by Madeleine Kando
This is not a new essay, but after rereading it, I found it so appropriate that I couldn't help but republish it.
Like many of us, I am confused by the ‘single payer’ health plan that Bernie Sanders proposes. Health care is confusing to begin with unless you live somewhere where there is no health care at all. In fact, out of the 200 countries or so in the world, only 40 provide some form of health insurance to their citizens.
The countries that do offer health care all have a different system in place. Some have a single payer system, funded through taxes, just like the police force or public libraries. These systems tend to have low costs, because the government controls what doctors can do and what they can charge. Great Britain, Spain, most of Scandinavia and New Zealand, Hong Kong and Cuba have a single payer system. This system is what Sanders proposes.
Other countries have an employer/employee funded system, familiar to Americans. It uses an insurance system that covers everybody, is tightly regulated by government to control cost and provides bargaining power. Germany, France, Belgium, the Netherlands, Japan, Switzerland and Latin America has this type of system.
Some countries use a hybrid system of private-sector providers, but payment comes from a government-run insurance program that every citizen pays into. Since there's no need for marketing, no financial motive to deny claims and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style for-profit insurance. Canada, Taiwan South Korea have this system.
The ‘out of pocket model’ covers most countries in the world, countries that are too poor and too disorganized to provide medical care to their population. The rich get medical care, the poor stay sick or die.
America has elements of all these systems: the VA is like Britain, for Americans over the age of 65 we are like Canada, working Americans get insurance on the job, like in Germany, and for too many Americans who have no health insurance, we are like Cambodia or Burkina Faso. In that sense, Sander’s proposal would do away with all these separate systems and on paper at least; this would be much simpler, fairer and cheaper.
Bernie's plan would cover everything: inpatient and outpatient care, preventative to emergency care, primary care to specialty care, vision, hearing, mental, prescription medications, medical equipment, supplies, diagnostics and treatments. Patients will be able to choose a health care provider without worrying about in- or out of network or try to figure out how they can afford the out-of-pocket costs.
There is, in fact, no country that offers coverage for all these services at no extra cost. The most successful health care systems in Europe are not single payer, but hybrid systems, consisting of private insurance companies competing with each other. The State however, controls how much they can charge and what they should offer.
They are obligated to offer ‘basic coverage’ as public insurance (which covers much more than what Obamacare is dictating) and lets the companies compete with each other in the ‘supplemental’ market, just like Medicare does with Medigap.
The Dutch government for example, sets prices on treatments, drugs, hospital stays, etc. If the pharmaceutical companies don’t like it, they cannot sell their products in Holland. Companies that have a high-risk pool get extra funding to make up for the difference, so there is no incentive to deny coverage to sick people.
Holland used to have a bureaucratic single payer system, but in 2006 the country adopted a much simpler, regulated private sector Universal system: one type of mandatory basic package, comparable to Obamacare’s silver plan.
Even though Holland has done away with the public option, it only did so because the industry overall is much more regulated. Here, the public option would provide a healthy price control through competition.
What Obamacare has done is set down basic rules against discrimination, a bit like the Civil Rights movement of healthcare. But it hasn’t addressed the problem of the ‘for profit’ nature of the business. Insurance companies have found a way to make profit in other areas that Obamacare is not covering: deductibles, premiums, new restrictions on services, etc.
Sanders would be wise to remember that the only reason that Obamacare passed and where Hillarycare (in 1993) failed is because Obama included the Insurance companies at the negotiation table and the White House took a hands-off approach. There was also the specter of the Public Option, which made the Insurance Companies favor Obamacare.
If Sanders tried to ram his proposal through for a single payer system, chances are he would be opposed by hospitals, medical groups, pharmaceutical companies and the Courts might side with opponents of government regulation of the industry.
In most countries the process towards universal affordable health insurance has been slow and difficult. There will always be time to revive the public option, which more than likely will eventually lead to some form of single payer system. But undoing everything that took so much effort (and luck) to win, is in my opinion, foolish. leave comment here
4 comments:
Well said! I dispute that there is any "undoing" involved. I'm ready to see a full court press on the industries (they ARE industries) you cite.
This is a very good comparative overview of the situation.
When governments are the third party payers, prices get held down by force and there is less innovation in medical care. When insurance companies are the third party payer, prices tend to escalate, which has happened to Obamacare. One of the problems with contemporary insurance plans that Obamacare addresses is the pre-existing condition requirement. That problem was largely solved before employer plans came into existence, because people could have a plan for life and take it with them and new conditions would never affect the plan. But if you buy a plan when you have a condition, insurance companies will not want to write the plan because they are sure to lose money.
I think prices would go down if you eliminated employer plans and developed a system where people purchased tax-exempt life-long plans, that employers had an option to reimburse. When a person fails to have a plan then you go onto a safety net system something like the VA plan that gets rationed. If you allow the market to reduce prices for the average person by eliminating impersonal third-party payers and requirements to add the costs of the uninsured to those transactions, then in all likelihood the government would be able to spot where it is paying highly inflated costs in its own system and the VA and Medicare prices could come down as well.
Thank you for your very thoughtful comment Gordon. Here are some counterpoints:
The reason America is leading in medical innovation is not because of its for profit system, but because it is a large country with many high IQ individuals. Israel is actually more innovative per capita and boasts a fully universal health care system.
The problem of pre-existing conditions could be solved if the government would subsidize insurance companies with high-risk pools, just like they do in Holland. There would be no incentive to raise premiums.
I am not sure what you mean by ‘plan for life’. Employer based group insurance is the most effective way to bargain for lower prices is always better than individual plans that then need to be reimbursed, especially if it is just an option.
Universal healthcare cannot exist without he individual mandate. The best way to reduce prices for the average person is to reinstate the public option. The ‘market’ will not do that, since health care is not a product of choice. It is like letting the market decide who could have access to drinking water.
Thank you for the explanations!
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