This week there were two very different groups that evaluated two different single payer proposals.
The Mercatus Center, a liberterian group, evaluated Senator Sanders (I-VT) Medicare for all proposal.
The Rand Corporation evaluated the New York Health Act.
Both proposals made some strong assumptions on provider pricing and implementation challenges but I think both groups made reasonable estimates of a good case scenario for advocates. And both groups came in with roughly the same type of conclusions:
- Total health expenditures would go down slightly (~2%) at the end of the implementation period
- Government health expenditures would go up a lot
- Everyone would get covered
- Significant distribution of costs and benefits are not uniform in the population.
Here’s what single-payer health care would look like in NY https://t.co/nGFzBusfFa via @ZTracer pic.twitter.com/owWw0RqV7k
— Anna Edney (@annaedney) August 1, 2018
This last point is key. Single payer produces winners and losers.
The tweet above is the distribution of average winners and losers of moving to single payer in New York. This only looks at changes in taxes, premiums and cost sharing. On average, people who are in the bottom 90% of the income distribution are better off with single payer. People in the top 10% of the distribution are worse off. I think this graph understates the change as doctors are a disproprortionately likely to be members of the top 10% so they’ll get hit coming and going.
People who have something to lose will scream a whole lot more than people who are promised future yet to be delivered benefits/improvements.
Mechanically designing a single payer system is fairly straightforward in the American context. Levers can be twisted, knobs turned, incentives tweaked, budgets adjusted. Different people with different values will move those interacting variables in different manners, but a clear logic model to implement a version of single payer can emerge.
The challenge with single payer systems in the United States is the political problem. It is the problem of managing both change-aversion and juggling the trade-offs that produce happy but not motivated winners and extremely loud and angry losers who were well positioned in the status quo and are losing their advantages.
That is the challenge, not the mechanics per se.
Aimai
I would happilly pay 1,700 more to see everyone else covered. Im mindful that I and my children would then be covered in the event of desth or loss of the primary earner.
Betty Cracker
I don’t know how it’s going to shake out, but it’s hard to see how the current status quo can continue, especially since Trump and the Republican congress have demonstrated that they’ll sabotage the ACA to fuck us all over for political gain. We get insurance through my husband’s job, and the premiums are more than our mortgage and going up every year — for shitty coverage! It seems unsustainable to me.
Baud
@Aimai: Juicers aren’t representative of the general public.
Analysis is good, but these numbers aren’t the least bit surprising, except that I’m surprised single payer only saves us 2%.
MomSense
@Baud:
We won’t see much cost savings until we deal with the fee for service model and with the cost of medical education for doctors and specialists. We also need to deal with the number of doctors and specialists and who can provide what level of care. More LNPs and RNs will have to provide services now done by physicians.
Baud
@MomSense:
Well, someone over promised in 2016.
“The United States currently spends $3 trillion on health care each year—nearly $10,000 per person. Reforming our health care system, simplifying our payment structure and incentivizing new ways to make sure patients are actually getting better health care will generate massive savings. This plan has been estimated to save the American people and businesses over $6 trillion over the next decade.”
https://berniesanders.com/issues/medicare-for-all/
MomSense
@Baud:
I think he planned to pay for it with an 8 or 9% GDP,
ChrisS
I’d be curious to find out how the NY system would be paid for (at least in NY) since the bulk of our property taxes go to medicaid/medicare payments by the county. In a sane system, these would be cut and paid for by income taxes on the wealthy.
gene108
Interesting you think the mechanics of going to single payer are straightforward. I always thought the mechanics would be an issue.
*************
In terms of “people”, who will scream, where would insurers and healthcare providers come down on this. This would be a disruption to their business models, and there will be losers. And business lobbies that might lose out can make a big stink about not getting what they want and change public opinion.
MomSense
@gene108:
We also have to deal with the layer of people who work in billing, patient accounts, etc. A lot of people will need help finding employment.
Davis X. Machina
So all those lovely people over at DemocraticUnderground.com who assured me in 2008-10 that the cost savings from eliminating the profit motive would pay for universal health care provision weren’t right?
I suppose I could have expected that. Especially from anyone who was using ‘single payer public option’ as a phrase to describe the plan that would bring it all about.
Davis X. Machina
@ChrisS: Bulk of property taxes go to Medicaid? How are your local schools funded?
FlipYrWhig
@MomSense: I’m sure there are obvious problems with this but: why not federalize primary care? Let’s give everyone a town doctor, trained at the medical equivalent of a police academy. I feel like we’re unnecessarily elitist about who we “allow” to become a doctor. From poking around it looks like there are 6 million teachers in the US vs. 1 million doctors and 3 million nurses. Let’s just make more. What’s the downside?
David Anderson
@gene108: By “Simple” I mean that if you lock 15 wonks in a room with pizza and beer and tell them to come out with a single payer proposal that meets the objectives of spending no more money on national health expenditures while covering everyone, they can come out with 12 plans that meet that criteria before they run out of beer.
Now getting any of those plans actually implemented because of the distributional challenges and loss-aversion nature of politics, that is the hill to climb.
David Anderson
@gene108: Big screamers on economic grounds in my mind are hospitals (and all their employees) especially academic medical centers, doctors, Pharma and device manufacturers and anyone seeing their taxes increase significantly.
Loss aversion screaming will come from people with good insurance already, especially folks who are relatively healthy and who don’t believe that their health insurance premiums are a 1:1 reduction in wages so they’ll see their explicit taxes go up while not believing wages will meet or beat the increase.
tobie
I appreciate that “designing” a single payer system is not the problem, but I’m not sure that the “mechanics” of implementing it are so easy. I just don’t see how you switch the 55% of the population that receives its health insurance from its employer overnight to a public system. And the transition period would be a mess given that private insurers would have no incentive to process payments. Has anyone studied what the savings would be to adopt the protections that exist in Switzerland and Germany, which were the model for the ACA?
ETA: I should add that I’m skeptical that employers will raise salaries when they no longer have to pay insurance premiums. Judging from what they do in France: employers pay the 50% of the taxes that fund the healthcare system. So single payer will not translate into higher wages for employees.
Brachiator
@MomSense:
What are the issues with fee for service?
I often see comments about the cost of medical education, but don’t think I have ever seen an analysis of how this factors into health care costs.
PJ
@tobie: Rather than raise salaries, it seems more likely that employers would just take the savings from not having health care expenses and pass them on to executives and shareholders, as they did with Trump’s tax cut.
ChrisS
@Davis X. Machina:
Separate property tax levied at the district level. Property taxes to the county go to support county services (~15%) as well a substantial state-mandated spending (85%), of which medicare/medicaid is the biggest component. NY is one of the few states that puts the healthcare onus on the county.
Chyron HR
What part of “a bird landed on his podium and anointed him as Messiah” do you assholes not understand?
thaddeu
I always have a problem with presenting data like this. What does this communicate?
Person A can be making $450K and end up with $400K after paying for universal coverage
Person B can be making $405K and end up with #$402K after paying for universal coverage
So universal coverage is an act of punishment for people who earn more? Drag them down? That’s what this picture says.
Agreed, none of us here make that much (at least not me), but it still matters. Enough Americans, even if they are not making $400K+ income, hold a fundamental idea of fairness, warts and all.
This picture implies that there is no other steps between $1.7K and $50. , That portrayal is a poor choice. Who pays $5K? $10K? Maybe its those making above a million that pays $50K….I don’t know from this picture. That story needs to be told, to sell this idea.
Kylroy
@FlipYrWhig: The downside is fighting the American Medical Association, which will fight tooth and nail to keep their bottleneck on MDs in place, while telling the public (which generally *likes* doctors, unlike insurance companies) that the gubmint is trying to let unqualified people replace them.
Cacti
@MomSense:
That’s the elephant in the room that no one likes to talk about. When big savings are promised, what doesn’t get mentioned is that much of it comes from eliminating redundant services. That doesn’t mean that universal health coverage isn’t worth it, it just means its advocates need to be realistic about the costs vs. the benefits.
Brachiator
@Kylroy:
So, have other countries with universal health care seen a significant increase in the number of doctors? And how has this affected total health care expenditures?
Kylroy
@Brachiator: They mostly saw an increase across the 20th into 21st century that was sharper than the US had. I can’t establish a firm causal link between doctor population and overall health costs, but they pay their doctors markedly less and spend markedly less on healthcare, so…*shrug*.
Kylroy
@Brachiator: When I look at unemployment in the US versus other first-world countries, I sometimes wonder if our ass-backwards healthcare system is functioning as a (mostly private, wildly inefficient) jobs program.
catclub
@Baud: 1. the model that had us saving $2Tr out of$32Tr is more than 2% savings.
2. The present model perhaps sets provider prices constant – the likelihood is that a single payer can bid down prices – but can also choose not to if directed not to by the Congress – as in medicare drug prices.
catclub
@Cacti:
I wish that rule was applied to the abstinence versus sex education crowd.
Jerry
@tobie:
My portion of my health insurance cost is taken out of my gross pay. If my employer decided tomorrow to cancel that benefit to its employees, I would be ~$200 richer each month. It would be wage theft to take that portion that I pay out of my gross pay. (And yes, I know that’s a whole other issue in our country that mostly the working poor have to deal with on a daily basis.)
FlipYrWhig
@Kylroy: I get that but I wonder if the way to stuff their mouths with gold is in essence to say that all “doctors” are now specialists and that there’s now a first tier of medical providers that’s respected but not rich–a status that soldiers, teachers, and nurses know well already. There are plenty of B students who could be kickass medical providers, but we don’t let them. People who go to medical school *now* don’t really want to have that kind of job, right? They want to do lucrative, fancy things because it was so expensive and elite/elitist to get to where they are. So we need a generic med school equivalent to make people into providers without all of the discriminatory weirdness and neurosis of the process we’re stuck with now. Hence let’s create something like “MediCorps.” It just seems like a win/win: we have underemployed people in search of a way to have a meaningful life, we have underserved people dying from lack of treatment, just put them together and take the profit motive out of it because public health is a public good. There have to have been ideas like this before but I never hear about them and I’m not entirely sure why. It’s at least as good an idea as postal banking.
some_doc
@ChrisS:
That’s really odd. The county shouldn’t be making *any* direct Medicaid/Medicare payments.
Medicare is funded completely by the feds, via payroll taxes and general funds.
Medicaid is a fed/state partnership – but this shouldn’t reach down to the county level unless the state has a very odd way of paying for its share.
Many counties have their own safety net health systems, the famous “County Hospital”, that are paid for by local county taxes. But Medicare and Medicaid are actually a source of *support* for these systems. The Medicaid expansion in the ACA helped to stabilize many county health systems by essentially replacing county-level funds to pay for uninsured care with federal funds to pay for medicaid care.
That’s my amateur understanding of it all, anyway. How are your property taxes going to Medicare/Medicaid?
some_doc
@Brachiator:
Paying a health care system to “do things to people” rather than to “keep people healthy” can create bad incentives. You get paid for doing things that might not be necessary or helpful, then get paid even more to address the problems you caused. You get paid more to take care of someone in the ER than at home. You get paid more to treat the hospital-acquired infection than to wash your hands. You get paid more if someone stays in the ICU than to get them better, walking, and to rehab. The only counterbalance is the basic decency and morality of the vast majority of medical providers.
The specifics of fee for service can make things even worse. The US generally pays more for sub-specialty care, more for procedures, more for surgeries, more for crises, etc. And less for hands-on care, less for “cognitive” care, less for prevention, less for stable management. The ACA included lots of reforms to try to change this, but it’s an ongoing slow – and hugely complex – process.
r€nato
I fully support single-payer universal health care and yet I despair that the US will ever see it absent some sort of crisis that forces this kind of radical change. The current system is a crazy patchwork-quilt with abundant incentives for powerful interests to keep it more or less the way it is, and it is far too easy to demagogue those who are happy with the coverage they have into opposing any significant changes.
(and I fully understand that fear, it’s entirely rational even if the specific issues used to manipulate people may be irrational e.g. death panels)
tobie
@Jerry: What you say is right. But remember that whatever you and your employer put into your health insurance premium is tax free at the moment. It won’t be if it’s straight income.
Kylroy
@FlipYrWhig: Economically, reducing the cost of medical care means we will (almost certainly) need to reduce the amount we pay medical professionals. Whether we do this by allowing more doctors, or by shifting current doctor-specific duties to non-doctors, the end result is less money going to doctors – if it *doesn’t* result in less money to doctors, it’s a pointless reform. Whatever method of doctor payment reform is presented, the AMA will work to stop it.
Davis X. Machina
@FlipYrWhig: Something like Brad DeLong’s 2007 Barefoot Doctors
ProfDamatu
@David Anderson: It’s not a reason not to explore single payer (or really, universal health care, however we get there), but I have to say, I don’t think that the “loss aversion screamers” are entirely wrong in thinking that their health insurance premiums (or the portion subsidized by their employer) are not a 1:1 reduction in wages. I can’t imagine my employer, a state university, giving everyone currently covered by insurance a $700/mo or so raise if single payer were magically instituted tomorrow (if nothing else, the state legislature would shit themselves over the idea!). It’s possible that wages might rise by some token amount, but being a bit of a cynic, I suspect that lots of that savings will find its way into everyone’s pocket but the worker’s.
John
I’m in that top 5%. As much as I’d love to see universal health care, I’d move out of New York before paying $50,000 plus per year. Just being realistic. That’s my retirement money.
ProfDamatu
@thaddeu:Yeah, that jumped out at me too. Of course, a moment’s reflection suggests that the $50k average increase for the top 5% is being wildly distorted by the small number of mega-salaries – I’d guess it’s the top 1% or even .1% dragging that average so high, and of course they’d actually be paying more than an extra $50k a year under single payer. That person making $450k wouldn’t be looking at an extra $50k in taxes; I’d be surprised if it were more than $10k. And when you consider what their insurance premiums are likely to be (not too many youngsters in that income bracket!), it still might be close to a wash. Sadly, the average person glancing at that figure isn’t likely to think beyond the knee-jerk.
ProfDamatu
@John: Yeah, but unless you’re at the top of that top 5%, it wouldn’t be $50k per year, given that the top 5% starts at just over $406k and goes up to…whatever the highest income in the state is (given that it’s New York, I’m guessing that’s a very, very high number, and that probably a non-trivial number of taxpayers are not far behind). That average is being dramatically distorted by the huge outlier salaries, like how the average net worth in a bar jumps into the hundreds of millions when Bill Gates walks into the room :-).
Probably it would have been better to have used the median change for each income group on the graphic, rather than the mean, for this reason.
ProfDamatu
@Jerry: That would be wage theft. I think, though, that when people talk about possible pay increases due to single payer, they’re only thinking about the employer portion of the premium as constituting the theoretical raise. Of course that $200/mo that you currently pay out of each check as your portion of the premium would continue to be paid to you, but I at least wouldn’t consider that a raise; rather, you’d have an extra $200 a month (well, a bit less, due to taxes) in disposable income because that insurance premium is no longer a monthly expense. In other words, your salary still includes that $200 a month even though it never reaches your bank account, whereas the employer portion of the premium isn’t considered part of your income (part of your compensation package, yes, but not usually figured into your salary).
More generally, I think that even if employers did kick all the savings of no longer having to pay the employer portion of the health insurance premium back to the employee, people would still be disappointed with the amount, and not just because, since it would be money income, they’d be paying taxes on it. I would imagine that most employers would somehow account for the fact that they’d no longer be getting a tax break for providing employee health insurance in figuring how much employee salaries would rise – that $900 or whatever that the employer pays monthly for John Q. Employee’s health insurance might become more like $500-600 once the employer accounts for losing the tax advantage. And as I said above, I have serious doubts as to whether many employers actually would kick much more than a nominal amount back to their employees.
FlipYrWhig
@Kylroy: I’m sure you’re right but it’d be a clever way to solve the access problem while deferring on all the other problems.
ProfDamatu
Only just finally looked at the actual numbers on the y-axis of that chart and…damn, this just drives home all the more that the root of the problem really is how much health care costs. I mean, under either status quo or the NYHA, one group is paying about 35% of their compensation on health care, and the best any group does (the second quartile under NYHA) is just under 15% of compensation going to health care. (Those are averages, but I’m guessing they’re not terribly skewed because of out-of-pocket maximums.) Most groups are at 20% or more under either scenario. Now, of course I’d rather that the group paying the 35% be the top 5% rather than the bottom 25% of earners, but ultimately that proportion of income going to healthcare is just crazy, and not sustainable. Though people have been saying that for decades now, and yet here we are.
ProfDamatu
@Davis X. Machina: I followed that link and wow, some of the other stuff in that plan was seriously scary. Especially the part where anyone who is born with or develops a chronic condition is basically mandated to pay 20% of their income on health care for the rest of their lives. But the mobile doctors idea is an interesting one, even if I suspect that nobody is going to be down with letting some random doc-lite come into their house and critique the contents of their fridge. :-)
Bob Hertz
By the time the state of Vermont got around to debating new single payer taxes in 2014, the amounts required were an 11% payroll tax and a 9% income tax.
Incidentally, this is not far from the actual tax levels in France and Germany for health care.
No one including Bernie Sanders is using such numbers today, but at some point they will appear and must be debated.