I have thought long and hard about this subject. In the past I had always believed that people should be responsible for their health care. Health insurance in this country has to be one of the biggest rackets I have ever seen.

For example if you work for a small company, such as mine. For family coverage my cost would be $721 a month, $150 of which my employer would pay. Now my wife used to work for a very large corporation and family coverage was $210 a month.

I was always puzzled as why the big difference. So I did some research and asking around. The larger the company and employees paying into a group insurance plan, the lower the premiums will be because of the lesser risk and greater money flow coming into the insurance company.

Now before my conservative brethren stop reading hear me out. If medical insurance is based on the sheer number of people under a given policy,then if the entire nation was under a single policy, wouldn't that be even lower?

It would still be run by insurance companies and one single insurance company would not be made to shoulder this huge policy, but the government would have to administrate it to regional companies in every area.

Now this could keep the insurance companies happy because they would still get their premiums, and in fact would have FAR more people under policy. I am sure people would not mind paying a new medical insurance tax, because they would no longer pay an insurance premium.

There will be some who don't like this because of the fact there will be those who won't work and still get health coverage. It happens now with the roads we drive on and the parks we use, why not let it count for something like saving a life?

Question for debate:

Would a health care system like this work for the U.S.?

Would a health care system like this work for the U.S.?

I guess it will alarm you a little that I think you have seen the light. I believe that we should remove American health insurance from the workplace entirely. It has many negative effects on the economy. Among them is the inability for smaller start ups to compete on an even playing field for talent, and Americans staying at jobs because they have developed an illness or a condition and they cannot afford to change jobs and risk going uninsured.

As Sleeper says, what group would be larger than the entire American public. No the liberal in me sees a need for a government version to be out there, but don't panic we already do this directly (Medicare and Medicaid) and indirectly (somebody pays the bill when indigents come in for health care). The way I see this is that the nation should restart with a wide open enrollment, no preexisting condition. Other basic demographics can be figured in. We all go out and get our health insurance, and if we cannot afford our own a basic coverage plan will be provided.

After that we are on our own to keep up our policies. We can ask our employers for the raises that we deserve in place of the fringe benefits. The self-employed can take care of themselves easier.

The medical market is not a pure market. The government is needed to increase its efficiency. Don't panic, we already do this with our government in things like life and car insurance.

Some details would need to be hammered out, but I firmly believe we would all be a lot better off.

What we have presently is an anti-market. When we are covered, we want our insurance to pay for the best possible. We don't have an incentive to keep our medical costs down.

I would add a system that rates the insured on how they spend their medical dollars. If they consistently spend much below the average for regular and major services they would be at a certain rate adjustment. The same would go for the person who pays a higher than average amount for regular and major services.


Something to give us a better incentive to be better consumers after we get our insurance blanket.

I wrote a big paper last semester on healthcare. How exciting.

I would have to agree that a single payer system would be way more beneficial than the system we have going right now. Divorcing health care from the workplace is also beneficial to society as a whole, because right now there are many people who have coverage through their workplace but they end up losing their jobs, and thus their insurance, because of their illness. How fair is that? By allowing people to take time off and not lose their insurance, we are allowing people time to recover, return to work and be a productive member of society. It doesn't make sense that those who have been working, should lose their job and their insurance because they got sick. Source (also cited in the Bankruptcy thread a while back): Link

Additionally, the reason larger companies insurance plans are lower is not only because they have larger cash flow, but because they can negotiate lower prices from hospitals because these insurance companies have such a large and desired consumer base. That is ridiculously unfair for those who are uninsured, because they do not have negotiating power. There are very few companies that have different set prices based on your income, and even fewer (I imagine) who charge more to those with low incomes. Source: link

Our system as it is currently is inherently unfair, and not only for the above reasons. But I should really be writing a paper, so I dont feel like articulating. But one more thing, for those who moan about how nationalized healthcare forces us to "ration out" healthcare, we're pretty much doing the same thing right now:link



Just like Canada, but without the added benefits!
Oh and one more thing, our system also costs more because of the added bureacracy of insurance companies. With a single payer system, we bring down administrative costs. Source:Link
and
link



Thats from part of the paper I wrote, which cites the two sources I linked to above.


Edited to fix links -Jaime

Thanks for the links Kim. But I am trying to discuss this with as little politics as possible and some of the articles in your links are just too partisan. They do show some great numbers but I think we could do without the political vitriol contained in them.

Health care is one area I believe we should keep our politics at home.

I just wanted to interject something here.

The inclusion of health insurance as a standard offering in an employment package is a fairly recent development. None of my four siblings or I were covered under a health insurance policy when we were born (between 1952 and 1965) and the hospital bills were, at most, a few hundred dollars -- that's for a three-to-seven-day hospital stay. Nowadays, a birth can cost more than a couple's annual salary.

I believe that health care costs rose IN PART as a result of health insurance becoming more prevalent.

Good point Vibiana. People like to bring up that per person we spend more than other countries in our current system. What you gain in health care providing efficiency, you pay for with a certain degree of inefficiency to the entire economy. Lets look at what it would take to emulate Canada. Per capita American’s spend over $5000 a year on health care. Lets say the costs of public health care are cut to half that much. You are still looking at a $750 billion public program(300 million Americans times $2500). This would increase our $2.2 trillion budget by over 30% and would be larger than the military budget or SS. Where does the money come from? 7-8% of German paychecks go to their system, with the employer matching that much. Is it any wonder that jobs are going elsewhere?


If they don't mind, should we be able to opt out of the program? There are a lot of ways to do this. I wouldn't support it right now without more details on the proposal.

Oh my god Sleeper, are you joking? Health Affairs is too partisan? The Wall Street Journal? It may have a conservative bias, but it's still one of the most well read newspapers in the country for a reason. I would say only two of my links are biased, and even though they are, there is still some solid information in them. I think AD members are smart enough to figure out where the bias comes in and what the fact is.

And this might be a bit shocking for you to learn, but this is a political debate board, so politics are going to be injected into the things. And this very topic is a highly charged political debate. Why start a thread on it, if it wasn't?

I don't think I was being inflammatory, just providing information.

Eeyore, I don't disagree with the things you (and Kimpossible) are saying, but I think this statement right here is where we probably digress. While I see the potential for savings in the health care industry, I am skeptical whether they will be realized....especially to the degree where I will have the same coverage I have currently, for the same money. In short, will the cost savings in the system make up for the cost of providing all those currently uninsured with insurance? If not, exactly what would the difference be, so that I could evaluate it to see if the extra benefits provided were worth the cost. I would need to see rock-solid, iron-clad proof of this before proceeding. I have yet to see anything remotely close to such proof, therefore I am reluctant to favor changing the system. Let's face it...if this system really would work, and really did offer these savings in efficiency at lower cost....wouldn't more bills be out there proposing these changes? I find the lack of such very telling.

Without a doubt, the economies of scale of a national health care system would help drive down costs.

But that alone would only be a good start at best.

As Eeyore pointed out, we already have a national healthcare plan in Medicare and Medicaid. My father gets cortisone shots every three months, paid for by Medicare. Five minutes after his name is called we’re walking out the door. Cost: $650, of which the government pays around $300, determined to be a fair market price. How many of us can make $7800/hour?

Are doctors over paid? – you bet
Are hospitals making too much? – without question

Sleeper, I’m not trying to take your thread into a different direction, but when discussing a national healthcare plan, especially from the angle of insurance, every aspect must be examined because they are all cost drivers.

See this is what I am talking about people bringing up doctors or hospitals making too much, this is how it becomes a political discussion.

In my opening post I said nothing about how much doctors or hospitals make. What I am talking about is the huge difference in large insurer pools and small ones.

If this is achieved in a national level premiums would be incredibly low.

Sleeper, I think you are oversimplifying things. Without taking these other factors into account, I don't think you can make the statement that premiums would be so low, or that other factors might not go up. The difficulty in switching to a national premium is that many other issues are involved, and they have to be considered in the discussion.

Hobbes, one of the links that I posted is study done that compares different countries healthcare systems. It was run in Health Affairs not too long ago. In this comparison, it provides tons of different information about who has a better system in terms of quality, price and availability. The conclusion was that the United States is spending more on healthcare and receiving lower quality care, due to the fact we pay more for everything from doctor's salaries to medicine to equipment. Price difference are normal from country to country, but we are paying a ridiculous amount more than other industrialized countries. One of the biggest reasons for the price difference, according to the study, is our "highly fractured" payment system which means there is more personnel than necessary in hospitals to figure out payment. By having a single insurance system, we would reduce our administrative costs by about half (if we use Canada's model as an example, as Ive already cited above) and that would only be the beginning. If we ONLY switched to a single insurance system, but did nothing to stop doctors salaries, or how hospitals are run, or the rising cost of pharmaceuticals, or the price gouging, we would be still be saving money without sacrificing quality of care.

Its the fourth link in my post, if you want to see it for yourself and offer your criticisms.

Could not we apply that to pretty much every other industry as well? Why didn't the Soviet Union win the Cold War?

Here's a full quote that won't gobble up too much bandwith.

Perhaps this is because the US economy was larger than the USSR's?

Didn't Andrew Carnegie and many of his capitalist ilk use economies of scale to beat out there competitors. This isn't necessarily a socialist remedy. It is a way to create one consumer pool and create a better consumer situation for health care for Americans.

Why don't zebras have blue stripes too?

I see where you’re going, but communist aggression and out of control insurance premiums have little in common from a cause and affect approach which yields different results. But that would be a good topic.



It’s not a matter of politics, at least in this discussion (AMA lobbyist in DC are a different story). I never mentioned a political party or a member of a political party and I still have valid points. Sorry if you feel different but every aspect of insurance and their cost drivers has to be examined, if you feel they don’t then you’ve answered your own question in your opening post and in this reply: economies of scale will drive the cost down in almost every instance (but diminishing return has to be considered as well).

Outside of Maslov’s heirarchy of needs, but peripherally related, there are few things that a person in the United States HAS to have. And one of those is health insurance.

Sure an individual can opt to not carry health insurance but one incident can bankrupt the most prudent investor of everything they’ve worked for, that’s why most of us carry insurance. And the insurance companies, doctors, and hospitals know this and take full advantage. I’ve always labeled this a ‘forced industry’; sociological factors force us into their services.

I got home last night and while watching the local news there were at least 6 commercials about “The Women’s Pavilion”, “The Spine Center”, “The Cancer Center”, on and on, all local hospitals advertising their services. Thinking back, I never recalled ANY hospitals advertising their services when I was younger. Hospitals run as profit centers are at the core of any discussion concerning health care and if you’re discussing pooled national health insurance then you have to start at the hospital.

A little Econ 101



A single entity being able to perform a function at a lower cost than two or more entities is not the prevalent condition. It is actually fairly rare. In order for you to impose a government enforced monopoly you should need to convince the electorate that natural monopoly conditions do apply. I see little argument for home insurance or car insurance to be nationalized. Of course, those costs are not rising at the rates of health insurance. Now we must ask why health insurance costs are rising rapidly. Could it be because government is already to heavily involved in health care, thus creating a free good for too many people? Create a free good, you raise demand. You raise demand, you raise prices.

Only if supply stays the same. Don’t know about your locale but I’ve seen an explosion of hospitals and urgent treatment centers in my city.


My home owners went up almost 20% this year, and I’ve never made a claim (my guess is I’m paying for land slides and hurricanes) and my insurer posted near record profits. I could easily make a case for nationalizing what I earlier termed ‘forced industries’. Getting off topic but this would make a great thread.

[quote=Fife and Drum,Jul 1 2005, 09:15 AM]
[quote=Hugo]You raise demand, you raise prices.[/quote]
Only if supply stays the same. Don’t know about your locale but I’ve seen an explosion of hospitals and urgent treatment centers in my city.

[quote=Hugo]

Yes, a good point. The other thing is the government needs to stop restricting the supply of healthcare workers. The AMA is the most successful labor union in the country. The number of individuals in medical schools is artificially restricted. licensing requirements should be abolished. Probably most of the medical practices today could be fulfilled with someone with a two year associate degree.

Government needs to also stop restricting the supply of drugs by repealing the Kefauver Amendment. The FDA currently places huge barriers to entry for biotech companies.

As far as your home insurance, if mine went up 20% I would be looking up insurance companies in the phone book.

Any time there is a way for the country to become more efficient, I am in favor of it. Looking at France, Germany, England, and Canada you can see that the average cost spend on health care in the US could potentially be cut from over $5000 to $2500 using the advantages of economies of scale. This is efficient, but it is also expensive. Even at $2500 per year, universal health care would still be a minimum $750 billion program. Getting this amount of money will be detrimental to the economy in one way or another. Some ways of raising revenue are better than others though. I’m going to try and find out if there is an acceptable way, in my own opinion, to raise this kind of money.

For me personally to support a universal health care program, the money absolutely cannot come from income or payroll taxes. Since everyone receives the benefits of universal health care, everyone needs to pay into the system. Medicare’s 1.45% payroll tax for at least the employee would have to be removed. The employer would still provide roughly $71 billion a year from the old Medicare payroll taxes, leaving a gap of $679 billion of new revenue needed to fund the health care system.

First, lets look at the benefits. You are still going to have your copays but you will no longer need to by health insurance. I have some of the cheapest insurance you can get and I still pay $470 a year to cover just me. If I took insurance for a family of 4, it would be just over $1100 a year. You will have to check your insurance policies to see what you would save. The statistics show that the average US citizen pays $5000 a year. Removing payroll taxes will save you 1.45% of your income before taxes. For a person earning $40,000 a year, that is $580. Obviously, if you do not have health insurance, the benefit would be that you now have it.

Ways to raise tax revenue without increasing payroll, income, business taxes.

SALES TAX: A national sales tax would have a tax base of anywhere from $6 trillion to $7.4 trillion each year. At $7.4 trillion(most recent data from 2003), the national sales would bring in $74 billion for every 1% of tax. This would be in addition to state sales tax, which can be as high as 7.25%. This is an unfeasibly high amount of total sales tax IMO since a vast amount of foreign experience indicates that retail sales taxes cannot be collected much above 10 percent without breaking down.

CIGARETTE TAX: Smokers are more likely to be using the national health care system, so I would be shocked if a proposal did not ask them to pay more. Federal cigarette are currently 39 cents per pack raising revenues of roughly $7.7 billion. This is equivalent to just under $200 million of tax revenue for every 1 cent tax increase per pack. This is obviously not a strong source of federal revenue since it would take a $3.75 increase in federal taxes per pack of cigarettes to equal a 1% increase in the national sales tax.

GASOLINE TAXES: Smog causes health issues, so a small increase in gasoline taxes may be warranted to pay for universal health care. A one cent per gallon tax on gasoline produces a little over $1 billion of federal revenue per year.

ALCOHOL TAXES: No real justification for this, but since I’m doing excise taxes, we might as well look. Current alcohol tax rates are convoluted, but a few examples are $7-$18 per barrel of beer, 17 cents per gallon of wine(~$7 a barrel), $3.40 per gallon of sparkling wine, and $13.50 per proof gallon of liquor. Essentially, every drink that you have pays 1-8 cents to the federal government. These taxes create a total of $7.8 billion in revenue each year. Again, this is not a strong source of federal revenue since you would have to increase taxes over 9 times what they are today to create as much revenue as 1% of sales tax.

From all of this calculating I am left with an equation to balance(in billion of dollars):
Parameters:
ST = Sales Tax(%)
CT = Tobacco Tax(cents per pack)
GT = Gas Tax(cents per gallon)
AT = Alcohol Tax(percentage increase in all booze taxes)

$679 = $74*ST + $0.2*CT + $1*GT + $7.8*AT

If you increased the cigarette tax 6 cents per pack, the gasoline tax 4 cents per gallon, and double all alcohol taxes, you only raise $13 billion dollars. A national sales tax of 9% would be needed for the rest.

Is that worth a national healthcare system to our $40,000 a year earner? Maybe. Removing the excise taxes, (s)he pays 9% extra on everything (s)he buys. Take home pay is about $30,000, and what goes in, usually goes out if (s)he is anything like most of us. Additional taxes on sales would be roughly $2500 a year. If this is more than (s)he pays in health insurance(?) and Medicare taxes($580), then it is not worth it. It wouldn’t be worth it for me.

Healthcare could easily work, universal healthcare, if the goverment stopped funding stupid projects and saved that precious money for the well being of it's people. But they're not going to do that, because they're evil and greedy, and countinue to take your taxes, and spend them on stupid crap whilst you grow unhealthy and have to pay for medication, which inevitably gives them MORE money. They reap all the bennefits, and you gain nothing..

Like school, a useless endevure. Children in this country are some of the dumbest in the world. So obviously it isn't working. Why waste so much tax money in schooling?

Construction, don't we have ENOUGH roads and buildings to last us a lifetime?

Space programs, I don't know if there's aliens, I don't care if there's aliens, if they wanted to visit, much like my friends, they can bring thier happy pappy *** on down to my neck of the woods..

Feeding third world countries, this is a useless endevure. They live in a dust bowl, you expect your cutesy wutesy good intentions to change that? Besides, there's people here starving to death and the American goverment doesn't seem to care..

I could go on, but as you can see there is no need too..

Well, yes and no. Doctors are certainly paid an exorbitant amount, but a lot of their money goes into malpractice insurance premiums, etc. When a doctor can be sued for looking at a patient funny and insurance companies pay out way too easily (and jack up rates because of it), we can see that it all comes down to the insurance industry once again. Same goes for hospitals, although there they have to recoup costs from people who can't pay, illegal aliens, etc. I really can't think of too many for-profit industries that are required, by law, to serve people who cannot or will not pay for the services. Hospitals are going out of business left and right because they simply cannot afford to give their services away for free.

I think we need a major overhaul of the insurance industry. It'll keep costs down and hopefully allow more people to be covered. Right now, we're just headed down the road to catastrophic disaster.

No I can't see how you have proven that economies of scale will cut our health care costs in half in a national healthcare system. I won't repeat my earlier post on the limits to economies of scale. A moronic economies of scale argument can justify government control of all productive assets i.e. communism. It's been tried, did not work. There are problems with monopoly even when the profit motive is eliminated. One of these is that innovation is discouraged.

By the way, folks, government already pays over 60% of health care costs.

KimP, thanks...I will take a look at these. I am not against making changes in the system...I just want to make sure they don't make it even worse (which our gov't has a tendency to do too often). I definitely agree that there are major savings to be had...just concerned that we'd actually have them. So, I don't really have 'criticisms' as much as I might have 'skepticisms.' .

I tend to think the lack of market forces and price signals would eventually lead to a behemoth that would make the military-industrial complex look like a bargain.

On the other hand, I think that the US is losing out in employment and investment opportunities due to high healthcare costs - costs that are subsidized heavily (or done without) in other countries.

I've always favored the Swiss healthcare system: market forces, choice of insurers, choice of providers, universal coverage. In short, purchase of coverage is compulsory, low income individuals receive a partial subsidy. Insurers compete for customers, providers compete for patients.

I tend to think that the major causes of our rapidly rising healthcare costs are several:
1) no price mechanism: insurance acts as pre-paid healthcare, with copays only covering a small portion of costs.
2) de facto, but not actual, universal coverage: those with insurance subsidize those without through inflated hospital charges. Those without HC also have no price mechanism to self ration healthcare - in fact, they often use the most expensive providers (Emergency Departments) for routine and percieved health problems.
3) The AMA oligopoly
4) Again the AMA, but specifically the reliance on expensive technological treatments v. less expensive, but still promising, alternatives.
5) Long term patents, and process patents

I don't think doctor's salaries have a major effect on HC costs.

I've mixed opinions on malpractice: certain specialties may be affected more than others, but I think the bulk of influence by legal settlements is on the amount of lab work, and expensive equipment used.

Would a health care system like this work for the U.S.?

[/quote]

No. One policy means no competition, which keeps rates as low as they can be. WHo decides what this one policy will be, and government control of it? THat is a disaster just waiting to happen. Every country that has socialized medicine is inferior to the US in quality, customer service, and overall health care sastisfaction. SO why would we switch to a white elephant like socialized medicine. Sure our system could be improved to allow more access for small companies and lower income groups. One way would be to cap lawsuits against doctors. Trial lawyers are the greatest enemy to the healthcare system in America. THeir grubby hands are behind the exorbidant malpractice premiums. Additionally I think we should charge higher rates to people who smoke, are overweight, have diet or weight induced diabetes, high blood pressure and heart problems. People like myself, who has FREE medical care because I am in the military, yet rarely use the healthcare system should not be forced to pay for other peoples poor lifestyle choices and ignorance of basic nutrition and exercise guidelines.

This is 100% wrong. Ive cited studies already that show otherwise. Health Affairs published a study that compares the US healthcare system with 38 other countries, and determines that we are paying more but receiving less in the way of services and quality. We do not have the best equipped hospitals (Japan does), we have less physicians per capita than most of the other countries, and we spend more paying people to collect hospital bills than on actual healthcare.

Our system is a convoluted, bureaucratic mess. To say that competition keeps the prices low is also patently ridiculous, because we have competition in our system now and healthcare costs are skyrocketing.

Additionally, socialized medicine is working in all the countries. Comparatively, countries with socialized medicine live longer, are healthier and have a lower infant mortality rate than the United States. I dont know about you, but I would say that might mean their system is working, or at the very least helping. Other government policies, such as welfare, probably also help out the health of a country.

As for overall healthcare satisfaction, think again. According to the WHO's report from 2001 which surveyed 191 member countries on the quality of healthcare, the US came in last for satisfaction among first world nations. France ranked #1. Heres a link to the stats analysis: http://www.who.int/whr/2000/en/whr00_annex_en.pdf

In another WHO study, done shortly after the one above, the US ranked 17th for satisfaction after taking into account actual users of healthcare, instead of just those who work in the profession. Im too lazy to go and look that one up, however, those that ranked first and second were Scandinavian countries which have national healthcare.

That WHO study, as you would expect from a pro-socialist organization, sets paramaters in favor of countries that practice socialized medicine.

There are many factors why one nation's life expectancy and other healthcare stats differ. It takes a very complicated econometric study to attempt to find how health care services effects the statistics. I have seen no such study.

Let us get to some basic economics. Let us explain why the Soviet Union lost the Cold War.

Let us first understand that when you have a good that is subsidized by government that good will be over utilized. Make it a free good and it will be highly over utilized. The only way to prevent overutilization is to ration. The reason our system is more expensive is because we have a government that is more focused on expanding health care to individuals than controlling costs. I will give the proponents of universal health one point, our mixed system is more costly than universal health care systems. That is because it does not ration services.

Now let us explain the reason health care costs are rising rapidly. The major reason is third parties pay an overwhelming share of health care costs. To reduce the rising prices we must reduce third party expenditures. Not increase them as the siddling sabobs of socialism would demand. The answer is catastrophic health insurance and individual medical accounts. A catastrophic medical emergency can be covered by insurance with little increase in demand for heart surgury, chemotherapy, prostate surgery and the like. Few people are going to demand such treatment unless they need it. Particularly when there is a high deductable. Personal medical accounts simplifys the billing. The customer pays directly from his medical account, it also gives the customer an incentive to consider costs when making his health care decisions.

Milton Friedman the entire article can be found here.:



High health care costs is a problem created by government; the solution ain't more government.

You can't see how or you won't see how economies of scale can potentially lower health care costs? I've provided examples where this is done. So it can be done effectively. The Soviets are an example of how it can be done ineffectively.

PS - I'd love to see where government pays over 60% of health care costs because they haven't been paying mine and I'd like in on that.

Once again, please show me how healthcare is a natural monopoly. I have already combatted the economics of scale argument. Economies of scale seldom justifies government monopoly. I am betting government indirectly pays some of your healthcare costs. Do you have insurance? Is it provided by your employer? Have you ever written off medical bills?

People really need to understand the limits of economies of scale here. They need to also understand the effects of third party costs strongly overrides any economy of scale benefit. Once again, a simplistic economies of scale argument (that no freshman Econ student would be fool enough to use) justifies government as the sole producer of all goods and services.