Universal and government healthcare, part 3: advantages and alternatives.

From https://www.verywellhealth.com/is-universal-healthcare-the-same-as-socialized-medicine-3969754: Politicians and pundits may toss out terms like universal health care and socialized medicine as if they were synonyms, but the terms represent fundamentally different political and economic approaches to providing for health services. Although doctors in the United States may refuse to treat people who can’t pay for their services, under the Emergency Medical Treatment and Labor Act (EMTALA), hospital emergency rooms cannot even ask about a person’s ability to pay until after the person has been medically stabilized by a physician. However, most experts do not believe that EMTALA in itself signifies “universal health care.” In a strict sense, universal health care is all about access to emergency and preventive health services. Under this definition, the United States enjoys universal health care. However, the term is often constrained to reference access to health insurance—in which case, the United States does not enjoy universal health care.

Socialized medicine in its strictest sense, is a single-payer government-run and delivered system. In a socialized medicine model, the government provides all services from your doctors and providers to the hospitals and other facilities, and all payments for those services. Some looser translations of socialized medicine–hybrids–allow for private providers and facilities, but that practice is not usual; typically, private payment and independent for-profit providers are either discouraged or forbidden. The National Health Service (NHS) in the United Kingdom is an example of a system in which the government pays for services and also owns the hospitals and employs the doctors. Funding for the UK’s National Health Service (NHS) comes from tax revenue. Residents can purchase private health insurance if they want to. It can be used for elective procedures in private hospitals or to gain faster access to care without the waiting period that might otherwise be imposed for non-emergency situations. This is hybrid rather than pure single payer.

In most cases, universal coverage and a single-payer system go hand-in-hand, because a country’s federal government is the most likely candidate to administer and pay for a health care system covering millions of people. However, it is very possible to have universal coverage without having a single-payer system, and numerous countries around the world have done so. Denmark, France, Australia, Ireland, Hong Kong, Singapore, and Israel each have two-tier systems. While Medicare operates similarly in the United States, the supplement Medicap coverage if offered and managed by a private health insurer rather than the government. In Canada, which also has a single-payer system with universal coverage, the hospitals are privately operated and doctors are not employed by the government. they simply bill the government for the services they provide.

Today, 18 countries offer true universal health coverage: Australia, Canada, Finland, France, Germany, Hungary, Iceland, Ireland, Israel, the Netherlands, New Zealand, Norway, Portugal, the Slovak Republic, Slovenia, Sweden, Switzerland, and the United Kingdom. In addition, several other countries have achieved near-universal coverage with more than 98 percent of their population insured, including Austria, Belgium, Japan, and Spain. In contrast, only a little over 91 percent of the U.S. population was insured in 2016, and Gallup tracking indicated that the percentage of Americans with health coverage had dropped to under 88 percent by late-2017. 

Germany has universal coverage but does not operate a single-payer system. Instead, everyone living in Germany is required to maintain health coverage. Most employees in Germany are automatically enrolled in one of more than 100 non-profit “sickness funds,” paid for by a combination of employee and employer contributions. Alternatively, there are private health insurance plans available, but only about 11 percent of German residents choose private health insurance.  

Singapore has universal coverage, and large health care expenses are covered (after a deductible) by a government-run insurance system called MediShield. But Singapore also requires everyone to contribute between 7 and 9.5 percent of their income to a MediSave account. When patients need routine medical care, they can take money out of their MediSave accounts to pay for it, but the money can only be used for certain expenses, such as medications on a government-approved list.

ADVANTAGES OF SINGLE PAYER BASIC HEALTH INSURANCE



Universal health care simply means that every citizen has a realistic ability to access basic health care services. Furthermore, in most cases, the providers and facilities are privately owned services. Contrast universal care with a single-payer system. In a single-payer system, everyone gets coverage that fully pays for all services and the government provides for this access. The disadvantages are obvious: 1. Can you trust government bureaucrats to make viable long term decisions rather than politically expedient fixes? 2. Unless individuals are allowed to pay extra for services they want, and professionals are allowed to market their services outside of the single payer, both patients and professionals are hostages. 3. But if there are no restrictions on #2, and enough people are willing to pay extra, the best professionals will leave the system, and those who remain are likely to be less competent. 4. What happens whenever and wherever there are price and wage controls, both of which are necessary for single payer to survive? Shortages of goods and services, longer waiting lists, thriving “black markets”, general decrease in quality of what’s controlled happens. The NHS gets around this with a hybrid system.

What, if any, are the advantages of single payer over a hybrid system: 1. Theoretically, when everyone is covered, the population will be healthier IF people who are sick seek help early AND preventative care is sought by almost everyone. In reality, neither outcome is guaranteed no matter who is covered, because there’s still the issues of waiting times, inconveniences and resistance to treatment. 2. If #1 happens enough to overcome the caveats, medical costs should go down due to earlier intervention. 3. People will have more job mobility and entrepreneurship might flourish when no one is constrained in their job by fear of losing health insurance, and no one will go medically bankrupt (something like 60% of bankruptcies are due to medical bills). 4. Presumably, paperwork and administrative overhead will go down when providers have only one entity to bill rather than a variety of insurance companies, and a government entity has lower administrative costs than a private insurance company. The major caveat here is that whenever proponents of single payer (hi Bernie Sanders) cite the cost differential, they use the ratio of administrative costs/overall treatment costs. This is misleading, especially when using Medicare as an example, because Medicare patients are older and sicker than private insurance patients, so that drives the denominator way up and the ratio down. A more accurate measure of cost is the ratio of administrative costs per beneficiary. Private insurance companies pay about $453 vs. Medicare $509 per beneficiary, according to the Heritage Foundation. (The fact is that, in recent years, Medicare administrative costs per beneficiary have substantially exceeded those costs for the private sector, this despite the fact that, as critics note, private insurance is subject to many expenses not incurred by Medicare. Contrary to the claims of public plan advocates, moving millions of Americans from private insurance to a Medicare-like program will result in program administrative costs that are higher per person and higher, not lower, for the nation as a whole.)

THE BOTTOM LINE Single payer has only one unequivocal benefit over hybrid or multi-payer systems, #3 above, while the disadvantages are real. Countries which have either hybrid or multiparty systems depend on citizens either obeying requirements or being forced to enroll in insurance or be heavily penalized. That’s fine for Germany, Japan or Singapore, with obedient populations. The United States’ frontier mentality means that a certain proportion of the population will remain uncovered by health insurance no matter what (see paragraph 4 which indicates that proportion covered actually went down from 2016-2017 even under the requirements of the ACA. “Universal” coverage here could only happen under a single payer system, which has more disadvantages in our political system than the advantages of a fully covered population would confer. There are myriad ways to make our present system better, more efficient, more effective, but I don’t have the space to lay them out here. Read these five great ideas.  

https://nypost.com/2012/06/10/5-ways-to-solve-health-care/

The problem of subsidized healthcare, part two.

In part one, I introduced the term “subsidizer”, the people who overpay in order to help provide free services to those who don’t pay. You mean can’t pay, right? No, I mean don’t pay. If someone can afford cable tv or a car payment beyond their means, or cigarettes or drugs, but not health insurance, that’s not a “can’t” issue, it’s a spending priority issue. While I am not saying that everyone could afford health insurance, there are many people who can afford it but choose to spend money on other things. An example is the Earned Income Tax Credit, or EITC. People who earn money from work but meet income limits can not only get a refund of all taxes they paid, but get an EITC worth many times their tax refunds, as an additional tax giveaway. It’s not really a refund, since they didn’t pay the tax to begin with, nor is it a tax credit, despite the name, because a credit assumes a tax liability. Let’s take an example: a couple filing jointly with three children can make up to $53,390 annually and qualify for the EITC. The amount they get, in this example, is up to $6,318. That’s $526/month that they haven’t earned and get in a single lump sum. In most states, that would pay for decent health insurance for the whole family. I worked at H and R Block for three years doing tax returns and saw a lot of these gimmes go to people who paid no tax. I didn’t have to ask what they intended to do with the money, they were only too glad to share with me. Everyone was going to buy health insurance, right? Yeah, if it came in 60″ diagonal HD with chromecast built in, or started with i followed by either pad or phone. No one said “health insurance”. In Washington, they didn’t need to.

A Tale of Two States

My middle daughter, who lived and worked in Idaho for three years while going to college, now lives and works in Washington. When the Affordable Care Act–ACA or “Obamacare”–passed, states had the option to run their own health insurance exchanges or expand Medicaid. Idaho did the exchange, Washington expanded Medicaid. In Idaho, my daughter was making around $19,000/year, and was able to buy a good Blue Cross plan for about $190/month, and ended paying $91/month after a tax subsidy of $99/month. Not bad, but when she moved back to Washington, she qualified for Apple Health, the name for our state Medicaid plan. She paid no premium at all, paid nothing for meds, or any medical services and even got free dental. It’s a REALLY good deal….too good. Someone has to pay. Kinda like the families who scored the EITC. If they qualified for Apple Health, they get everything paid for, if they don’t, that’s another story!

My daughter will make too much money to qualify for Apple Health this coming year. To buy health insurance in Washington, the cheapest plan for an individual is $290/month, and it pays nothing until the deductible of $7,900 is satisfied. That’s $100/month more than a plan in Idaho that covers almost everything! Need a visit to urgent care? In Idaho, that’s $25 after insurance. In Washington, it’s whatever the clinic fully charges–typically about $150–until you’ve paid out $7,900! Hospital overnight stay? Idaho, under the Blue Cross plan, $150. Washington, $7,900. Can you guess the main reason why she will pay so much more here than in Idaho? She is now a subsidizer. I was self employed most of my life, and was a subsidizer for 40 years!!

Do I have the right to resent EITC recipients? Medicaid recipients? How about those who get both AND a big screen 4K tv? I really hated doing tax returns AFTER my full time occupation hours, especially when I had to smile at a $6,000 EITC. So why did I do it? I had to pay enough for my health insurance so others could get theirs for free, that’s one reason. What do excessive premiums or out of pocket costs have to do with financing the rich benefits of Apple Health? A.H. coverage is provided by a limited number of managed care/insurance companies, who bill and are paid by the state and federal governments. Because the payment rates are so low, professional providers have to charge higher rates to “private pay” and privately insured patients. Insurance premiums and coverage gaps reflect this. Even with soaking the subsidizers, the government still has to soak the taxpayers to offer such largesse to those who pay nothing.

My daughters benefited from the ACA, for a few years. Now they are in their 20’s and have no employer paid insurance. They might be subsidizers for many years. This is not justice. If you demand universal coverage and are already covered by your employer, shut up. If you have no health insurance under ACA at this point, that’s practically prima facie evidence that you are making enough to afford it, because otherwise, you would be under Medicaid or getting government-subsidies for buying insurance. But if you are a subsidizer–paying exorbitant rates–you are the heroes, and have earned the right to complain. 

To summarize and simplify, justice in the healthcare financing realm has to do with: 1-who pays, 2-who benefits, 3-quality of care delivered and 4-sustainability. The next post in this series will consider different alternatives for answering the first two questions.