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December 31, 2006

Reds Everywhere

Ankush points me towards an article in the Business section of The New York Times arguing for single-payer health care.  That's not exactly a common pairing, so seeing such an unexpected marriage of section and socialism does my heart good.  The piece is a perfectly adequate recapitulation of the arguments you already know, though it calls a lot of systems "single-payer" when they aren't.  But then, the importance of such an article isn't its innovativeness, but its audience.  The data comparing our spending and outcomes to those of other developed nations is an irrefutable, irresistible, condemnation of our system.  Indeed, this graphic alone is a more than suitable argument for reform:


The more who know the statistics, the easier the next fight will be.  And so I'm glad to see them being explained to audiences generally insulated against such revelations.  In the end, the case for moving towards public provision of health care is a simple one: It makes damn good business sense.  As the above graph shows, you may pay more through the government, but you pay far less overall.  And any businessman knows that that's the important metric.

December 31, 2006 in Health Care, Insurance | Permalink


A good article, but why does she write about single payer system and mention counries that don't actually have it and the forget to mention a country that does-- the United States. Medicare has been in around for 40 years. Going to a single payer system isn't some radical leap into the unknown, we don't even need a new government agency. Just drop the Medicare elibility age (either in stages or all at once) from 65 down to birth. Once everyone is covered, we can start fiddling with how the benefits package should be structured.

As for financing it, the Democrats should tie repealing the Bush tax cuts to providing universal health coverage. That's a better idea than using the tax revenue to reduce the deficit. As Krugman pointed out the other day, promising to reduce the deficit is a sucker's game, even if you suceeed, it just enables future GOP tax cutting.

Posted by: beowulf | Dec 31, 2006 4:32:02 PM

Wow, ya know, as someone who actually flirts coyly with socialism, it is usually defined as state-owned and/or worker-managed means of production. Services like health care, pensions, and unemployment insurance can be called welfare capitalism.

This was fairly important around the turn of century, because there was an argument about whether welfare capitalism prolonged the struggle unnecessarily. The general consensus grew that welfare capitalism was a necessary evil, that was acceptable as long as it was viewed as a means rather than an end, and as long as the rhetoric remained socialist rather than liberal, and as long as more socialistic goals, like at least gov't ownership of utilities and as many industries as possible, were not de-emphasized.

But I suppose you know all this, and are just playing.

Posted by: bob mcmanus | Dec 31, 2006 5:08:02 PM

As the above graph shows, you may pay more through the government, but you pay far less overall.

While true, there's another point missing here. Based on their numbers, the U.S. government spends more per capita for health care than any of the other countries listed. In other words, the current government budget for Medicare would be enough to provide health care for all Americans if you could contain costs as well as Canada, France, etc.

Posted by: Kevin Brennan | Dec 31, 2006 6:07:47 PM

Kevin, that's Medicare and Medicaid together, not just Medicare.

Posted by: Alon Levy | Dec 31, 2006 6:43:50 PM

And any businessman knows that that's the important metric. [you pay far less overall]

Ideology (government bad, corporations good), and government tit-sucking (business will provide these outsourced health-care functions cheaper) clearly trump cost-effectiveness.

That's why we have about 100,000 contractor personnel in Iraq to 'support' 140,000 troops.

I'm all for the health care data being force-fed to the public, but the Congress is fed from K-Street with green, campaign-spendable dollars, so it is quite clear that logic and cost-effectiveness are not enough. I'm not even sure that riots in the streets would make any difference on reversing course on health care 'insurance'.

It may be (I fully admit to not knowing how to move this issue), that only if we get publicly-funded electoral campaigns and break the K-Street cartel [read Soprano's-like mob] will we be able to get the single-payer universal health care that we as a entire nation deserve and need.

Posted by: JimPortlandOR | Dec 31, 2006 8:16:26 PM

damn, sorry about the unclosed tag - again.

Posted by: JimPortlandOR | Dec 31, 2006 8:18:39 PM

Bob: Yep, I'm playing fast and loose with definitions.

Posted by: Ezra | Dec 31, 2006 8:34:59 PM

I noticed that you proposed single payer without tort reform. Can the United States really have a similar health care system as Canada without tort reform along with regulatory reform?

Also, how do you propose to keep the rich from opting out of government healthcare like they have opted out of the education system? If the top ten or twenty percent of Americans opt into private, boutique medicine and leave the middle class sitting in the same waiting room as welfare mothers and the homeless, the system will not last long and will create tremendous resentment. Will Americans pay more for homes near the good hospitals and doctors just like they pay more to be near the good schools?

And last, could you at least find countries that have single payer that are as diverse as the United States. I do not believe that the four countries listed as being less expensive as the United States have a 12% african-american population or a 12% hispanic population.

Posted by: superdestroyer | Jan 1, 2007 9:26:33 AM

I would imagine that if all classes of americans had access to equivalent quality healthcare, any discrepancies in overall health would be reduced over time. I don't see how rich people opting into boutique healthcare changes outcomes for the general public. A rich CEO still wants his workers to not die, weather healthcare is single-payer or the current system. I could be wrong, it's happened before (just ask my first wife).

Posted by: Killer | Jan 1, 2007 11:47:31 AM

Well, unless African-Americans have been emigrating en masse, I doubt that millions of them are living in Britain or Australia. (Forgive the snark, but when you mean 'black people' in a non-USian context, say 'black people'.)

And the answer is: yes.

My take on this, though, is that it's about time to challenge the individualist bullshit around health care.

'My opponent says that the most important principle in health care policy is the right to pick a doctor and be treated at a time of her own choosing. Call me a scary liberal, but I just want healthcare that gets me better.'

Posted by: pseudonymous in nc | Jan 1, 2007 12:01:18 PM

Superdestroyer, there already has been tort reform when it comes to malpractice in most states. It's hard to bring and/or win a malpractice suit in most states, and the awards are limited by law ($1 mil in my state, which might sound like a lot, but it'll pay for just a couple years of health care and nursing if you're seriously disabled by a medical mistake... and that happens all the time).

So there'd still have to be some method of compensating victims of medical malpractice, but we already have systems set up for that, like the pool for people injured by immunizations.

As for the rich "opting out", well, they can't in other countries-- it's just like paying your medicare tax, which you do with every paycheck. (Probably shouldn't be linked to EARNED income, of course.) But that doesn't mean they can't pay more for boutique care, just as they pay more for first-class seats on a plane. Just because they're rich doesn't mean that they ought to get better care for no premium, or that they shouldn't have to pay taxes like the rest of us.

Other nations are actually quite diverse. Have you been to Toronto or London lately? Hamburg? If we all, rich and poor, white or other, have access to satisfactory health care, everyone's health will improve. I suspect poverty, much more than ethnic background, causes most of the "ethnic" discrepancy in health in our country.

We can do it. We're America. We got to the moon. We can surely provide our own citizens decent health care. :) Let's not be defeatist about something other countries have managed-- are we really afraid we're not as adventurous or innovative as they are? Perish the thought.

Posted by: lister | Jan 1, 2007 12:38:08 PM

superdestroyer -

In a single-payer system, the single payer covers the costs of follow up care for any medical mistakes. Automatically, without the patient having to sue. If they have complications from a medical procedure, they just go to the doctor and get them treated. If people can get mistakes corrected, there isn't the same incentive to sue.

Thus the incentives for reducing mistakes are in the right place. You have one entity both making the safety rules and paying for the consequences of medical error.

It would also be better for the economy, which should help the stock market, which is what drives insurance premiums in the real world.

Posted by: NotThatMo | Jan 1, 2007 1:10:46 PM

Since the Canadian system always seems to get dragged into these discussions, let me offer my perspective.

I'm a Canadian who returned to Canada after 10 years in New York City. And I'm annoyed that the same tired talking points always get trotted out to suggest Canada has no healthcare lessons to offer the U.S.

Sure, there are problems here with waiting lists and even finding a family doctor. Alarming anecdotes become headline news in Canadian newspapers and are seized on by right-wing U.S. think tanks. They usually neglect to mention the key facts Ezra starts with: Canada's lower costs, lower infant mortality and higher life expectancy.

I'm a patient at a Toronto family and community medicine clinic that is associated with a university teaching hospital. Welfare recipients and CEOs sit next to each other in the waiting room, alongside prosperous homeowners and low-income public housing residents. So everyone has a stake in the system. It's called universality. And it's a good thing -- not a "Soviet style healthcare monopoly", as the forces of darkness would have you believe.

Back to that very diverse waiting room. We all get great care -- including referals to specialists who also work at the hospital. Each patient sees the same family doctor on every visit. The doctor can order tests or referals without having to
check with an insurance company.

Choice of doctors? I chose my family doctor by entering my address on a website. I was offered a choice of more than 30 doctors within walking distance. But that's downtown Toronto. Elsewhere, new patients have real problems. But you can always resort to "drop in clinics" -- something that doesn't really exist in the U.S.

And consider what happened after a recent annual physical. My family doctor actually talked me into a series of non-urgent tests "just to be on the safe side" given my history. The tests probably would have been billed at over $10,000 in the U.S. I paid nothing beyond my high Canadian taxes. I waited one day for a lung scan and 17 days for a stress tests. A colonoscopy took three months, but the specialist turned out to be a professor who has written many widely-cited medical journal articles. I could add many examples of friends and relatives receiving excellent care -- up to, and including, transplants.

Sure, the the Canadian system is highly imperfect. There are shortages and waiting lists. It helps to "know someone." Doctors are frustrated by paltry fee schedules and heavy workloads. The theoretically absolute prohibition on most forms of reimbursement for medically necessary care financed by the public system has begun to break down. We now have "gray market" private clinics.

But a least we have a system that produces very good to excellent results for most people. And it's about doctors and patients. In the U.S., you have a non-system based on a series of commercial transactions that wastes billions denying medical care to sick people.

I think the U.S. healthcare crisis is a lot like the Middle East crisis. We know what the answer is -- but not how to get there. A Canadian-style system in the U.S. seems like a dim prospect. The vested interests are just too powerful. So why
not settle for the next best thing? Forget about grandiose solutions. But greatly expand medicare, medicaid and VA coverage to tens of millions more. Allow the States to experiment with other programs to cover remaining gaps.

But you'll have to get over the reflexive prejudice against public sector solutions. Free market fundamentalism is not always the answer. For example, health savings accounts are a crackpot idea from the same folks who brought you social security privatisation.

So, my prescription: less private, more public. I know, I know. It's un-American. But it's the right thing to do...really the ONLY thing to do.


Posted by: Toronto | Jan 1, 2007 1:27:18 PM

And last, could you at least find countries that have single payer that are as diverse as the United States. I do not believe that the four countries listed as being less expensive as the United States have a 12% african-american population or a 12% hispanic population.

Eurabia is overflowing with breeding Arabs and non-Judeo-Christian foreigners. A multiculturalist paradise, so I'm told.

Posted by: Token Ring | Jan 1, 2007 2:08:35 PM

There are a lot of Canadians that have to come to the US for tests or surgery that they can't wait months or even years to get in Canada

Posted by: Don Singleton | Jan 1, 2007 2:28:21 PM

Let's not forget that medical malpractice lawsuits count for 2% or less of medical costs. http://www.makethemaccountable.com/myth/RisingCostOfMedicalMalpracticeInsurance.htm

Medicaid (Meidcare?) provides health insurance benefits with 97% going to provide benefits (i.e., 3% going to administration). Private insurance spends about 25%-30% on administration costs. Drug companies are now one of the biggest spenders on advertising. Meanwhile, a self-perpetuating cycle is in place: as fewer have insurance, the costs of health care get spread amongst fewer people, making the cost per person higher, making it so fewer can afford insurance. People without insurance forego inexpensive preventive treatment but still get expensive emergency treatment that is then paid for by the insured.

It doesn't take a CPA to see where the high cost of medical care in the US comes from; however, discussions in the mainstream news about where the costs do come from is taboo.

A simple solution that would most palatable to the free market cultists would be to switch to a German-like system. 1) Require all employers to provide health insurance through private insurance companies, 2) provide Mediwhatever to all unemployed, 3) cap drug and insurance and hospital company profits like we do with utility companies, 4) phase out drug, insurance and hospital corporations' advertising.

While not as good as other nations' health care systems (cost-benefit), it is certainly much better than what we have. This doesn't seem all that hard to implement, nor that hard to sell.

Posted by: cde | Jan 1, 2007 2:42:29 PM

Oops. Try this link dispelling myth of rising cost of malpractice.

Posted by: cde | Jan 1, 2007 2:45:25 PM

The Times article points out a paradox in the U.S. health care system -- relative to countries with universal health care, more money is spent, yet the nation's over all health remains poorer.

Why is this?

The article lays responsibility on "administrative waste" in the multi-payer system. "There's an enormous amount of paperwork [...] that simply doesn’t exist in countries like Canada or Britain."

I wonder how much of the disproportionate cost actually results from "administrative waste". Is it possible that health care costs more in the U.S. simply because doctors charge more for their services? U.S. doctors seem to command much larger incomes than Canadian ones. I don't have reliable statistics, but anecdotally I'm aware of several Canadian doctors who have been lured to the U.S. by the prospect of more lucrative practices. If a "single payer" health care system were imposed, U.S. doctors would surely suffer a pay cut.

I hate to malign the medical profession, but is it possible that some resistance to socialized medicine in the U.S. comes from doctors themselves? Are they perhaps unwilling to compromise their own (often) exorbitant salaries?

Does anyone have statistics on doctors' incomes in the U.S. versus Canada?

Posted by: Montreal, Quebec | Jan 1, 2007 3:37:04 PM

In a single-payer system, the single payer covers the costs of follow up care for any medical mistakes. Automatically, without the patient having to sue. If they have complications from a medical procedure, they just go to the doctor and get them treated. If people can get mistakes corrected, there isn't the same incentive to sue.

Flashback to freshman Logic 101 here.

"The majority of bad arguments contain a flawed implicit premise. A good first step is to identify these."

When I read something which says, quote, If they have complications from a medical procedure, they just go to the doctor and get them treated, my jaw drops with incredulity.

This isn't automotive repair or carpentry we're talking about, trades exerted in the realm of the replaceable and inanimate. It's medicine practiced on fragile and irreplacable living beings.

There is a large category of medical error which results, often rather speedily, in the death of the patient. How is that to be "corrected" or "treated"?

There is a further large category of medical error which leaves its victims permanently crippled, beyond the ability of even the most capable physician to rectify. How are those people's injuries going to be "corrected"?

I have had family members irreparably damaged at the hands of inept physicians. It's an ugly experience.

The current US system is a disaster. And our malpractice liability model is emotional and unscientific and incredibly expensive. But any proposal to reform it which contains such harebrained thinking as is on display here is nothing that any sensible person would want to get near.


Posted by: marquer | Jan 1, 2007 4:36:43 PM

Let me repsond to some points made by other posters. First:

"There are a lot of Canadians that have to come to the US for tests or surgery that they can't wait months or even years to get in Canada."

True. Sort of. But it tells only part of the story. Do these patients really HAVE to go to the States? Not always. The presumption is that more tests and more surgery equals better care. But that's not always the case. Canada has better basic care and better treatment of chronic conditions for simple reason that everyone is insured. An oft-cited short-coming in the Canadian system are patients who have to wait a year for hip replacement surgery. But Americans can spend a year fighting with their insurance companies for authorization. The secret to success in the Canadian system is cultivating a good relationship with your family doctor -- who will advocate on your behalf.

Now, the disparity between U.S. and Canadian doctors income levels.

Half truths abound here. Many Canadian specialists can triple or quadruple their gross incomes by mvoing to the U.S. So how do you explain this eye-popping fact:

*****In the most recent year for with stats are available, more Canadian doctors returned from the States than left for the States******

The doctors found the were worse off financially in the U.S.
That is, it's better to make $200,000 in Canada than $500,000 in the U.S. American doctors have huge overhead expenses, including malpractice insurance and office staff to deal with the insurance companies. And they may incur large expenses sending thier kids to private schools and universities. Canada has a a much better public school system than the U.S. And university is much cheaper: about $4,000 a year for in-province undergraduates at McGill or the University of Toronto. But all the U.S. right wing talks about is our high taxes. They omit discussion of our higher level of service -- or the fact that we live longer.

Posted by: Toronto | Jan 1, 2007 4:46:02 PM

Don Singleton,

There are a lot of Canadians that have to come to the US for tests or surgery that they can't wait months or even years to get in Canada

This is the same - largely anecdotal - red herring that repeatedly gets trotted out. It's total nonsense. Millions of Americans never have even the opportunity to get on a waiting list for tests or surgery, because they're poor and/or have no health insurance. Are there any statistics on how many Americans die prematurely because their poverty precludes them from having access to health care? And, unlike these well-to-do Canadians, uninsured Americans can't go to Canada to get treated.

Posted by: Mike Austin | Jan 1, 2007 5:00:41 PM

I would like to offer a few comments as follows:

1. While seniors may be generally satisfied with Medicare, I do not view it as a particularly successful program for taxpayers because, even though it is effectively a single payer system for the large population that it serves, it has not been very effective at controlling costs despite comparatively low reimbursement rates. The same can be said of Medicaid, with roughly half of its spending attributable to long term care. Could you imagine how many people would come forward to claim benefits if long term care were suddenly available on a non-means tested basis? Both programs have done a poor job at controlling healthcare utilization, and nobody has a good handle on the amount of fraud, which, in the case of the New York State Medicaid program, is considered to be huge.

2. With respect to the malpractice issue, the problem here is defensive medicine, not malpractice insurance premiums or court awards. The key problem from a doctor's perspective, in my opinion, is unpredictability. That is, the doc can't know who will be on a jury or how skillful the lawyer will be at manipulating the jury's emotions. If we had a system of specialized health courts to adjudicate these disputes, doctors would have more confidence that the dispute would be handled objectively. Judges with a body of knowledge and expertise in medical disputes, neutral scientific experts chosen and paid by the court, etc. would inspire confidence that any ultimate ruling is "fair." Result: less need for defensive medicine.

3. Regarding administrative costs, at least 50-60 million get their health insurance through large self-insured employer plans. According to the Lewin Group analysis of the Wyden plan, administrative costs amount to less than 4% of spending. It is the people who get their insurance in the individual market and go through medical underwriting that have high administrative costs (in the range of 30%) associated with their coverage. We are talking about 17 million people who get their insurance this way or less than 6% of the population.

4. On emergency room costs for treating the uninsured, I have seen data from the Kaiser Family Foundation and elsewhere that suggest that uncompensated care at hospitals raises prices by 6% vs what they would other be. It would obviously be better if everyone had coverage, but uncompensated care is not a key driver of high healthcare costs in the U.S.

5. Finally, the commenter who made the point that charges are probably higher in the U.S. to reflect higher incomes earned by doctors and other providers is probably correct. If we could see some data comparing how much Medicare pays for, say, a CABG (heart bypass) or DES (stent) vs what doctors and hospitals would be paid for the same procedure in Canada, UK, France, Germany, etc., it would be a useful contribution to the analysis of cost differences between U.S. healthcare and elsewhere. Information about how many of a given procedure are performed per 100,000 of population would also be helpful.

6. Don't even get me started on all the factors (besides the quality and availability of healthcare) that influence life expectancy and the substantial differences from one country to another in the definition of a live birth for purposes of calculating infant mortality stats.

Posted by: BC | Jan 1, 2007 5:12:45 PM

Some readers may be interested in this quick guide to Canada's health-care system:

or this more detailed one:

Posted by: mijnheer | Jan 1, 2007 5:36:44 PM

Ditto BC's number 6.

Infant mortality rates aren't calculated the same in each country, but we treat them the same for comparison's sake, for some (dumb) reason. For example, in say Sweden, if a baby is born and is less than 30cm long, it isn't considered a "live birth" and thus doesn't factor into the infant mortality rate. In the US, we use a different metric, and those babies would have been counted as "live", thus skewing Sweden's rate lower (or ours higher). Lesson: don't necessarily treat international statistics as meaningful. I wish the media would be honest about this, but I don't think they know this (it would require 'homework', which is something they are incapable of performing).

Posted by: Vince | Jan 1, 2007 5:55:19 PM

Re: comment #1 above, with its references to "controlling healthcare utilization" and the horrrifying prospect of people claiming long-term care with no means-testing....

Please forgive my exasperation. And please consider the possibility that health care is not just another commodity, but rather a public good. (Some Eurpean countries even consider health care a human right; access is consitutionally guaranteed.)

Too often, the U.S. debate is narrowly focused on spending less within the existing mess of a system. If you got better results, why not spend more? And why not expand public programs?

Posted by: Toronto | Jan 1, 2007 6:20:35 PM

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