In the meantime, freeing healthcare from the clutches of predatory insurance companies is what all Democrats should be thinking about.
The cost problem in American health care isn’t about insurance companies. It’s about the wages that doctors and nurses get.
Taxes would rise as healthcare costs are shifted over to the government. This is a trade-off other industrialized countries are willing to make – they also pay their doctors less – but one Americans aren’t used to.
That’s the problem that needs to be solved and it really isn’t obvious that having the Feds paying for everything is going to solve it.
Isn’t one of the major contributory factors of the high cost of medicine in the USA the truly insane amount of negligence/malpractice insurance that doctors need to have? Caused, of course, by the national passtime of “suing the doctor, aided and abetted by real “ambulance chasers””…?
Isn’t the bigger problem the fact that insured Americans are over-treated? The system (as I understand it) has little incentive to control costs: one hospital visit will usually exceed the insurance deductible, so hospitals are free to do all the tests they like, provide as much billable care as they want, knowing that the insurance company is paying. It’s the principal/agent problem writ large.
The easy way to stem it is to mandate that insurance can only cover 90% of the cost. Even faced with just 10% to pay, the patient might think twice about running that extensive battery of tests. Not sure if it’s politically feasible; and of course legislating for private contracts is morally dubious.
“The easy way to stem it is to mandate that insurance can only cover 90% of the cost.”
A lot of the lower cost policies had a ‘co-pay’ like this, not sure if they survived Obamacare.
@Andrew M… Isn’t a lot of the over-testing merely a CYA exercise intended to provide a defence against the almost-inevitable law-suit alleging “negligence” if treatment is not exactly 100% successful?
I agree, Pogo, added to which they need to carry out all sorts of unnecessary procedures to cover themselves against being sued for negligence and so forth.
The adversarial relationship between insurers and hospitals in the US does create substantial costs.
After having some (thankfully fairly minor) treatment at a hospital in Nevada, I was presented with the bill. When I said that I would pay on the spot, rather than sending the bill on to be negotiated with an insurer, the hospital knocked 30% off at once.
Karl Denninger blogs repeatedly on this – he reckons you could collapse the cost of medical care in the US overnight by enforcing existing consumer, competition and anti-racketeering laws on the medical sector, which has managed to either negotiate legal exemptions from them, or have its anti-competitive nature ignored by government.
On the subject of over-treatment, many years ago I was hospitalised for 5 days for sinusitis whilst holidaying in Miami.
On coming back to the UK, the local GP was more than a little surpised by me being hospitalised and said he would have just treated it with antibiotics.
‘Isn’t one of the major contributory factors of the high cost of medicine in the USA the truly insane amount of negligence/malpractice insurance that doctors need to have?’
Yes, Pogo. The problem to me is the trial lawyers pet ‘punitive’ damages. Sums granted by sympathetic juries for many multiples of actual damages. An infamous example was a woman awarded $3,000,000 from McDonalds because her coffee was too hot, and she burned her leg when she spilled it on herself.
I say punitive damages should be banned, but there is no way legislatures full of lawyers will ever do it.
Pogo,
It’s both CYA and insurance-milking. If co-pays were higher (e.g. the 90% rule), patients would be incentivised to stop the doctor and ask what the % chance is that they actually have the thing that the test might find. The patient might then decide that no, they don’t really care for that test; the doctor makes them sign a form saying they agree not to have it, and the A is C’d.
‘they also pay their doctors less’
The communist plan. Pay doctors less, doctors go away, medical costs go down, and care disappears.
I support high deductibles, such that insurance only covers big losses. Which, of course, is what insurance actually is. Third-party payer is not insurance.
Timmy,
It is salaries plus hundreds of other, less obvious forms of rent seeking. Fixing American health care costs isn’t as simple as telling the AMA to fuck off and training twice as many doctors.
Gamecock,
What does communism have to do with this conversation?
What I want to see is the removal of AMA restrictions on med school applicants. Those restriction do have government enforcement but, at heart, we are dealing with a trade guild.
Government directed pay scales.
It’s a good thing no one but you is even bringing government directed pay scales into the conversation then. While we have to recognize that the option exists, we should only do so to eliminate this option.
Did you read the original post???
Yes, and I don’t see wage caps mentioned anywhere. I can’t imagine why you’d think that would be the method Timmy would want to use to reduce salaries. Since we know we have a supply problem, it is best to remove some restrictions on doctor supply before we consider anything stupid.