CBO scores the Kennedy-Dodd bill
16 June
The Congressional Budget Office has released a preliminary estimate (“score”) of the draft Kennedy-Dodd health care bill. Some in the press are reporting that this is a “$1 trillion bill.” This poorly explains the true budgetary impact of the bill for several reasons. The bill would increase spending by more than $1.3 trillion (that’s “thirteen hundred billion dollars”) over ten years, and even that understates the impact because the bill phases in over the first five years.
I explained last week that the bill is incomplete. I expect a later version of this text will be marked up by the Senate Health, Education, Labor, and Pensions (HELP) committee, and then combined on the Senate floor with a companion bill marked up by the Senate Finance Committee. Even in its final form the HELP Committee text will be only half a bill. I further expect the HELP Committee bill will end up increasing the budget deficit, while the “pay-fors” (offsets) will come from the Finance Committee bill, which it appears will raise taxes and cut Medicare and Medicaid spending.
New health care entitlement spending
CBO has estimated the effect on the federal budget of the new subsidy component, which I described last week:
People from 150% of poverty up to 500% (!!) would get their health insurance subsidized (on a sliding scale). If this were in effect in 2009, a family of four with income of $110,000 would get a small subsidy. The bill does not indicate the source of funds to finance these subsidies.
There are at least six other major components of the bill that have not yet been scored by CBO. Part of this is due to the time crunch, but most of it is because the Kennedy-Dodd staff have not yet given CBO specific enough legislative language for CBO to do their thing.
- The budgetary effects of neither the individual mandate nor the employer mandate are included in this score. I think CBO will find these provisions would raise revenues for the government and reduce the deficit. While the leaked draft of Kennedy-Dodd was specific about the employer mandate, the official version has just the placeholder language, “Policy under discussion.” Both mandates leave wide discretion for the Secretaries of Treasury and HHS to create a level and structure of taxation “to accomplish the goal of enhancing participation in qualifying coverage.” It is extremely difficult for CBO and their tax counterparts, the Joint Committee on Taxation (JCT) staff, to estimate something like this.
- The estimate does not include the budgetary cost of expanding Medicaid to childless adults with income below 150% of the poverty line. I expect that this will add hundreds of billions of dollars to the cost over the next decade.
- It does not include the requirement that health plans define “children” as dependents up to age 27. I expect this will raise costs.
- It does not include the effects of the Medical Advisory Council’s ability to define benefits, or the requirements that plans rebate premiums to the insured. I think this too will raise costs.
- It does not include the budget effect of having a “public plan option.”
- There are a bunch of other programs in the bill, including a new disability program and lots of new public health programs.
What we have is a score of two provisions — the new subsidies for people between 150% and 500% of poverty to buy health insurance, and subsidies to small businesses with low-wage employees. We can learn a lot from the table on page 10 of CBO’s estimate. Press coverage is focusing on the “one trillion” number for the net deficit impact, making the common mistake of losing important information by ignoring the gross components of that net number. I am more concerned with the size of the new health care entitlement spending, which is $1.3 trillion over the next ten years.
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|
2010-2019 total |
| Exchange subsidies | 1,279 |
| Small business subsidies | 60 |
| Payments by uninsured individuals | -2 |
| Medicaid/SCHIP outlays | -38 |
| Tax effects on deficit | -257 |
| Net deficit impact | 1,042 |
95% of the spending, $1,279 billion over the next ten years, comes from the new subsidies for individuals. This spending does not begin until year 3 (2012), and it’s not fully effective until year 6 (2015). This is a normal effect of implementing such a huge and complex policy — it takes several years to phase in. While the $1,279 billion represents the actual effect on the federal budget of this bill, we can see that the phase-in reduces the cost quite significantly. The green area is 71% of the area under the blue line, which is my estimate of the hypothetical cost of a bill that were it fully effective on day 1. I am not arguing that the “real” cost is the area under the blue line, but instead that focusing only on the 10-year total disguises the true long-term cost of this new entitlement spending. The Kennedy-Dodd draft creates new health spending entitlements that would grow 6.7% per year, faster than our economy, which CBO projects to grow about 4% per year (nominal) in the long run. This means the new health entitlement spending would eat up a larger share of the economy over time.
Effect on private sector spending
CBO has not estimated the effect of this bill on private sector health care spending. That’s not their core mission, but I hope they do so when they have a more fully specified bill. It is a critical metric identified by the President as one of his key tests for an acceptable bill, and it’s a core element of my four-part test for measuring health care cost control.
Effect on health insurance coverage
I will let the pictures tell the story. Here is a before and after of the effects of implementing the Kennedy-Dodd bill. I have chosen 2015, the first year in which the subsidies would have their full effect. Pictures for succeeding years would look similar. I have written before that I think the 51 million figure (now 46 million) overstates the problem to be solved.
And here is the effect of the Kennedy-Dodd bill:
You can see that Kennedy-Dodd would mean that 16 million otherwise uninsured people would get health insurance through the new exchanges, as a result of the subsidies.
In addition, another 22 million people who will otherwise have health insurance will take those subsidies. Three million are a shift from one taxpayer-financed program (Medicaid or SCHIP) to another (the new exchanges). But CBO estimates that 19 million people who are now using their own resources will take advantage of the new subsidies and get health insurance through the exchanges.
This is the problem with creating a new subsidy for something that people are already doing. Analysts say that the new taxpayer subsidies “crowd out” private spending. These people are better off, in that they now have funds available to spend on other things. But if the goal is to reduce the number of uninsured, it is inefficient because half the people benefiting from the new spending are substituting public dollars for private ones.
This makes the cost per newly insured numbers look bad. If you look at just the effects on spending, it’s more than $11,400 per newly insured person. Even if you take into account the higher tax revenues that result from the movement out of employer-based health insurance, the net cost to the taxpayer is still more than $9,100 per newly insured person.
I will soon apply my four-part test to this preliminary Kennedy-Dodd draft, and will update these estimates as the policy develops.
(photo credit: Referees in the Tunnel by Scott Abelman)
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“What is your solution to the most expensive health care system in the world by double?”
Have people pay for more of their own care, there-by making health care providers respond to the demand of consumers and consumers responsible for their own cost-benefit analysis. Health insurance should only cover rare and unforseen medical care.
“what do suggest we do about situations such as [Deamonte Driver] below?”
Health care vouchers for those below the “poverty line”, akin to food stamps. Or perhaps a health-savings account that the government contributes to. I’m curious why you cite an example of the failings of a single-payer health care scheme (Medicaid) as evidence in support of single-payer health care schemes?
“My point is there are many many Deamonte’s out there who could lead much more productive lives with access to health care before they became deathly ill. And it is rather obvious that this is no guarantee that Mom will take him to the doctor.”
Deamonte had access to health care. According to the article every time his mother sought treatment for him he was accommodated. The second line of the article should read, “His mother could have saved him.” It’s humorous that most of the “If only’s …” ignore Mrs. Driver’s poor choices.
“And the deal breaker for Deamonte was his Mom couldn’t afford the $80. An absolute national disgrace for the greatest country the world has ever known.”
The fact that Deamonte has an inadequate mother is a disgrace for his mother not for the nation. If people in abject poverty can save and plan ahead (as chronicled in Portfolios of the Poor, highlighted here http://econlog.econlib.org/archives/2009/06/thumbs_up_for_p.html ), then Mrs. Driver has no excuse. From the article it appears that Mrs. Driver had no intention of taking him to a dentist since he didn’t complain, unlike one of his (3+) brothers.
“The CBO’s findings are for an incomplete piece of legislation, making the cost-per-coverage estimates much worse than they will ultimately be.”
From Mr. Hennessey’s review above it seems item #1 would reduce costs (by raising revenues, ie. taxes), but then the other unsocred items seem to increase costs. You refer to a HuffPo article that points out item #1, but also ignores the other unscored portions that would also increase costs. So you complain about CBO / Republican’s “cherry picking” by doing “cherry picking” of your own, how enlightened.
“Though clearly not an endorsement it is misleading to say “White House distances self”. I think Jake Tapper is a right wing hack and not a serious journalist.”
This is really hilarious. The HuffPo article to cite by Sam Stein reaches the same conclusion, “Indeed, in private, White House officials were shaking their head at the development. Publicly, press secretary Robert Gibbs sought to distance the president from the legislation. In a statement after the CBO report release, he said, “this is not the Administration’s bill.”" Are Mr. Stein and HuffPo “right wing hacks” as well?
“I would have gladly helped Deamonte. And this is why I support a single payer health care system.”
So go help them. Why are you here excoriating others for not letting you grope about in their wallets freely, when you could be “out there” helping the Deamonte’s of the world? Why don’t you start a charity, start a free dental clinic, start an education program for low income mothers, start a collection drive for toothbrushes and toothpaste for low income children? Anything aside from making it the government’s responsibility to do any / all of the above. Why not try to solve the problem instead of punting it to the government.
J
Solidus,
It is quite a bit easier to address one point at a time. If you want a serious discussion I’d suggest trying it.
So I’ll pick a few.
“I would have gladly helped Deamonte. And this is why I support a single payer health care system.”
So go help them.
I am. Their are countless thousands of Deamontes out there. Instead of picking one I choose to help them all.
“The fact that Deamonte has an inadequate mother is a disgrace for his mother not for the nation.”
This one pissed me off. She was poor. Nothing else. And if a banning is in order so be it but you are a j****** for speculating otherwise. What is your experience in raising three kids with no money?
“This is really hilarious. The HuffPo article to cite by Sam Stein reaches the same conclusion, “Indeed, in private, White House officials were shaking their head at the development.”
Of course they were. It was fodder for the right wingers. I stand by my words. The CBO was based on incomplete data.
“What is your solution to the most expensive health care system in the world by double?”
Have people pay for more of their own care,
Great idea. Make the patient negotiate price whilst bleeding to death or in agony form a kidney stone. Ot when Dad lays in pain from cancer Mom and the kids can start haggling over price.
Your post was disingenuous and you know it.
JHarp;
“It is quite a bit easier to address one point at a time. If you want a serious discussion I’d suggest trying it.”
I am capable of addressing all of your points. Perhaps it would behoove you to make fewer assertions if you cannot adequately defend them all.
“I am. Their are countless thousands of Deamontes out there. Instead of picking one I choose to help them all.”
Again, why is your method of helping them to punt the problem to the government instead of taking an active role? “Let someone else help, and someone else pay” is not much of a solution, particularly when it is as spectacularly ineffective as Deamonte’s story demonstrates. Do you think spending 1 hour in a homeless shelter showing the residents the proper way to brush their teeth and handing out toothbrushes would do more or less to help “the Deamontes of the world” than spending 1 hour debating here with me?
“This one pissed me off. She was poor. Nothing else. And if a banning is in order so be it but you are a jackass for speculating otherwise. What is your experience in raising three kids with no money?”
I’m not speculating about anything. People much poorer than Mrs. Davis are capable of saving as the evidence I provided demonstrates, she has no excuse. Regardless, as the article you cited shows every time Mrs. Davis sought care for Deamonte he received it; the fact that she was poor was not a barrier to Deamonte receiving his $80 tooth extraction. Below cost reimbursement rates (and mountains of paperwork) are insufficient incentive for dentists to provide care (doubly so for specialists like oral surgeons). Yet this “government negotiated savings” on procedures is often a primary selling point of single-payer schemes. Holding up an example of how this arrangement fails the people it purports to help is hardly supportive of your argument.
“Of course they were. It was fodder for the right wingers. I stand by my words. The CBO was based on incomplete data.”
I do not disagree that the CBO report was based on an incomplete legislative bill. I disagree with your fantasy that the only parts of the bill missing were the parts that reduce costs. Mr. Hennessey ably laid out the components missing, one item (#1) of six reduces costs the rest increase costs. Do you have any evidence that the missing portions are all revenue increasing (or neutral)?
I also find it hilarious that you continue to demonstrate your blinders by stopping my quote just before the part that addresses your previous concerns. Is evidence of your hypocrisy blinding somehow?
“Great idea. Make the patient negotiate price whilst bleeding to death or in agony form a kidney stone. Ot when Dad lays in pain from cancer Mom and the kids can start haggling over price.”
Wow, and you call me disingenuous. Consumers will not “negotiate while bleeding” they will review performance ratings of local hospitals from Consumer Reports, or some government rating agency (like the DoT crash safety rating system), or from some other service created by an enterprising individual, and they will choose one to be their primary hospital IN ADVANCE. Then consumers will use similar rating information to choose a health insurance plan that works with the hospital or doctor of their choice. Regardless, emergency care neatly fits under the “rare and unforeseen” condition that health insurance should cover IMO.
Mom and kids will certainly “shop around” for doctors who can provide the best and most affordable care for their father; the same way they would “shop around” for a quality attorney if Dad were on trial. They may not haggle over the price, but the pricing plans of the various doctors will play a large part in their decision. You hardly ever haggle here in the US, but that doesn’t stop people from being price sensitive when spending their own money.
My responses are neither ignoble, deceptive, uncandid, nor do I feign naivete; so your label of disingenuous is not appropriate.
J
What is missing from this analysis is the cost of the uninsured NOW. I know, George, they just go to the emergency room. Aside from that being the least efficient method of treatment from a health standpoint, IT’S NOT FREE. It’s free to THEM, but the taxpayers are picking up the tab for it in the form of increased state and local taxes to support municipal hospitals (the ones which most often treat the uninsured) and the insured, of course, pay for it in the form of higher medical costs that the hospitals pass on to them. A subsidized federal program would cost the taxpayers money, but it would also lower the state and local tax burden AND it would lower the burden on employer-based health plans (and the co-payments workers make, which have been increasing dramatically in the last 5-10 years) since the hospitals would now be receiving insurance payments for those who are now uninsured instead of having to raise fees on the insured to cover them.
And, in addition, making the regular medical system (as opposed to the emergency room) available to the presently uninsured would result in fewer health problems, since it would expose them to preventive care and earlier interventions.
Will this program bankrupt the country? How? We’re paying for the uninsured NOW, aren’t we? The proposed program simply shifts the costs. For taxpayers, the cost will be shifted from state and local taxes (which are highly regressive, for the most part) onto Federal taxes. For 95 out of 100 Americans, that LOWERS that part of the cost marginally. And for those already insured, it almost certainly means lower premiums because a) a federal program would force private insurance companies to lower rates, and b) hospitals will no longer have the costs of treating the uninsured (who presently pay zero) and can lower costs for the insured. Again, most Americans who presently have health insurance will benefit.
The essence of the problem of health care is stated by this comparison: if you can afford a BMW and I can only afford a Chevy, nobody believes that I’m somehow “entitled” to the BMW. But if you can afford the cost of an open heart surgery that is necessary to save your life, and I cannot, EVERYBODY (with the exception of a few moral bankrupts) believes that I’m entitled to that surgery. As long as that’s the case, the only issue which remains is how to divvy up the cost of paying for that open heart surgery for those who can’t afford it. The present system passes it on to state and local taxpayers and to the insured; the proposed system spreads it out more equitably by working through the federal income tax (a more progressive tax) and by shifting the costs from the insured onto the entire tax base.
The REAL objection of “conservatives” to the program is that it makes the wealthy pay a larger share of the cost of treating those who are presetnly uninsured than the present system does. The only other objection comes from the health insurance industry, which sees its profits going down and possibly out. But what justification is there for an industry which can be replaced by a more efficient system run by the government? Why is it that “conservatives” object to picking up the tab for subsidizing health insurance for someone who cannot afford it, but have no problem with people who ARE paying for their health insurance being overcharged by hospitals and doctors in order to cover the cost of treating the uninsured?
Solidus”
“Again, why is your method of helping them to punt the problem to the government instead of taking an active role?”
Because the government (single payer) is best suited for the job. Witness the 29 other industrialized who use it successfully.
And witness the one who doesn’t. Us. Your private plan is and has been in place for decades and is a monumental failure.
The_Slasher14,
“Will this program bankrupt the country? How? We’re paying for the uninsured NOW, aren’t we?”
Exactly. It will not bankrupt the country. And we are treating and paying for the uninsured in the most expensive fashion possible. Preventative care is ignored. And preventative care saves dollars.
“The proposed program simply shifts the costs”
And most importantly the proposed program LOWERS costs.
Few people say it will bankrupt the country but it will raise costs. If you want to argue that raising costs is OK, that’s fine, go ahead and make the argument. The fact is that the people promoting the bill are selling it as necessary to sustain the economy because it will lower costs and that is disingenuous.
It’s great to cite specific examples where preventative care reduces costs and they certainly exist but the primary drivers of the cost of the US healthcare system in my opinion are not lack of preventative care, they are two things that are closely related, insurance and innovation.
Insurance is a key driver of cost inflation because it makes people cost insenstive for the things that it provides. Catastrophic insurance, as a way to manage spiky costs, is good…it’s the equivalent of auto insurance. Insurance for basic goods and services is bad because it increases usage. More important by far is the cost of innovation which is disproportionately paid for globally by people in the US. Drug costs are higher, and newer procedures are much more readily available because of the fact that our system allows companies to be compensated at higher rates. Drop the rates, which you must do to lower costs, since you will almost surely increase the quantity of services provided, and you reduce innovation. Maybe that’s OK, maybe not. It probably depends who you are but to pretend that you can increase access, lower cost, and have no impact on quality over time is simply crazy.
By the way, most countries with single payer systems control costs by rationing. It’s a very effective way to control costs but does lower access/quality. Again, if that’s what you want, we can debate but pretending there are no tradeoffs in life isn’t a good way to make decisions.
Steve
Commented on June 17, 2009 at 11:52 am |
“Few people say it will bankrupt the country but it will raise costs.”
Flat out false. It will lower costs.
THAT, is the entire purpose of this exercise.
Witness 29 other industrialized countries who spend about 1/2 per person on health care than us. And deliver the same level of care.
Why is it Steve, that we are the only ones without some sort of single payer? No one, not one other country, has a system that even remotely resembles ours. And they all cover everyone for about 1/2 of what we spend. For the same level of care.
Did you actually read the post jharp. I covered the drivers of cost and you didn’t respond except to say “they spend less for equivalent care”. The care isn’t equivalent and they spend less in part by rationing and in part by limiting access to new and costly treatments.
If you are unwilling to ration, it will raise costs not lower them. If you want to ration, just admit it.
Yes, Steve, I read the post.
And we ration today. Think 47 million uninsured. Do you honestly believe they are getting all the care they need. Including preventative care.
The care in the other 29 industrialized countries is equivalent or better. As a matter of fact we rank 37th. Right next to the powerhouse Costa Rica.
I honestly don’t get you guys. We spend twice what other countries spend. Twice. And to be ranked 37th in quality of care.
And we are the only ones without some sort of single payer. Mind boggling.
Slasher;
“What is missing from this analysis is the cost of the uninsured NOW.”
While it may be missing from this specific post by Mr. Hennessey, the argument that preventative care is a large source of savings is not very strong. As reported by Sally Pipes on CBO director Douglas W. Elmendorf’s testimony to Congress, “In the first place, a recent CBO report (“Key Issues in Analyzing Major Health Insurance Proposals, ” December 2008) is clear on one issue: Working to achieve universal coverage through expanding government’s role in health care will increase total costs and therefore either increase premiums or taxes, not reduce them. As for the argument that the uninsured shift costs, Mr. Elmendorf was quite direct dispelling this myth in his testimony before Mr. Baucus’s committee. “Overall,” he said, “the effect of uncompensated care on private-sector payment rates appears to be limited.”"
Furthermore, “Preventative care, disease management and electronic medical records are also constantly cited as big cost-savers. The idea here is that if our health-care system was set up to prevent disease rather than just treat it, and could do so without duplicative paper records, it could save money. It’s a great hypothesis, but research does not indicate it amounts to much. “In many cases,” as Mr. Elmendorf testified regarding such initiatives, “those studies do not support claims of reductions in health spending or budgetary reductions.”"
Source: http://online.wsj.com/article/SB123629779856246193.html
Secondly; no one is entitled to ANY medical treatment. As a wealthy country we are happy to provide charity to needy cases, but you confuse this charity with entitlement.
“But what justification is there for an industry which can be replaced by a more efficient system run by the government?”
None. Then again we repeatedly see that government cannot match the private sector in efficiency, so your assertion falls flat. Again, Mrs. Driver and Deamonte (an example cited above by jharp) were in a single-payer health care scheme and it failed them miserably. Deamonte did not receive preventative care (despite it being free), nor were the dentists who execute Medicaid care more efficient than dentists under private insurance.
Jharp;
“Because the government (single payer) is best suited for the job. Witness the 29 other industrialized who use it successfully.”
Witness the abject failure of the single payer scheme to help Deamonte. Why did it fail to help Deamonte? Because of the trade-offs that the single payer scheme entails. If you want to contribute something meaningful to the discussion perhaps you’d care to address some of these trade-off’s those 29 other countries face, instead of relying on a peer pressure argument. “Everyone else is doing it”, is poor reason to jump off a bridge.
Again if you are so desperate to help the Deamonte’s of this world, then go help them. Stop laying about waiting for someone else (the government) to come to their rescue.
“Your private plan is and has been in place for decades and is a monumental failure.”
My plan has not been tried in the US. The current system massively insulates the consumer (patients) from the cost of medical care. As a result they are unable to make proper cost-benefit decisions. Due to the lack of constant cost-benefit analysis we could reduce spending by roughly 30% without sacrificing quality of medical outcomes. The President’s CEA agrees with me on this. A plan similar to the one I proposed is in effect in Singapore, which surpasses your vaunted “29″ in terms of low cost and high quality. To be fair there are cultural and demographic issues that make a direct comparison difficult but that is also the case with your “29″.
Plans similar to my proposal are in effect in every other insurance market in the US (auto, property, life, etc.) and they are quite effective at delivering quality coverage at reasonable cost.
“And most importantly the proposed program LOWERS costs.”
You haven’t been paying attention. Mr. Hennessey’s post clearly lays out the CBO’s findings that the proposed program will increase costs. To the tune of approximately $1 Trillion. You repeatedly claim this is incomplete but are unable to point out how the remaining sections will reduce this cost. You claim one unscored portion (already pointed out by Mr. Hennessey) will reduce costs, but ignore other unscored portions (again pointed out by Mr. Hennessey) which increase costs. I ask again, what evidence do you have that the one cost reduction portion more than makes up for the other cost increasing portions?
J
Solidus,
Your WSJ link is bunk. And it’s an oped for God’s sake. Why don’t you cite Fox News? They have equal credibility.
“we repeatedly see that government cannot match the private sector in efficiency”
Hold it right there. All of the evidence says exactly the opposite. 29 other countries have government single payer plans that deliver the same level of care for 1/2 of what we do.
I suppose next you’re going to tell me the private sector can build a more efficient military. Or interstate highway system.
Though I can somewhat understand your lack of faith in government efficiency after seeing the incompetence of the Bush administration the answer is not to abandon the governments role where it is needed. The answer is to elect better leaders.
That, we have just completed.
I am not familiar with Singapore’s system. Link?
And I am very familiar with Hong Kong’s system having spent a year there and having several encounters with it. It is an excellent system combining a public plan supplemented with private insurance.
“Again if you are so desperate to help the Deamonte’s of this world, then go help them. Stop laying about waiting for someone else (the government) to come to their rescue.”
And this is utterly preposterous. Do you also think if I believe a road needs to be built that instead of lobbying our government that I ought to go out and get started building it myself.
Solidus,
Never mind. Found one and you are right. It is quite similar to Hong Kong and it is an excellent system.
http://econlog.econlib.org/archives/2008/01/singapores_heal.html
Note these highlights.
1) “The private healthcare system competes with the public healthcare, which helps contain prices in both directions. Private medical insurance is also available.”
Hmmm. Where have I heard that before.
2) “The government pays for “basic healthcare services… subject to tight expenditure control.” Bottom line: The government pays 80% of “basic public healthcare services.”"
3) The government provides optional low-cost catatrophic health insurance, plus a safety net “subject to stringent means-testing.”
Also co pays are very much a part to discourage waste. I all for it.
Anyways. Thanks. I defininetly learned something. I hope you did to.
And after all of this it turns out we agree. Go figure.
And why, why for the love of God does it take 15 years beofre the debate actualyy focuses on the actual issues instead of ridiculous sound bites. Rationing, Socialized Medicine, waiting lists, and the like. It’s all nonsense.
Their is an answer as we can see from the Singapore model. Lets’ hope it happens here.
And another excellent system is Taiwan’s. http://content.healthaffairs.org/cgi/content/full/22/3/77
“Though I can somewhat understand your lack of faith in government efficiency after seeing the incompetence of the Bush administration”
Oh, and nothing personal Keith. I hope I didn’t offend you. Many great players end up stuck on lousy teams. In no way did I intend this to be a reflection on you.
jharp,
So the crux of your argument is: 29 countries have single payer systems, they spend less and according to a ranking that includes a lot of outcomes that have nothing to do with the health care system, they have better outcomes. Therefore, the US should have a single payor system.
If it’s that easy for you, I commend you. Personally, I have a need to understand why that would be the case, whether the outcomes are better and which ones.
Having looked at those studies, I’m not sure I buy them. On fundamental principle, relative to where we are today, there are only 2 ways to save money.
1. Perform fewer services. It’s hard to believe this will be the outcome
2. Pay less for each service. It’s easy to believe this will be the outcome but that will come with a quality penalty in my opinion. If you choose not to believe that, we can agree to disagree.
You think that facts and studies are the answer, I want to understand why you believe the outcome you believe. I’m not big into reasoning by analogy since analogies are very challenging to line up. I’m more into how the fundamentals change and how that affects the outcome.
On the fundamentals, I believe:
1. More services will be used as the cost of services to people declines.
2. The government will strive to pay less for services but ultimately will fail because it will not be perceived to be acceptable in the US to have the public plan not cover what the private plans cover and therefore prices will continue to rise.
3. As a consequence, costs will increase in this country.
4. This will continue until costs rise to the point of being “unacceptable”. Like many other people, I believe this will happen more quickly if people pay for their own care and make their own price/quality tradeoffs as opposed to having the government make it once for all of us but again we may choose to disagree there.
The analogies of other countries are not important unless you can help me understand how they manage the root causes–number of services provided, quality of service provided (not quality of outcome by the way), and cost per service. Without that, analogies are inevitably apples and pears (or grapefruit).
I wish you peace and a long and healty life
Steve,
Take a look at these two links. Excellent systems for a fraction of what we spend as a percentage of GNP and per person.
http://econlog.econlib.org/archives/2008/01/singapores_heal.html
http://content.healthaffairs.org/cgi/content/full/22/3/77
“and according to a ranking that includes a lot of outcomes that have nothing to do with the health care system, they have better outcomes.”
And that is a mighty big assumption. Actually it is a false assumption.
And there is no questions our administrative costs far exceed the rest of the world. And there is no question that catching disease early is far cheaper to deal with. See Deamonte Driver who racked up $250,000 in bills that could have been avoided with an $80 tooth extraction. And then he died.
Peace and good health to you as well.
JHarp stated:.
“Because the government (single payer) is best suited for the job. Witness the 29 other industrialized who use it successfully.”
One must be very careful when making international comparisons, especially because rankings are subject to individual methodologies, widely varying demographics and culture, and ideological bias (e.g. the WHO rankings are very poor in this regard). And if one is to draw any lessons from international experience, it is that a) public employment of medical personnel and ownership of facilities provides the worst care (and lowest cost GDP)…eg the UK. b) single payer insurance to private parties provides better care for higher costs, but the quality is not of the level that the average American finds acceptable (e.g. Canada); c) a mixed private and public insurance system (e.g. Germany) provides good care, but also costs the most (e.g. Germany) but still not as much as the US system. Depending on the year of comparison, the German system uses 11% of its GDP and the American system 14.5% (2005).
How and why the German’s get good results is not yet clear. Obviously they don’t have inner city drug cases and gunshot wounds; are less fat than Americans, etc., and I suspect that a system run by Germans is, per unit of output, going to be far more efficient than an identical system run by Americans. So, untill someone can show me more information, I remain agnostic on the issue.
“And witness the one who doesn’t. Us. Your private plan is and has been in place for decades and is a monumental failure.”
Actually that is not what has been in place for decades. Three decades ago government insurance was established. It has grown 20 fold and now about half of all medical dollars comes from the government (Medicare, Medicaid, VA, SCHIP, Public Health Clinics, University Clinics, County Clinics, etc.) . Prior to any government involvement medical costs rose 3.2% per year. Today it increases much faster.
So tar brushing private insurance is both inaccurate and dependent on what outcome you measure the whole system with.
“Exactly. It will not bankrupt the country. And we are treating and paying for the uninsured in the most expensive fashion possible. Preventative care is ignored. And preventative care saves dollars.”
Yes and no. We are treating some individuals less than we would under the proposed system. Currently those without insurance and who do not qualify for Medicaid (say the working poor) must be treated only for life threatening illnesses. To the degree they avoid treatment (or pay as they go) for other kinds of medical care is the same degree to which the new program will layer on additional costs.
(And preventive care is one of those old enthusiasms that have not been shown to save much at all.).
“And most importantly the proposed program LOWERS costs.”
I doubt it, at least not unless it imposes some very serious rationing. Putting millions on the public medical dole will cost more (about 200 billion a year when it gets rolling). The only way to cut costs is to either ration care through strict protocols, or cut reimbursement rates. As doctors are leaving medicare now, this approach does not seem promising.