Skip to main content

On January 1, 2014, the Affordable Care Act went fully into effect. But for all of the furious fighting over the law these past five years, Obamacare was always an evolutionary reform grafted onto the existing American health care system. The Medicaid public insurance program has been extended to roughly four million lower income Americans so far. About two million more people have purchased private insurance, many of them aided by subsidies from Uncle Sam. And while many (though not all) of the worst abuses that let insurers pad their profits by denying or dropping care for the sick have been banned, the edifice of private insurance remains largely intact. Far from a "government takeover of health care," Obamacare preserves all of the hallmarks—private insurance companies, private hospitals, private doctors, and the patchwork of different systems for veterans, seniors, workers, and the poor—that define the American model of health care provision.

Nevertheless, the conservative sound bite assembly line continues to churn out the same tried and untrue talking points. Declaring "Obamacare is a full-scale federal takeover," former psychiatrist turned conservative columnist Charles Krauthammer warned two weeks ago:

Three years ago I predicted that Obamacare would turn insurers into the lapdog equivalent of utility companies. I undershot. They are being treated as wholly owned subsidiaries.
(The carriers' earnings and stock prices suggest otherwise.)

If Krauthammer's formulation sounds vaguely familiar, it should. During the 2012 presidential campaign, GOP torchbearer Mitt Romney explained why he wanted to set fire to the Affordable Care Act:

"We can get health care to act more like a consumer market, and if we do that and we stop making it like a big government-managed utility, we're going to see better prices, lower costs and better care."
But Romney, Krauthammer, and their ilk in the Republican Party aren't just wrong. They have it exactly backward. As a quick tour of the American model and successful systems in place in other modern economies worldwide shows, health care should be treated less like a free market and more like a government regulated utility.

For more on the ACA and America's unique system, please read below the fold.

Let's start with the conservative free-market nirvana, where buyer and seller each armed with perfect information come together in a voluntary transaction. But from the get-go, the patient-as-consumer faces a knowledge asymmetry almost impossible to overcome. Americans' general deference to physicians isn't just a cultural trait, it simply reflects the expertise and training regarding diagnoses, possible treatments, and likely outcomes doctors possess and their patients do not. For some cases and for some conditions, the layman can narrow that yawning information gap. But WebMD or no, it can't be eliminated. "Health" is not a commodity. Those who believe that choosing a health care product or service is no different than buying a car, television, or cell phone might feel differently after, say, developing colon cancer.

But even if the diagnoses, treatments and cures for heart disease, diabetes or depression could be purchased in a free market, in the United States the buyer simply doesn't—or—can't know what price he or she will pay. As Stephen Brill documented in March ("Bitter Pill: Why Medical Bills Are Killing Us"), hospital prices for drugs, supplies, and procedures are completely opaque. The answer from the so-called "charge master" about what anything costs depends on whether the patient is insured or uninsured (the latter often forced to pay multiple times more than the former) and who the insurer is. As it turns out, that mystery pricing is one of the hallmarks of the American model that spends $2.8 trillion a year (over 17 percent of GDP) on health care, more than Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain, and Australia combined:

As we examine other bills, we'll see that like Medicare patients, the large portion of hospital patients who have private health insurance also get discounts off the listed chargemaster figures, assuming the hospital and insurance company have negotiated to include the hospital in the insurer's network of providers that its customers can use. The insurance discounts are not nearly as steep as the Medicare markdowns, which means that even the discounted insurance-company rates fuel profits at these officially nonprofit hospitals. Those profits are further boosted by payments from the tens of millions of patients who, like the unemployed Janice S., have no insurance or whose insurance does not apply because the patient has exceeded the coverage limits. These patients are asked to pay the chargemaster list prices.

If you are confused by the notion that those least able to pay are the ones singled out to pay the highest rates, welcome to the American medical marketplace.

And in that "marketplace," prices vary widely from state to state, city to city and even block to block. Data compiled by the Centers for Medicare and Medicaid Services (CMS) in May found that "hospitals charge Medicare wildly differing amounts—sometimes 10 to 20 times what Medicare typically reimburses—for the same procedure," with the 3,300 hospitals analyzed showing wide variation "not only regionally but among hospitals in the same area or city." Making matters worse, the accelerating trends of mergers and private equity investments in hospital chains have spawned the use of unnecessary procedures and "code-inflation" to extract greater profits from patients, insurers and the federal government. And as the Washington Monthly and the Washington Post documented, the American Medical Association and its secret Specialty Society Relative Value Scale Update Committee (RUC) quietly set the prices Medicare and private insurers will pay physicians based on sometimes dubious assessments of how long a given procedure takes. So whether we're discussing colonoscopies, hip replacements, asthma inhalers, or ER visits, the only certainty is that the cost to Americans will be higher—sometimes orders of magnitude higher—than those faced by the citizens of Germany, Spain, Canada, Japan, or in just about any other major national economy.

But even if our American patient-as-consumer had access to transparent pricing information and knew everything doctors know about his or her treatment, health care would still not constitute a free market for a simple reason. In most cases, the transaction between the patient/buyer and the provider/seller is coerced. That is, when you're sick, you can't simply walk out of the market. You have to buy care from someone—or else. (Recent studies have the put the number of uninsured Americans who needlessly die each year as high as 45,000.) Worse still, because you can never know in advance about a bank account-draining illness or accident or condition that could require regular or lifelong care, insurance is the only path forward.

The element of coercion—that patients in emergency situations or not usually have no choice but to purchase treatment—is why the rhetoric of Rand Paul and his ilk is so cynical and dangerous. Lasik surgery, the GOP's favorite example of their ideal health care system at work, is entirely elective. Of course, you'd never know that from listening to the ophthalmologist Senator from Kentucky:

"Insurance doesn't cover Lasik surgery, the surgery to get rid of glasses," Paul remarks. "So it started at about $2,000 an eye, maybe even $2,500 an eye, and it's down in some communities to under $500 an eye because competition works and people call on average four doctors to get the price and see how much it's going to cost."
Give that a try the next time you go for chemotherapy, kidney dialysis or, say, rupture your spleen. Rather than spending time doing the medical equivalent of window shopping, it would be better to remember the advice of Dr. Paul Krugman:
There are a number of successful health-care systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn't work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.

That overwhelming evidence comes from just about every other economic competitor of the United States. And regardless of how they manage their nation's own complex health ecosystem of insurers, pharmaceutical firms, device manufacturers, hospitals, and doctors, in one form or another each relies on the same mechanism: rate setting.

To put it another way, countries as diverse as Germany, Japan, the UK, France, Switzerland, and Taiwan treat health care as a highly regulated utility, not a free market. Like access to water, telephones, electricity, and education, America's partners and competitors have decided that health care simply will be part of the social contract for their citizens in the 21st century. (Such a notion couldn't be more alien to the likes of the Heritage Foundation, which recently lamented that many American poor enjoy such luxuries as television, air conditioning, and cell phones.)  And to make it all work, government sets the prices that insurers, hospitals, drug companies, doctors, and pharmacies can charge.

In his 2009 book The Healing of America and companion PBS Frontline documentary Sick Around the World, T.R. Reid examined the different approaches used by the UK, Germany, Japan, Taiwan, and Switzerland to deliver universal health care. But while the UK's National Health Service (NHS) is a single payer system in which hospitals are run by the government and doctors employees of it, the other nations feature private insurers, hospitals, and physicians just like the United States but with one big exception. As Sarah Kliff explained, in the United States "it's that the federal government does not regulate the prices that health-care providers can charge."

Sick Around the World describes the four basic models including the "out of pocket" approach, the completely government-run system implemented in the UK, the Bismarckian social insurance strategies in Germany and Japan, the single-payer system in Canada and emulated by South Korea and Taiwan:

Reid reports next from Japan, which boasts the second largest economy and the best health statistics in the world. The Japanese go to the doctor three times as often as Americans, have more than twice as many MRI scans, use more drugs, and spend more days in the hospital. Yet Japan spends about half as much on health care per capita as the United States.

One secret to Japan's success? By law, everyone must buy health insurance—either through an employer or a community plan—and, unlike in the U.S., insurers can neither turn down a patient for a pre-existing illness, nor are they allowed to make a profit.

Reid's journey then takes him to Germany, the country that invented the concept of a national health care system. For its 80 million people, Germany offers universal health care, including medical, dental, mental health, homeopathy and spa treatment. Professor Karl Lauterbach, a member of the German parliament, describes it as "a system where the rich pay for the poor and where the ill are covered by the healthy." As they do in Japan, medical providers must charge standard prices. This keeps costs down, but it also means physicians in Germany earn between half and two-thirds as much as their U.S. counterparts.

Given the admiration it enjoys from conservatives like Megan McArdle and Avik Roy, Switzerland provides an especially helpful case study for evaluating the U.S. health care system. Unlike France and Japan in which the central government regularly negotiates prices and fees directly with providers, Reid explains:

The Swiss system is social insurance like in Japan and Germany, voted in by a national referendum in 1994. Switzerland didn't have far to go to achieve universal coverage; 95 percent of the population already had voluntary insurance when the law was passed. All citizens are required to have coverage; those not covered were automatically assigned to a company. The government provides assistance to those who can't afford the premiums.

How does it work? The Swiss example shows that universal coverage is possible, even in a highly capitalist nation with powerful insurance and pharmaceutical industries. Insurance companies are not allowed to make a profit on basic care and are prohibited from cherry-picking only young and healthy applicants. They can make money on supplemental insurance, however. As in Germany, the insurers negotiate with providers to set standard prices for services, but drug prices are set by the government.

Regardless, the American health system is unique in the world:
These four models should be fairly easy for Americans to understand because we have elements of all of them in our fragmented national health care apparatus. When it comes to treating veterans, we're Britain or Cuba. For Americans over the age of 65 on Medicare, we're Canada. For working Americans who get insurance on the job, we're Germany.

For the 15 percent of the population who have no health insurance, the United States is Cambodia or Burkina Faso or rural India, with access to a doctor available if you can pay the bill out-of-pocket at the time of treatment or if you're sick enough to be admitted to the emergency ward at the public hospital.

The United States is unlike every other country because it maintains so many separate systems for separate classes of people. All the other countries have settled on one model for everybody. This is much simpler than the U.S. system; it's fairer and cheaper, too.

Make that much simpler and much cheaper, all while producing health care outcomes that are as good or better than those in the United States. Thanks to the supposed free market in the United States, America's 40 million asthma sufferers have to pay $150 for an Albuterol inhaler, compared to $20 in the UK. On average, a colonoscopy in the U.S. ($1,185) costs double the amount in Switzerland ($655). An MRI cost four times as much here as for the Dutch; an angiogram is almost 30 times more expensive for an American ($914) than a Canadian ($35). It's plain that the $7,700 hip replacement in Spain costs six times more here. But as the charts sprinkled throughout this piece show, Americans spend much more (double the OECD average) while actually using less health care (half the physician consultations) than their counterparts in other countries. Touted by Republican free marketeers as "the best health care system in the world," America's is the costliest and among the least efficient even as it fails to measure up to those of our trading partners and allies.

It doesn't have to be this way. Thanks to the Affordable Care Act, improvement has already started. America's medical inflation has slowed dramatically, a trend which could eliminate much of the nation's long-term debt challenge if it continues. (Much of that slow-down is due to the impact of the recession which began in late 2007.) By 2023, roughly 27 million of America's uninsured will gain coverage under the Affordable Care Act. Some of the insurance industry's most grotesque profit-making practices—like excluding those with pre-existing conditions, using "rescission" to drop policyholders when they get sick, "purging" and "pricing out" customers who cut into the bottom line and annual and lifetime benefits caps—are illegal now. (Others dirty tricks from the insurers' playbook, like drastically narrowing physician and hospital networks, need to be curbed.)  As Michael Moore suggested in his December 31 New York Times op-ed, expanding Medicaid to all 50 states, adding a public insurance option to the health care exchanges and potentially expanding on Vermont's single-payer experiment could all help the United States get closer to the goal of universal coverage for all. (But more impactful reforms—like single payer or non-profit, private basic insurance plans, like negotiated pricing with hospitals, doctors, and drug companies, like transitioning from fee-based to capitated payment models and like free medical school tuition in exchange for physicians' reduced incomes—all seem beyond the politics of the possible.)

But even then, American health care will still be more expensive that it should be and less equitable than it could be. That's because for the foreseeable future, American health care will still be viewed as the free market conservative ideologues demand instead of the public utility it should be.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  the new drug war -- prices (23+ / 0-)
    In Tampa, Florida, Marilyn Weisman also depends on charity for treatment. The 72-year-old thought she had a bad rash. She turned out to have cutaneous T-cell lymphoma, a rare cancer. Though she is insured, she could not afford her share of the payment for the drug her doctors recommended. So a pharmacist at her hospital, Moffitt Cancer Centre, helped her to apply for charitable aid. Mrs Weisman’s situation is surprisingly common for American cancer sufferers. Many insured patients in one of the world’s richest countries cannot afford their medicines

    From the radical left at The Economist ;-)

    "Your victory has demonstrated that no person anywhere in the world should not dare to dream of wanting to change the world for a better place." -- Mandela

    by agoldnyc on Sun Jan 05, 2014 at 11:19:43 AM PST

    •  They are nothing but (6+ / 0-)

      big monopolists trying to corner the market and crush the competition. They are doing a damn fine job of it too, in the USA.

      Conservacritters in Congress talk out one side of their mouth about the free market and with the other side they shut out competition for their big money campaign donors. Repubs only stand up for the free market until their donors tell them to lie down and roll over.

      Then the politicians come up with all kinds of harebrained plans like taxing medical devices to pay for insurance subsidies. It doesn't control costs. It would be a lot easier and simpler and get the job done better to just control the medical device prices in the first place & forget about taxes.

      •  christian nation (0+ / 0-)

        A christian nation that thinks health care  for all is about profits and not its citizens.

        Americans can afford their  wars but not health care for all of its citizens. OK they cant afford their wars but they are willing to borrow and print money to keep their war machine alive and well. $$$$$$$$

        In the words of Jesus: they have eyes and ears but they cannot see or hear; nor do they understand.

        The teachings of Jesus and capitalism American style go together like oil and water.

    •  The new drug war -- prices (1+ / 0-)
      Recommended by:
      Nisi Prius

      Yet, the CEOs of these "healthcare" companies "earn" between $25,000.00 and $50,000.00 an HOUR, NOT a YEAR, an HOUR . Check it out on your computer ! A so-called "healthcare insurance" company is a politically supported, monopolistic, fraud that does absolutely NOTHING for health care except increase cost by the BILLIONS of dollars . The support of "healthcare" insurance companies by politicians, YOUR insurance commission, YOUR state and federal representative and YOUR state and federal senator is nothing more than a criminal enterprise . Show me I'm wrong !!??      Cordially,    D.J. Ludwig

  •  Thanks nt (0+ / 0-)

    nosotros no somos estúpidos

    by a2nite on Sun Jan 05, 2014 at 11:29:34 AM PST

  •  but Innovation! ... but Efficiencies! ... but (5+ / 0-)
    Recommended by:
    a2nite, semiot, kareylou, SaraBeth, Laconic Lib

    but, but, Corporate Chief's Pay!

    [Actual photo of Gaultian Overlords at thought of public utility argument about healthcare:

  •  I'm not sure that we could regulate it seeing (3+ / 0-)
    Recommended by:
    Roadbed Guy, annieli, T Maysle

    how poorly we do on our medicare or medicaid. I don't mean that we do poor administering the programs, that overhead is cheap, I mean how we still pay $40K for a hip. Until we can train the "providers" to be content with just a middle class income and find a way to reign in the power of large hospital groups it's going to be quite a struggle to lower costs.

    Currently a hospital group can pay a congressman many many times what I can. My senator spends an inordinate amount of time dialing for dollars.

    “Conservation… is a positive exercise of skill and insight, not merely a negative exercise of abstinence and caution…” Aldo Leopold

    by ban nock on Sun Jan 05, 2014 at 11:38:47 AM PST

  •  Utility is a good pricing model (14+ / 0-)

    The key to "utility" economics is that a utility is assumed to not be subject to normal competitive forces, even if there are multiple providers.  There may be one electric utility or a dozen taxi companies, but when you hail a taxi, you don't know which company you're going to get, so it is not a regular market.  And because of this lack of market forces, the price is regulated.  Utility prices are generally (by law) set at levels that provide a fair rate of return on invested capital, after all reasonable expenses are met. Expenses are however subject to scrutiny.

    As such, the positive externalities of a utility's service are retained by the buyer, not the utility.  What does that mean? If you buy electricity and the light lets you stay open later at night, you pay for the electricity, but the electric company doesn't have a claim on your higher profits.  A gas utility has no share of a baker's profits.  Telephone companies used to be utilities but they're generally not so regulated any more and are trying to find ways to get more of the profit, but that's a really complex topic that most liberals, unfortunately, don't understand any better than most conservatives.  But it also is not as life-or-death as health care.

    Obviously health care has positive externalities.  Drug companies are the worst offenders in trying to capture these. Cancer drugs are now priced in the US by the thousands of dollars per month that they think they can get for keeping you alive, regardless of what they cost to produce or even develop. Of course no other country allows this, and neither should the US.

    •  Utility pricing can also be set by corrupt deals (2+ / 0-)
      Recommended by:
      divineorder, Calamity Jean

      with politicians. Here in Indiana we are still fighting the zombie Rockport Coal Gasification Boondoggle that provides for citizens to pay above-market prices for syngas for 30 years. We thought we had put a stake in its heart, but it appears that we will need to embalm and cremate it next time.

      In Indiana, Carbon Taxes You (Not)

      A court had invalidated part of this unconscionable contract, but the Indiana Supreme Court has since restored it, apparently on the theory that Free Market government can do no wrong. :(

      Ceterem censeo, gerrymandra delenda est

      by Mokurai on Sun Jan 05, 2014 at 01:37:26 PM PST

      [ Parent ]

      •  Good luck. (0+ / 0-)
        Here in Indiana we are still fighting the zombie Rockport Coal Gasification Boondoggle that provides for citizens to pay above-market prices for syngas for 30 years. We thought we had put a stake in its heart, but it appears that we will need to embalm and cremate it next time.  
        Sounds like you're going to need it.  

        "My country, right or wrong; if right, to be kept right; and if wrong, to be set right." -- Sen Carl Schurz 1872

        by Calamity Jean on Sun Jan 05, 2014 at 07:24:48 PM PST

        [ Parent ]

    •  Healthcare is an expense, its overhead. (0+ / 0-)

      If the federal (or state) government were to operate a single-payer system, it would be as if the government was just covering an expense incurred by the population as a whole. It would be a lot like a business paying its monthly electric bill, which is just one of those monthly expenses that make up what accountants call overhead.

      "For all those whose cares have been our concern, the work goes on, the cause endures, the hope still lives and the dream shall never die." --Senator Ted Kennedy

      by Blue Silent Majority on Sun Jan 05, 2014 at 03:02:23 PM PST

      [ Parent ]

    •  Entergy New Orleans (1+ / 0-)
      Recommended by:

      announced bankruptcy the day AFTER Katrina and the Federal floods.  So Entergy Louisiana declared they could not sell discounted power to Entergy New Orleans because they were bankrupt.

      To protect their shareholders, those of us who returned paid a 'fuel surcharge' of hundreds of dollars every month.   One month, I used $30 in gas.  About $70 in electricity.  The total bill was over $300- to make up for all the displaced by the storm.  We even got charged for service to homes that had been destroyed.

      And because the City had sold off our public power company to a private owner, there was nothing we could do. Except pay.  No way to speed up return of service, no means to make allowance for the disaster.  
      Because we rent what we used to own.

      Joy shared is doubled. Pain shared is halved. Spider Robinson

      by nolagrl on Sun Jan 05, 2014 at 04:22:41 PM PST

      [ Parent ]

  •  Thank you. Excellent points in this post (8+ / 0-)

    US health care is not even a market, just a racket.

  •  The original rationale for regulating was ... (9+ / 0-)

    ... that providers of services fraught with the public interest stood " ... at the very 'gateway of commerce,' and take toll from all who pass."

    The phrase comes from lawsuits challenging regulation of coaches, warehouses and grain elevators, businesses who were able to take an extortionate amount from customers. Although they were many providers and they argued that they were in competition with one another, they could operate as a virtual monopoly.

    The analogy of regulation for agriculture interests in the 1880's to health care in 2014 is certainly not perfect. But there can be no reasonable doubt that health is firmly within the public interest and we're all paying for the care provided by hospitals whether we are patients, insureds or taxpayers.

    Which would you vote for: a public utility-type set of regulations which would have to be pervasive to be any good at all ... or Medicare for Everyone?

    A strong case can be made for either if Obamacare doesn't work well enough.

    2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

    by TRPChicago on Sun Jan 05, 2014 at 11:58:50 AM PST

  •  Excellent synopsis! (4+ / 0-)

    We don't have health care, we have corporate profiteering.

    The most disturbing thing about our health care system is the huge number of Americans that are ignorant about the issue and just repeat the Fox lies which are nothing but corporate propaganda.

    I predict we will have decent health care when a majority of Republicans believe in evolution. Sadly, I doubt I will live to see it. Maybe my son will be so lucky.

  •  a very thoughtful proposal, although as we know (6+ / 0-)

    with the public utility model in the US, it still has far too many corporate features, especially after the deregulatory movements since St Ronnie

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013

    by annieli on Sun Jan 05, 2014 at 12:00:57 PM PST

  •  Sigh.... (11+ / 0-)

    Anyone who is just damned sick and tired of the fu*king money pit that pretends to be healthcare in this country, please raise your hand.  
    And anyone who is just damned sick and tired of the fu*king corporations (through their mega monied funding of congress and senate folks) that make the healthcare debacle which we have to deal with in this country, please raise your hand.
    The ACA is a good start, sorta like a candle compared to a laser, but we have SO far to go.

    I think, therefore I am........................... Plus ca change, plus c'est la meme chose....AKA Engine Nighthawk - don't even ask!

    by Lilyvt on Sun Jan 05, 2014 at 12:05:17 PM PST

  •  The problem with this country is capitalists. (12+ / 0-)

    They whine about entitlements and welfare queens, while they drain and waste every dime in the US economy.  

    We will never be able to serve the best interests of the many because then those almighty capitalists would actually have to figure out how to be competitive and stay in business.    Without our tax dollars and government money, how would they live????  

    What we need is a Democrat in the White House.

    by dkmich on Sun Jan 05, 2014 at 12:16:10 PM PST

  •  I like to think of (4+ / 0-)

    the ACA as a baby step.  

  •  So single payer isn't the answer (2+ / 0-)
    Recommended by:
    TerryDarc, Calamity Jean

    or to put it another way the issue seems to be that other countries are controlling, among other things, physician salaries and hospital costs, without regard to the methods of financing.

    (They are also controlling drug costs, but in that case are somewhat benefitting from subsidization by us.)

    •  Single Payer is One Possible Answer (8+ / 0-)

      There are many possible ways to crack the nut of health care access and cost.  But whether the answer is a single-payer government insurance plan or private, non-profit "sick plans," setting rates for hospitals, doctors, and drugs is the common, inescapable ingredient.

      A couple of other points. First, the experience of other countries shows that health care "reform" is a continuous, never-ending process in which battles over budgets, rates, compensation have to be relitigated every few years.  The other is that citizens have to have skin in the game, either through taxes applied to their health plans (Taiwan) or through their payments for private plans (Germany, Switzerland).  While lower income citizens may get free or subsidized coverage, everyone has to participate to fund the system.

      •  Monopsony, meaning “single buyer” (0+ / 0-)

        Medical prices are controlled in various ways in the rest of the developed world. In Japan, the land of $100 melons and tiny $10,000 per month apartments, all medical care prices are listed in a book, thicker than the Manhattan telephone directory. The prices set in the book are usually less than a third of those in the USA. An MRI that costs $1,200 in the USA costs $88 in Japan. Japanese insurance companies are private as are most doctors. Japan spends less than a third per capita on medical care than America. However, the Japanese are greater consumers of medical care than Americans. They visit doctors and hospitals more often, have much more diagnostic tests such as MRIs. They also have better health outcomes as measured by all metrics such as life expectancy. They also wait less for treatment than Americans do as Japanese doctors work much longer hours for their much lower incomes.

        Japan’s explicit price controls are roughly emulated in other countries via the use monopsonistic systems. Monopsony, meaning “single buyer” is the flip side of monopoly. A monopolist sets prices above free market equilibrium. A monopsonist sets prices below free market equilibrium. It does not matter if there is an actual single payer or many buyers (or payers) whose prices are set by the government or by insurance companies in collusion with each other. More competition among sellers generally leads to lower prices. However, more competition among buyers leads to higher prices. . ..."

        •  ...quite interesting... (1+ / 0-)
          Recommended by:

          ...single buyer vs. single payer. Me thinks it's one and the same. If you have a single payer...that payer IS the single buyer...

          Welcome from the DK Partners & Mentors Team. If you have any questions about how to participate here, you can learn more at the Knowledge Base or from the New Diarists Resources Diaries. Diaries labeled "Open Thread" are also great places to ask. We look forward to your contributions.

          Ignorance is bliss only for the ignorant. The rest of us must suffer the consequences. -7.38; -3.44

          by paradise50 on Sun Jan 05, 2014 at 05:14:01 PM PST

          [ Parent ]

          •  Single prices through negotiation (0+ / 0-)

            is another option. Health economics big shot Uwe Reinhardt proposed standard regional prices for health care services, set via negotiations between representatives of insurance companies and health care providers. Having standard prices would cut back on administrative costs.  Negotiated rather than set by the government could be more palatable & might have a better outcome, to the extent that sometimes government set prices are just too low.
            Improving our health care system is a complicated problem, but the good news is there are many options to make it better.

  •  Krauthammer is a bitter old man (4+ / 0-)

    All he does is spew insults and bile and then throw in a few "balance" words to make it sound like he's an intellectual.

    He's a puppet pretending to be smart being used to fool stupid people, nothing more.

    Like fellow fraud "intellectuals" Bill Kristol, John Fund, and John Yoo, these people are laughed at by real academics.  They are performers, nothing more.

    •  Krauthammer is a tool... (3+ / 0-)
      Recommended by:
      a2nite, Nisi Prius, Calamity Jean the classic worker-socialist sense of the word. I'm not sure how stupid he thinks his readers/listeners are but his opinion of them must be in the toilet.

      He is a bad joke, in poor taste and a liar. Racists who get their insurance through work or Medicare are his base and should be ashamed of themselves.

      What stronger breast-plate than a heart untainted! Thrice is he arm'd, that hath his quarrel just; And he but naked, though lock'd up in steel, Whose conscience with injustice is corrupted. Henry VI Part II Act 3 Scene 2

      by TerryDarc on Sun Jan 05, 2014 at 01:03:58 PM PST

      [ Parent ]

  •  Another overview from MIT (2+ / 0-)
    Recommended by:
    TerryDarc, Calamity Jean

    Technology review on medical costs and great reading-why does new and better  technology lower the cost of "doing business" for other sections of the economy but not in medicine?? Link to the Dec issue:

  •  Someone should post how many HC providers there (1+ / 0-)
    Recommended by:

    are and the overhead each charges, and the CEO pay for each.

    In CA there are over a dozen versions of Blue Cross and I think each CEO makes multimillions in compensation.  Expand that data for the entire 50 states.

    That information would have to change minds in favor of the ACA or the single payer system that it should have been.

    I think that Republicanism is revealing itself as a personality disorder, not so much an ideology." -- Naomi Klein

    by AllanTBG on Sun Jan 05, 2014 at 12:47:55 PM PST

    •  Or we could just point to lives and treasure (4+ / 0-)
      Recommended by:
      a2nite, Calamity Jean, Em, AllanTBG

      being saved with more than 9 million people, so far, getting covered by one of several parts of the ACA, including the Exchanges, Medicaid and SCHIP expansion, and keeping children on their parents' policies to age 26. See Kossack brainwrap's spreadsheet and graph at, and his frequent Diaries on newly-released numbers, state by state. The site has been quoted at the Washington Post, Forbes, and the White House. We are just now putting together a page of media links there. The most fun link is at a Firefly fan site. Shiny!

      Ceterem censeo, gerrymandra delenda est

      by Mokurai on Sun Jan 05, 2014 at 01:45:31 PM PST

      [ Parent ]

  •  the destination is universal healthcare and this (1+ / 0-)
    Recommended by:

    is another scenic view /rest stop on that highway, just as exchanges and single payer are...

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013

    by annieli on Sun Jan 05, 2014 at 12:58:49 PM PST

  •  I nearly had a heart attack when I saw this (5+ / 0-)

    healthnet-claim-snip photo healthnetbill-snip_zps1f252c8f.jpeg">
    This for an hour and a half outpatient procedure (sinus surgery to remove polyps). Of course, the "negotiated" price was some $102K less. Wow, that HealthNet is really good at negotiating ~ !

  •  BINGO!!! (1+ / 0-)
    Recommended by:

    When my husband had his stroke that nearly killed him in 2006, he had 4 CT scans that cost a bit over $400CN/each. All paid for by the Province.

    In researching the costs in the US at that time, it would have been more like $1,500US/each.

    "Growth for the sake of growth is the ideology of the cancer cell." ~ Edward Abbey

    by SaraBeth on Sun Jan 05, 2014 at 01:33:22 PM PST

  •  Missing piece - Government spending on health (3+ / 0-)
    Recommended by:
    Mokurai, a2nite, Calamity Jean
    What government spends the most on health care?

        Is it Canada or the United Kingdom, which are famous (or, if these stories are any indication, infamous would be a better description) for single-payer healthcare systems?
        Is it Sweden, the home of the cradle-to-grave welfare state?
        Or France, the land of the world’s most statist people?
        How about Italy or Greece, nations that have spent themselves into fiscal crisis?

    Nope, nope, nope, and nope.

    The United States spends more money, on a per-capita basis, than any of those countries. Here’s a chart from a Forbes analysis prepared by Doug Holtz-Eakin and Avik Roy.

    I chose a far-right website's graph for 2010 so there's no argument about "socialist" OECD distortions of the data. Since I'm a Luddite unable to post the graph, it has US at $3,967 per person, Canada at $3,158, UK $2,857, Sweden $3,047, France $3,061, Italy $2,359 and Greece $1,371 (these are the countries that are cited above).

    To summarize: U.S. governments combined spend more per person on health care than any other government in the world (except Norway, Netherlands, and Luxembourg) yet only provide coverage to old people, poor people, and government workers (including the war department). The other governments cover nearly 100% of their populations for less per capita.

    What this means is that if the U.S. chose a universal health care system - pick one - it could easily cover everybody without having to raise taxes; the money's already been spent (i.e wasted). Individuals would cheer, businesses would cheer, federal, state and local governments would cheer.

    (Whether you read the right-wing propaganda at the link, I'll leave that up to you.)

  •  fly to Spain (2+ / 0-)
    Recommended by:
    divineorder, Nisi Prius

    Get a hip replacement. Come out with spare change even after the airline ticket.

    •  I already do that for Dental Work, except (0+ / 0-)

      not Spain, but Costa Rica.

      Move Single Payer Forward? Join 18,000 Doctors of PNHP and 185,000 member National Nurses United

      by divineorder on Sun Jan 05, 2014 at 02:38:13 PM PST

      [ Parent ]

    •  The trouble is, if you need a hip replacement, (1+ / 0-)
      Recommended by:
      fly to Spain
      Get a hip replacement. Come out with spare change even after the airline ticket.  
      it means that you've broken your hip, and you can't be moved without being in screaming pain.  You have to lie flat.  You'd need an air ambulance to get you to Spain.  Even then you'd be in agony at every bump or change in angle of the flight.  

      My father broke his hip about a year and a half ago, so I know way too much about this.  

      "My country, right or wrong; if right, to be kept right; and if wrong, to be set right." -- Sen Carl Schurz 1872

      by Calamity Jean on Sun Jan 05, 2014 at 07:40:09 PM PST

      [ Parent ]

  •  This is a great diary (3+ / 0-)
    Recommended by:
    Skyye, Mr Robert, Laconic Lib

    It's too bad this stuff isn't being broadcast by the news media. It's too bad there is so much disinformation out there.

    None are so hopelessly enslaved, as those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. -Johann von Goethe

    by gjohnsit on Sun Jan 05, 2014 at 02:44:48 PM PST

    •  with permission we could send it to our local news (1+ / 0-)
      Recommended by:

      do a you tube recap, all follow it everywhere and promote it, how about some I reporting, is there something creative there we could do to get this info and concept out, could we somehow let the people understand that we are behind the curve other countries have figured out in all moral humane thinking?

      There are so many creative minds here, how can we band together and take the concepts we see forward to viral and common knowledge.

      Here at our hose we had this very question, why healthcare can't be just like all other public utilities, it is certain to meet the requirement.

      Yes thanks so much for this diary, it provides an option our current system will not offer.

  •  We could have just picked up the rule book (0+ / 0-)

    from the Netherlands and said we are going to do this .
    We would have been so far ahead of where we are now .

    "please love deeply...openly and genuinely." A. M. H.

    by indycam on Sun Jan 05, 2014 at 03:24:52 PM PST

  •  Policy and politics (1+ / 0-)
    Recommended by:
    But for all of the furious fighting over the law these past five years, Obamacare was always an evolutionary reform grafted onto the existing American health care system.
    The ACA is evolutionary in terms of policy, but revolutionary in terms of politics. As an NYT letter writer points out, "It remains remarkable, however, that for all the technical snags and shortcomings of the Affordable Care Act, America got anything resembling a collective plan after a century of efforts that were largely unsuccessful."

    The ACA may not be single payer or even have a public option, but as one of the most hard-won legislative victories in my lifetime, it is a political miracle. The failure of much of the progressive commentariat to recognize this and give credit where due is to its detriment.

    "There is no room for injustice anywhere in the American mansion." Lyndon Johnson

    by pkgoode on Sun Jan 05, 2014 at 03:38:27 PM PST

  •  A few years ago (0+ / 0-)

    I had a heart attack. The bill was $45,000. I ended up paying $16,000 (Medicare coverage). A person I met in rehab had basically the same procedure as me and also got a bill for $45,000. He was not on Medicare and had no insurance. They gave him a payment plan. He said he was not going to pay it. I lost track of him. But it shows what happens without insurance of some kind.

  •  Another problem is the expense of an MD (0+ / 0-)

    Education including undergrad followed by nursing education.

    Doctors have to pay for their student loans back, hence another reason why fee for service  pay is inflated.

    nosotros no somos estúpidos

    by a2nite on Sun Jan 05, 2014 at 04:37:30 PM PST

  •  The USA is the last holdout with market-priced med (1+ / 0-)
    Recommended by:

    For 75 years, it was said that Roosevelt’s New Deal saved capitalism. By softening the rough edges of the free market capitalism with reforms such as social security and unemployment insurance, FDR may have prevented adoption of much more radical changes.

    75 years from today it is unlikely that anyone will think Obama saved market-priced medical care. Rather, he only prolonged it, and that will not be thought of as a good thing. In the developed world, market-priced medical care still exists only in the USA. It is only a matter of time until market-priced medical care joins communism, slavery, racial segregation and fascism as systems that no longer exist in developed nations.

    The USA is the last holdout with market-priced medical care not because of any inherent conservative or free market ideology. Rather, as the wealthiest nation that ever existed we are the last ones who can afford it. Switzerland was one of the last advanced economies to abandon market-priced medical care. It is arguably a greater bastion of conservatism than the USA. Switzerland's women were not granted the right to vote until 1971.

    During the debate as to whether Switzerland would abandon market-priced medical care there was considerable concern about how it would affect the major Swiss pharmaceutical giants such as Hoffmann-La Roche (RHHBY) and Novartis (NVS) which was Sandoz  prior to the merger with Ciba in 1996. However, it was then realized that the Swiss pharmaceutical giants made much of their profits in the American market.

    The reason that no nation, including the wealthiest can allow markets to set the prices of medical care indefinitely is that demand for medical care is inelastic. Demand for a good or service is inelastic if a percentage increase in price results in a smaller percentage decrease in the quantity demanded. Basic economics tells us that sellers facing inelastic demand will continuously raise prices until prices reach the elastic portion of the demand curve. Consequently in every developed country in the world, all goods or services with inelastic demand have their prices regulated by government. Medical care in the USA being the only exception..."

  •  Excellent article (0+ / 0-)

    Thank you, Jon.  The reason Obamacare is so vital at this moment in our history is exactly the discussion you have brought to the table.  There are adjustment this "reform," must take to become the health care delivery system the U.S. will eventually live with.

    That is why it is so maddening to hear the Republicans, the Cato Institute, the Heritage Foundation,, and all those naysayers on the right, continually tearing down what has not even had a chance to stand up.

    We are in the flux of transformation and we can't listen to those who want to either repeal, or change it to that popular Republican chant of "health savings accounts," and, if only we sold health insurance "across state lines," everything would be great.  

    One of the problems I see is with our American culture is the difficulty we have separating taxation for the common good from taxation that "takes money out of my pocket and gives it to the poor, the lazy bums, and undeserving."

    These countries that have the thriving health delivery systems, with better longevity rates than the U.S., less infant mortality than the U.S., and just better outcomes do have higher taxes for the most part.

    Of course, nobody likes to pay taxes, but having conversations with many locals from many of these countries comparing their system to ours, none would trade their system for ours.

    These countries, for the most part, also have a more friendly higher educational system that costs less than ours.  They are not only living with peace of mind regarding their health care from birth to death, but can benefit from a system that promotes higher learning.

    Our priorities are skewed.  What is important is a healthy, well-educated populace.  That is what is needed to take this country into the 21st Century.  We are going to be left behind if we are not vigilant.

  •  Publicly-Funded Healthcare (0+ / 0-)

    The target I have in mind is what I call "publicly-funded healthcare". By that I mean that the federal government pays for all essential healthcare out of a progressive tax.

    To get there, the U.S. should nationalize the health insurance companies and roll all the systems into one. We should have a very small set of plans. (How many ways can you provide all essential healthcare to everyone?) Cutting the number of plan is important for cutting costs because each time there's some variance people have to figure it out and act on it.

    Healthcare should be paid out of a progressive tax because otherwise the poor subsidize healthcare for the rich.

    While we ought to really aim for a socialist system, like the British system, the unfortunate truth is that Americans are so hostile to the government running things that they would never go for it. That, of course, was the best system because it provided the best care for the least money of just about any of these. But, of course, the Tories are in the process of ruining it by introducing "market reforms" (which have caused the administrative costs to skyrocket). When we borrow a system, we have to be careful not to borrow one whacked by the conservatives.

  •  RUC does not set prices (1+ / 0-)
    Recommended by:
    a gilas girl

    The article's description of Relative Value Scale Update Committee (RUC) is fundamentally wrong and demonstrates a lack of understanding for the recommendations made by the AMA-convened group of expert physicians.

    The RUC does not set prices for physician services.  The role of the update committee is to appraise the resources required to provide care to patients and offer recommendations to Medicare that provide credible insights into the complexities of patient care.

    Medicare officials are the ultimate decision-makers about setting payments for physician services and the government is not obligated to use RUC recommendations when making final decisions.

    •  Thanks for that clarification (0+ / 0-)

      good to draw the attention of the appropriate experts.  I hope you'll continue to contribute to our discussions about health care reform here.

      Welcome from the DK Partners & Mentors Team. If you have any questions about how to participate here, you can learn more at the Knowledge Base or from the New Diarists Resources Diaries. Diaries labeled "Open Thread" are also great places to ask. We look forward to your contributions.

      Words can sometimes, in moments of grace, attain the quality of deeds. --Elie Wiesel

      by a gilas girl on Tue Jan 07, 2014 at 05:17:17 PM PST

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site