at 16:30
bb, “The number one reason that we spend so much on health care is that prices are higher. ”
I’d recomend randomcriticalanalysis’s healthcare posts (or Arnold Kling’s book, Crisis of Abundance) that I think make a good case that the US’s overspending is largely due to higher volume of healthcare consumption, rather than higher prices. The extent to which US’s prices are higher than one would expect for a country of our consumption level is often exaggerated because people like to (mistakenly) fit healthcare expenditure as a merely linear function of per capita GDP (and they should fit it to consumption rather than GDP). Also, to the extent that the government can negotiate down prices without reducing supply (since this basically amounts to price controls) it implies a lack of competition, and suggests we should deregulate healthcare goods/services (I trust it’s not controversial to say that barriers to entry in nearly every aspect of healthcare provision are incredibly high).
19. February 2021 at 19:58
@Mark Z,
I think I agree with you a lot. Barriers to entry are a huge problem. For example, health insurance and licensing in general should not be at the state level. I also think we should allow more doctors to immigrate to the US, which would be a very good way of reducing prices. I’m skeptical of arguments that we overconsume, but I could be wrong. I know that hospital stays tend to be shorter in the US. Child birth is a great example. Prices are a big part of the reason we spend more. Most developed countries pay 60% to 75% of what we pay for pharmaceuticals and equipment. Our doctors get paid double what doctors in there developed countries get paid. I am aware that we practice a lot of defensive medicine, which is costly and likely harmful. I’ll try read some of the sources you recommend
I’m not familiar with how cost map to consumption in the US. How do they map?
And I agree with you about the supply effects. I think there is a lot of free riding from the rest of the developed world. Were we to negotiate drug prices, it might stifle development of new cures. That scares me. I love that we have these vaccines for instance, and I would not want to break the system that gave us these vaccines. BTW, the mRNA vaccines are mostly do to NIH research and NIH funded research. I would like to double down on that. Again, very curious about how the consumption mapping looks? Thanks.
19. February 2021 at 20:25
@dtoh,
I find myself agreeing with you again. I don’t think the distinction between government and private expenditures matter. And I have no clue why a nanny state that is also very authoritarian like Singapore is the darling of libertarians. I do like elements of their housing policy, but I definitely don’t want to live in Singapore.
And to your question of what I think the problems are?
1. I think we should have universal coverage. It doesn’t need to be totally equal, but I would like for everyone to have at least medicaid level coverage.
2. People should not get screwed over by the insurance companies and healthcare provides. Surprise billing is terrible. Getting a $10k bill because the ambulance took you to the wrong hospital for instance. The worst feature or our system was that someone could lose their insurance because they were unable to work, despite minting continuous coverage for his/her entire life. This almost happened to my sister- The ACA mostly addressed this, but if you are too sick to work, I believe your employer provided insurance can still dump you and send you to the exchanges.
3. Spending as a percent of GDP is a distant third for me. I think we spend too much, but we are a rich country, we work hard, and I can think of worse things to spend our money on. Still 18% is probably too high.
4. I think we should implement sensible improvements that make the system more efficient. I think HSAs are a great idea. I also think a public option would force the sector to become more efficient. The fact is that Medicare is much more efficient than private insurance, and people seem to be very happy with the coverage.
My comments were mostly addressing what Scott thinks the problems are. Finally, every other system in the world is more efficient than ours. I like some better than others. Singapore is way down the list for me. We should just copy some of the good features from the other systems. I would like a system that allows me to chose to pay extra for better coverage.
19. February 2021 at 23:15
@bb
I think you’re right on some of this stuff, but I think you need to answer two questions first.
One. Is the quality of US medical care good.
Two. Is there a significant number of people who aren’t getting medical care for serious issues.
20. February 2021 at 01:41
@dtoh,
The quality of US medical care is great in my opinion. I have very good employer provided insurance. If one of my children were to have a serious health condition, I would not trade the treatment they would receive anywhere else in the world. If I contract a chronic illness that made it impossible for me to work, I honestly don’t know where I would be. Prior to ACA I know from family experience, my employer provided insurance would not have helped me beyond the COBRA timeframes, roughly one year depending on your state. I think that ACA protections would allow me to get quality insurance, but it makes me angry that I could lose insurance that I’ve paid for over the last 10 plus years. Short answer is that US medical care might be the best in the world.
2. Probably not, but there is a significant number of people who are being caught in a cycle of debt, family debt, and poverty because our system does not provide universal care, and does not protect individuals from predatory billing.
My questions to you?
1 What do you think are the main problems with our system?
2 Do you think a system that allows the following scenario is just? My sister had high quality insurance from the day she was born until she graduated college in 4 year. She immediately go a job that provided high quality insurance without ever having a gap. A few years later she contracted a chronic illness that require expensive drugs. Twice she was sick enough that she could not work. During that time my parents paid for COBRA until the COBRA time limit ran out. We shopped for insurance and could not find insurance that covered her illness in the private markets. Both times she managed to get healthy enough to get a new job that provide insurance. If she wasn’t able to find a new job, my parents and I would have bankrupted ourselves paying for her treatment. That was prior to ACA. Her health has been stable since ACA. Do you think a system that took away the insurance she paid for because she was too sick to work is just. I don’t mean to be dramatic, but I think most people don’t understand how vulnerable they are.
20. February 2021 at 04:46
@bb
So I’ll answer your questions (I think we basically agree), but let me first confirm and then ask another question.
You agree that….
1. Medical care in the U.S. is the best in world.
2. There is NOT a significant number of people in the U.S. who are not able to get critical medical care.
So the next question is..
3. How many people in the U.S. do you think incur significant financial hardship because of medical expenses?
Glad to hear your sister is doing better.
20. February 2021 at 07:25
One feature of Singapore’s healthcare system is that the government effectively controls a lot of pricing. For example, see the “How Singapore controls costs” section of https://www.healthline.com/health-news/us-can-learn-from-singapore-health-system#How-Singapore-controls-costs
Studies show that US healthcare is so expensive largely because prices are very high (rather than excessive use). This is a result of things like provider market power (mergers, licensing restrictions, immigration restrictions, etc.), lack of normal market functions (e.g., even if you could shop for pricing, judging quality is non-trivial and shopping after a heart attack or other emergency isn’t possible). Single payer has the advantage of tremendous bargaining (provided it isn’t prevented from bargaining).
20. February 2021 at 09:47
Carl, Yup.
JHE, I agree about the GOP.
dtoh, First of all, I was responding to your false claims about Japan and Singapore. Since you didn’t raise the point again, I assume you now agree with me.
As to why HSAs are better than taxes, it’s all about incentive effects. Taxes discourage working to a greater extent than HSA contributions, which are “your money”.
As for the US system, it would take years to list all the problems, including regulations that lead to much higher costs, restrictions on drug use, wasteful subsidies, etc. It’s one of the worst systems in the world in terms of efficiency.
Jose, You said:
“The public favoring conviction this second round was 52%, but the constitution meant this vote to need qualified majority of 2/3 of votes, therefore, technically speaking, it is obvious the public, according to the constitution, did not favor conviction beyond any doubt.”
LOL. Now you are saying the senators should vote the minority view?
bb, I also would not want to live in Singapore. But I wish we had their tax and health care systems. Total spending is 5% of GDP.
20. February 2021 at 10:26
dtoh,
“1. Medical care in the U.S. is the best in world.”
No, we do not have the best results in the world. But I don’t view quality of care as a weakness of our system. And I prefer our quality because I think it gives me more decision making and I’m probably just more comfortable with the familiar.
“2. There is NOT a significant number of people in the U.S. who are not able to get critical medical care.”
I think that’s true.
So the next question is..
“3. How many people in the U.S. do you think incur significant financial hardship because of medical expenses?”
I think this number is very significant. You didn’t define financial hardship. Anything that damages your credit rating. Debt that takes years to pay off. Bankruptcy obviously. Being forced to borrow significant amounts of money from friends and family. Having to ration your own treatments. IMO, none of these things should happen to someone who has responsibly maintained continuous coverage.
20. February 2021 at 13:52
Scott
What false claims about Japan and Singapore?
20. February 2021 at 14:12
Scott,
I agree with you that the U.S. overspends in aggregate, but I’m not sure I agree with you about efficiency.
Higher cost does necessarily equal inefficiency. If you have a system where costs are controlled through rationing or monopoly purchasing, that’s going to be less efficient than a system with higher costs that are set through market mechanisms.
Singapore’s MediSave is not the same as HSAs. The contributions are mandatory in Singapore, and funds can’t be withdrawn or used for anything other then medical expenses. I don’t think even the Singaporeans are duped into thinking it’s “their money.”
20. February 2021 at 15:20
@bb
1. I don’t think you will find any data showing other countries have better medical care outcomes than the U.S. Better health outcomes? Yes, but that’s not because of better medical care.
2. Agreed.
3. This is an important question, because it tells us how serious the problem is, how much effort will be required to solve it, and how hard it will be to solve it.
A couple of observations.
1. Buying a new car hurts your credit rating.
2. At current prices, the average cost of medical care over the lifetime of a person will be in the range of $750k to $1 million. So I would not categorize spending anything less than $10 to $12k a year on taxes, HSAs, premiums, or actual medical expenses as a financial hardship…. or at least not one that is going to be solved by the wave of the political/policy wand.
3. If you’re poor you’re not won’t face hardship because you’re covered by Medicaid (or other programs.)
4. If you’re old you’re covered by Medicare.
5. If you have a full time job, you’re almost certainly covered at work.
6. If you don’t have any net assets to start with, you won’t face any hardship because the hospital/credit collection agency will just write off the debt.
7. So basically the problem is limited to a pretty small group of people who a) aren’t old, b) aren’t poor, c) have assets, d) don’t have insurance, and d) incur very high medical expense.
I don’t know the exact number, but as best I can tell (from looking pretty diligently), the number of people annually affected by this problem is probably a few hundred thousand so roughly 0.1% of the population. So while it’s a serious problem we should try to solve, and while it’s certainly emotive and useful from a political point of view, it’s not a huge societal problem in dollar terms or one which in itself would justify huge reforms to the overall system of paying for medical expenses.
Thoughts?
20. February 2021 at 18:29
Dtoh,
I don’t know that you’ve answered my questions.
1. What do you think are the significant problems with our current system?
2. Do you think it is acceptable that people lose their employer provided insurance, which they pay for, if they are too sick to work?
3. Do you think the ACA was an improvement, e.g. a good law.
To your observations:
1. Buying a new car will not damage your credit rating in a significant way. Bad example.
2. Lots of things are hard. Laws could be enacted that protect against surprise billing. The ACA solved the problem of pre-existing conditions. We put a drone on Mars.
3. That’s not entirely true, and it is only mostly true because of the ACA.
4. I agree and that’s great. And it covers drugs thank to changes made by GW- again, we are capable of solving problems.
5. That’s not entirely true, but it’s more true now because of the ACA.
6. That’s not true. Hospitals take people to court all the time. And if they write off the debt, the patients credit rating is destroyed- not comparable to buying a new car.
7. The “don’t have insurance” statement is false. My whole point is that through surpsise billing and the ability of insurance companies to drop you when you are too sick to work, causes unfair hardship. Even if you have assets, you should not lose your assets because the ambulance took you to the wrong hospital.
Finally, I think your definition of hardship is too narrow, but still 0.1% annually is not a small number. How many people are impacted over the course of a lifetime if .1% are impacted annually. Only .7% of Americans pay the estate tax over a lifetime, which a lot of folks on this site think is worth fixing.
20. February 2021 at 20:49
@bb
So I think the two big problems with medical care in the U.S. are.
1. In aggregate we spend too much on medical care.
2. We have people who face severe financial hardship because of high medical bills. (So yes, I do agree with you on this. I just don’t think a radical solution like ACA was needed to try to solve it.)
But that’s just medical care. If we are talking about health, I think the big problems in order are: obesity, automobile accidents, and gun violence. If we want to improve health, focusing on these issues will do a lot more than tinkering with the medical care system.
Also
I don’t think you’re right on number 3.
I don’t think ACA moved the needle much on number 5. The percentage of the working age population insured by employers rose very slightly, but a strong economy and a tight job market are also reasonable explanations for the increase.
Don’t really want to split hairs on 6, but I guess I would put it this way. If you have no assets and incur high medical expenses, it probably will have very little impact on your future consumption.
On employer provided health insurance, in most cases (for about 60% of workers), the insurance company is not the insurer, it’s the employer. The insurance company is usually just the administrator of the plan. So it’s usually not the insurance company dropping you…. it’s your former employer.
20. February 2021 at 21:33
@dtdoh,
I’ll clarify my question, do you think a system that allows your insurance company or your employer to drop you and your family if you are too sick to work is a just system? Particularly, if after being dropped it is impossible for you to obtain private insurance due to pre-existing conditions which you clearly have if you can’t work? And we both agree that private insurance is the only option for working age people unless they are poor. Assume this person was not poor and would prefer not to become poor in order to have health insurance for him/her and family.
20. February 2021 at 22:23
@bb
I’m not sure whether it’s fair or not. Is it a fair system where everyone in the US, rich or poor, young or old, gets fantastic medical care while most people in the rest of the world do not?
Do I think it’s a good system in the US? No I do not.
20. February 2021 at 22:39
@bb
I don’t know if it’s a fair system. Is it a fair system where everyone in the United States, rich or poor, young or old, gets fantastic medical care while most people in the rest of the world do not.
Do I think it’s a good system in the US? No I do not.
21. February 2021 at 10:05
dtoh, You said:
“What false claims about Japan and Singapore?”
That health care spending is higher in Singapore. It’s much higher in Japan, both public and total.
You said:
“that’s going to be less efficient than a system with higher costs that are set through market mechanisms.”
I’d be fine with the US spending 18% of GDP if it went through a market mechanism, but the system is 90% socialist. Half is paid for by the government, and the other half is so heavily regulated and subsidized that it’s effectively socialist.
You said:
I don’t think even the Singaporeans are duped into thinking it’s “their money.””
I don’t think you understand how their system works. I’d encourage you to read up on it.
https://www.healthaffairs.org/doi/10.1377/hlthaff.14.2.267
21. February 2021 at 13:45
Scott,
No that is not what I said. I said “Singapore spends more per capita than Japan.”
And yes or course Japan spends more on health care than Singapore. The population in Japan is 20 times higher.
And before you correct me again, no I did not say Singapore spends more per capita as s percentage of GDP.
And, I do understand how the Singapore system works.
21. February 2021 at 13:49
Scott,
And BTW, I am not disagreeing with you at all that the US overspends. I think overspending is the biggest problem with the U.S. medical care system.
22. February 2021 at 14:56
dtoh, You said:
I said “Singapore spends more per capita than Japan.”
Wrong. The World Bank says Japan spend 10.95% of GDP while Singapore spends 4.46%:
https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS
Singapore’s per capita GDP is less than 50% higher than Japan. So even in nominal terms Japan spends more.
You said:
“And, I do understand how the Singapore system works.
Then why do you imply that health savings accounts are not effective in discouraging excess spending? Singapore residents benefit from not spending money from their HSAs.
22. February 2021 at 16:00
Scott,
Read what I said. I did not not say “Singapore spends more per capita AS PERCENT of GDP”. I said “Singapore spends more per capita.”
And I said that deliberately and specifically because Singapore is a city state with high per capita income (i.e. a big denominator) so that the more relevant comparison is how much each country is spending in actual dollars per person. If you want to compare as percent of GDP, you need to compare Singapore not with Japan but with Tokyo (which has similar per capita income to Singapore.) If you do that, you will see they spend similar amounts as a percentage of GDP.
And Japan does it with…
1. 2.5x more old people on a percentage basis.
2. 5x the number of traffic accidents (trauma care being a major component of medical care costs)
3. And no sub-caste of immigrant workers who get sub-standard or no care and make up 30% of the population.
So again I ask “what makes you think Singapore has a good system?”
22. February 2021 at 16:07
Scott,
“Then why do you imply that health savings accounts are not effective in discouraging excess spending?”
Scott, I never implied that. I said, “Singapore’s MediSave is not the same as HSAs.”
HSAs are very effective in discouraging excess spending.
Medisave is different and while it has some efficacy in discouraging spending, it is less (considerably less IMHO) than HSAs because contributions are mandatory, and the amounts can’t be withdrawn or used for other purposes by the contributor.
23. February 2021 at 05:03
Scott,
Correction and sorry I was looking at the wrong GDP numbers for Singapore. Singapore actually spends a 1/3 less per capita than Japan.
That said, the difference in expenditures is fully explained by differences age distribution alone. The percentage of population over 65 is nearly 2.5 times higher in Japan than in Singapore and accounts for more than 60% of total medical spending in Japan. (Comparisons with other countries will also yield similar results.)
After adjusting for age (to say nothing of the other differences I mentioned early), I don’t think there’s any evidence that the Singapore system (which is basically government rationing of care) has done better in controlling costs than any of the other systems of government rationing which are employed in other countries.
And as we have noted earlier, a system of rationing is inherently inefficient.
So I would summarize the Singapore system of medical care by saying, they employ an inherently inefficient method of resource allocation, and their implementation is not notably better than any of the other government run medical care systems in other countries.
23. February 2021 at 08:54
dtoh, Glad to see you finally admit you were wrong about Japan and Singapore per capita spending.
In any case, per capita spending is a meaningless number for international comparisons, share of GDP is a much more useful figure, so there’s no point in even discussing the issue further. I was merely pointing out that you used false data.
I still disagree on the MSA issue. What matters is what happens at the margin, and at the margin any expenditure by a Singapore resident comes out of their pocket, just as in the US with HSAs.
I also don’t view Singapore’s system as any less market oriented than the US system, and the difference between 4.5% of GDP and 18% of GDP is not due to the slightly higher fraction of US residents over age 65. I can’t comment on Japan’s system.
As far as “rationing”, when taxpayers are paying for health care it should be rationed. That’s one problem with our system. If you pay privately, then spend all you wish (as with plastic surgery.)
23. February 2021 at 14:28
Scott,
We’re not debating whether Singapore has a better system than the U.S. You said the “best” system full stop is the Singapore system.
And if you want to compare on the basis of percent of GDP spent on healthcare, you need to do so on an apples to apples basis against a comparable demographic urban center like Tokyo
Per capita health care spending as percent of GDP in Tokyo is 5.2% (Yen 415k spending/8,000k income). Taking into account the fact that Singapore has a very small elderly population (12% versus 24% in Tokyo) and the fact Singapore provides substandard treatment to 30% of its population, there’s zero basis for the claim that Singapore has the best system judging by percent of GDP spent on healthcare.
24. February 2021 at 14:08
dtoh, I won’t comment as I have no idea where the Tokyo data comes from.
But I’ll concede that Singapore is merely the best system that I’m familiar with.
I doubt they provide substandard care.
24. February 2021 at 19:57
Scott
Tokyo GDP data is from the Tokyo Metropolitan Government https://www.metro.tokyo.lg.jp/tosei/hodohappyo/press/2019/12/25/16.html
Tokyo health care expenditures are from the Japanese Ministry of Health Labor and Welfare.
Even for their own citizens and permanent residents, Singapore has substandard care. Like Japan, they have the same problem as the U.S., which is that instead of using markets to allocate, they’re using government bureaucrats and policies to allocate medical resources. The U.S. overspends and both Japan and Singapore under-spend.
Hospital costs are the biggest component of medical costs, and the way both Singapore and Japan keep costs down (i.e. under-spend) is to put hospital patients in wards with 10 to 12 patients to a room, no TV and no air conditioning. In the U.S, semi-private rooms even for the Medicaid patients is considered inhumane these days.
I’m less familiar with Singapore, but in Japan they also save costs by a) providing no medical care in ambulances (only transport). It saves a lot of money when the most serious trauma cases (the ones which will require the most expensive treatment) die before they get to the hospital, b) delaying new (read expensive) drug approval by 8 years compared to the U.S. and Europe.
I don’t think the U.S. system is great, but I would much rather get seriously injured or sick in the U.S. then in Japan or Singapore.
24. February 2021 at 19:59
MHLW data here https://www.mhlw.go.jp/toukei/saikin/hw/k-iryohi/17/dl/data.pdf