Premiums are as high as they are because health care is run as a for profit industry - health care in America is orders of magnitude more expensive than in other countries.
If you remove the profit motive prices will drop down towards something more reasonable, in this situation it's not unreasonable to expect that the system could be maintained with employee premiums.
The cost of initialisation of services will be huge however, it will be interesting to see how they spread it out - they may bear the costs for now, and seek to recoup them providing excess capacity for service to other companies.
Being largely for-profit is part of the problem with healthcare in the United States, but plenty of other countries have privatized healthcare that works, Japan being the first that comes to mind.
The difference being that, in the US, the long-term dysfunction of our political system has allowed the regulatory framework for healthcare to be built to service its own industry, rather than the needs of individual citizens or society at large.
As one example, regional hospitals used to band together in groups to bargain collectively when purchasing supplies. This arrangement was formalized, legislated, and then warped, so that rather than the hospitals controlling the organization, it was instead controlled by the suppliers, driving the cost to the patient up, rather than down.
There is no easy solution here, without first fixing our broken political system, and I see no evidence of that happening.
>The difference being that, in the US, the long-term dysfunction of our political system has allowed the regulatory framework for healthcare to be built to service its own industry, rather than the needs of individual citizens or society at large.
You can templateize that statement, inserting pretty much any aspect of life in place of healthcare and it will still be true.
And that's because the US government no longer responds to the needs and wants of the people, but to the needs of corporations and rich people, which happened because of legalized bribery, or the ability to buy a politician's vote with "donation money".
This is why Larry Lessig was right when he kept saying that this is the root cause that needs to be fixed before anything else. People should be supporting such "single issue" politicians that want to reform this system all over, because this is what will fix everything else in the long term, whether it's economic, healthcare, or even social issues (which tend to be turned into issues to distract from the real harm they're doing somewhere else).
>And that's because the US government no longer responds to the needs and wants of the people
I'm an immigrant so I'm not clear it it ever did this: it hasn't in the 20+ years I've been here. Things I hear on the motivations of the founding fathers and the resulting deliberate dysfunctionality they introduced into the system of government suggests to me that the goal was never to respond to the needs and wants of the people.
Why did Larry Lessig not find more support amongst the tech billionaire crowd? His open source policy programs on fixing US democracy ought to be a magnet for hobnobbing billionaires at the very top of Maslow's pyramid.
Why did Larry Lessig not find more support amongst the tech billionaire crowd?
Cynically, because both the current system in general and the current administration in particular is perfect for billionaires. They have everything they could ever want, so why risk that? Don't fix what ain't broken.
The problem with US healthcare isn't profit seeking, it's that years of regulatory technical debt starting with the employer tax deduction totally broke the market and the incentives to control costs are shattered like most things our interests-captive government pays for anymore.
I for one am cheering on the capitalists trying to come and do an end run around this political mess. There's no reason healthcare can't be like buying anything else in a competitive market other than the legal complexity dealing with it and daunting capital required to over come that.
The traditional economic view is that private, profit seeking enterprises actually offer better prices to consumers because of competition, while monopoly firms charge higher prices bc they have more market power, and government run enterprises yield lower quality products because they don't have incentive to compete on quality. India has a very competitive healthcare system that is largely out of pocket and while they aren't perfect, they do pretty well considering the size of the country and their per capita gdp. On the other hand, though it is common to praise "single payer" European systems, these systems are not without fault. France is actually trying to learn about innovative American models of care because their system won't be able to afford caring for an aging population
The US system is more expensive due to weird interactions of profit seeking and regulations, and idiosyncratic local systems, all exacerbated by lobbying and political issues (like hospitals being major employers in most counties). Arguably another part of the US healthcare cost premium is that the US invests the most in innovation
It's simply not true either that healthcare is cheaper by orders of magnitude than other countries. Using health care expense as % of GDP as a metric of comparison, the US is at 17-18% while France / U.K. / Germany are around 10-12%
Attributing the high cost of healthcare in the US is a bit facile and simplistic
> the US is at 17-18% while France / U.K. / Germany are around 10-12%
One has to consider that many people in the US don't consume healthcare because they can't afford it (hence the lower life expectancy), whereas in other countries everybody who needs it can access it, with almost no limit.
So the part of GDP represented by healthcare in the US is much lower than it "should" be; or, to put it another way, there's a huge growth opportunity if one can lower prices.
Incumbent actors may prefer profits over volume, but they're vulnerable.
One of the big reasons why healthcare is more expensive in the US is Americans get a lot more of it, particularly out-patient care (~150% of OECD average).
And other single payer countries certainly don't offer limitless levels of care. The gov't determines what it will pay for and nothing else. For Americans with generous insurance coverage, the care is much more limitless when you look at things like experimental treatments and the latest drugs.
Comparing it to the population then suffers from not accounting for the wealth of a nation. It may appear expensive due to a high cost of living and therefore high staffing costs, but it doesn't matter if everything else is also scaled accordingly. You also have to consider outcomes, spending much more to get slightly better outcomes might be deemed worth it.
That said, it doesn't matter which metric you choose, US healthcare does poorly in almost all of them.
It's relatively easy to keep the costs low in Europe: you pay in queues and cheap health care instead of money. That doesn't mean good-or-bad automatically. E.g. giving birth by C-section is a rare event in Europe but it's very common in the US, making the "born" event very expensive on average in the US. You usually get over-testing in the US and under-testing in Europe.
If you have a suspicious mole, or a woman reports pain in the uterus, in Europe you might wait one or two years before a doctor sees you. And then you might get just an "everything looks fine" or a mild painkiller, and start again to look for another specialists or just go to the private health. It's known, but somewhat silenced, that a significant number of heart/liver/kidney patients just die before they get to see the specialist because the system is overloaded. This payment-by-queue drives costs down, but is obviously a bad thing.
It's also known that the public health in Europe just don't cover some treatments, depending on the country. Or they are so overloaded that they just don't work. Think about that: you pay for a supposedly full health insurance, but if you're so unlucky to catch a Hepatitis C that it's not covered because the treatment is expensive, you just wait for your death. Costs are lowered, for sure.
Another side effect is that the top notch specialists in Europe earns about the same money as an average or a bad doctor working for the public health. This causes some of the said top notch to go to greener pastures: the US. It's very typical that the (rich) Europeans go to the US to receive cancer treatments. Thus the US costs are driven up and the Europe costs down.
This is complete bullshit. In many European countries you get screenings for most common tumors (bowel, for women uterus and breast) for free depending on your age. Cancer treatment and chronic disease treatment is top notch and you get it for free (you pay it with taxes), like everything else. There is no such thing as "not being covered because treatment is expensive"---I had to reread that sentence twice because I thought you were talking about the US.
Life expectancy is higher in most of Europe than in the US, which would be pretty hard to achieve if people died because of "death panels" and waiting lists to see a specialist. Plus prevention is actually a thing.
Elective surgery has a waiting list that can be weeks or months, but this doesn't translate to everything else. If it takes months to get an NMR, probably it was the patient that insisted to get a useless one. If your GP marks an exam as urgent you can get it within a few days.
There is no such thing as "not being covered because treatment is expensive"
There most certainly is. Look at what the UK's cancer fund is going through. It's not unusual for NICE to say "we're not paying for that". For people with generous insurance in the US it's much more typical for the insurance company to roll over and pay for the latest and greatest due to public pressure.
You are confusing treatment that is expensive with treatment that is not cost-effective. Also, the parent message was not talking about cancer but hepatitis C.
> If you have a suspicious mole, or a woman reports pain in the uterus, in Europe you might wait one or two years before a doctor sees you. And then you might get just an "everything looks fine" or a mild painkiller, and start again to look for another specialists or just go to the private health. It's known, but somewhat silenced, that a significant number of heart/liver/kidney patients just die before they get to see the specialist because the system is overloaded. This payment-by-queue drives costs down, but is obviously a bad thing.
Sorry but that's wrong. I've only used the health systems in the UK and Germany but in both countries, you can get an appointment either directly (if you're flexible with time) or within a few weeks. In urgent cases, all hospitals have specialised staff and will see you immediately.
Hell, even in my poor Southern European corner you might wait a couple of months for a scheduled appointment; I've never heard of waiting years for a GP consultation. An year is what my brother waited for surgery for a minor shoulder problem, not to see a doctor!
The average cost for vaginal delivery is not all that much lower than for C-sections, especially if someone needs/wants epidural etc.. Last US data I looked at showed average costs were something like 20% apart. The lower use of C-sections in most European countries is because it is only done if medically indicated - it has risks. People can, however, and do, do it privately in most European countries, and it is most places substantially cheaper than doing a C-section in the US..
> If you have a suspicious mole, or a woman reports pain in the uterus, in Europe you might wait one or two years before a doctor sees you.
If we ever came across a situation like that, we'd scream bloody murder to the nearest national newspaper. Maybe it happens some places, but my experience with healthcare in European countries does not in any way reflect what you describe. I'm in the UK now, and when I want to see a doctor, my experience is that I have never needed to wait more than a couple of days - most cases I've gotten an appointment same day. It's what I expect. If my GP can't see me fast enough, I have a number of walk-in centres I can go to (caveat is 2-3 hour waits). Out of hours or for something more serious but not an emergency, I can go to the nearby hospitals out of hours service. If I freak out, A&E will never turn you away (though they might scold you if you show up with something that you should know better about). If I'm unsure, there's a non-emergency number where an nurse will triage and either get a doctor lined up or tell you to get yourself to A&E.
Basically, if I have a concern that I think merits immediate attention, it will get immediate attention.
On the occasions I've needed to see specialists or have tests one, I've gotten it done within a week or two.
Yes, there are queues for some services, and especially surgeries, but after you've been triaged by primary care.
If it was like what you suggested most places, you'd expect takeup of private health insurance to be much higher, yet e.g. in the UK it hovers around 10%, most of which are employers offering it as a benefit whether or not you care about it (e.g. I have private insurance now; it made absolutely no difference to my evaluation of my employment offer, same for my ex). It's offered because it is dirt cheap (because most of them cover "add-ons" like seeing a specialist faster, and rely on the public system for most routine stuff) and perceived as worth more than it actually is.
> This payment-by-queue drives costs down, but is obviously a bad thing.
Queues are there because you are triaged by doctors, and clinical needs rather than ability to pay is what determines who gets treated first.
While mistakes happen, overall the high life expectancy in most European countries show that it's for the most part working very well. E.g. 2015 WHO data shows a life expectancy for the UK about 2 years higher than the US - in total 21 European countries in 2015 data had higher life expectancy than the US, including all of West / North Europe. The ones falling behind are the poorer Eastern European countries.
I'm sure there's room for improvement, and I'm sure occasionally people die because they wait too long, but the life expectancy shows the priorities largely work.
Another point is that the lack of queues in the US to a large extent is fiction: The queues are not there because a lot of people can't afford to use healthcare more. Even with insurance, if you have large co-pays etc., it doesn't take much before you use healthcare services less than you should. What a system that is free at the point of service does is give a full picture of the actual demand and ability to actually make decisions of funding and prioritisation based on clinical need. You don't have that in the US system.
> Another side effect is that the top notch specialists in Europe earns about the same money as an average or a bad doctor working for the public health.
I don't now of any place in Europe other than possibly Norway where this would be the case unless they themselves don't care to earn more, as most places top doctors can easily mix and match public and private services, and often do. E.g. in the UK a lot of consultants will do private surgeries, and will do so in NHS hospitals, as NHS hospitals can rent out spare capacity (and some run their own private clinics), and can earn a lot extra that way.
Esoteric or non-physical things, mostly. The NHS really sucks at trans issues, for example, where a two year waiting list is not unusual. It's one of the few areas that US healthcare sometimes does better in, where the state is one which permits informed consent care.
To be fair, if you're willing to pay US prices you'll also get immediate treatment. There are enough private clinics with no waiting list that will treat you immediately. But insurances that cover those are not much cheaper than US health care.
The US pharmaceutical industry is also one of the leading innovators and manufacturers of life saving drugs and medicine. The profit incentive, combined with 10 year intellectual property protection, is what allows pharmaceutical companies to spend enough on R&D to produce these drugs (which the rest of the world benefits from!)
When calculated as a function of GDP, the US isn't that much more innovative compared to other countries. Creating new molecular entities at a higher rate than other countries was the only argument I ever had against a single payer system, but research seems to say that we're not innovating (with respect to GDP) as much as we think we are. From this[1] comment about a 2010 study (and the first result in search about cost):
I don't know all of the ins-and-outs of funding, but this[0] study says that there are other countries developing NMEs at a proportionately faster rate than the US.
From the discussion section:
>Pharmaceutical innovation is an international enterprise. Although the United States is an important contributor to pharmaceutical innovation, we found that more than 20 countries contributed to the development of the 288 NMEs with patents at the time of approval. More than 171 companies were involved in the development of these NMEs, and the vast majority of companies were multinationals with facilities located in more than 2 countries. We also found that the United Kingdom, Switzerland, Belgium, and a few other countries innovated proportionally more than their contribution to the global GDP or prescription drug spending, whereas Japan, Spain, Australia, and Italy innovated less.
Granted I know that GDP isn't the end-all be-all for determining how drugs can be financed, but I think there is something to learn from the study and how other countries do business while continuing to innovate.
> Premiums are as high as they are because health care is run as a for profit industry
That's disproven by the fact that for decades premiums were extremely reasonable. In fact, premiums roughly tripled in just 20 years. That increase is radically beyond cost inflation in most everything else except university tuition costs. That spike wasn't caused by healthcare being for-profit, it was for-profit in the decades prior to that cost explosion too. You'll have to actually explain the specific cause for why costs suddenly exploded higher in such a short span of time. Compare premiums in 2015 vs 1995, on a per capita income basis, the difference is extreme. Why weren't they always so high?
Here's a hint: the same exact thing happened at the same exact time in the university education system as well. Previously, before 2000 roughly, US university costs were far more modest. You could go to a top tier university in the 1970s and 1980s and pay for it entirely with a part-time job. Student loan debt went up five fold in ten years, at the exact same time healthcare costs exploded higher.
Want to guess which entity caused both cost inflation outcomes?
If you remove the profit motive prices will drop down towards something more reasonable, in this situation it's not unreasonable to expect that the system could be maintained with employee premiums.
The cost of initialisation of services will be huge however, it will be interesting to see how they spread it out - they may bear the costs for now, and seek to recoup them providing excess capacity for service to other companies.