Summary: Elizabeth Warren and other Democrats propose another expansion of the US health care system. A noble goal, but they will do it in a feckless and unsustainable way. There is a better way, a more difficult path, if we have the wit and will to take it.
As the Democrats have moved to the Left, socialized health care (aka Medicare-for-all) has become part of their core platform. Paul Krugman gives us the brief.
“On Sunday, Elizabeth Warren said that she would soon release a plan explaining how she intends to pay for ‘Medicare for all.’ …which in the current debate has come to mean a pure single-payer health insurance system, in which the government provides all coverage, with no role for private insurers.”
Even Krugman sees the two big flaws, although he waves them away. First, a large part of America will hate it.
“Not many people love their insurance companies, but that doesn’t mean that they’re eager to trade the coverage they know for a new system they don’t. Most people probably would end up better off under single-payer, but convincing them of that would be a hard sell; polls show much less support for Medicare for all than for a “public option” plan in which people could retain private insurance if they chose to.”
As a good Leftist, Krugman is confident that “most people would end up better off” because …he has ideology! Many people living in the real world fear that it will become like defense spending: a sluice of taxpayer money into the pockets of powerful special interests – in exchange for which we get lousy weapons (from boots to the F-35 and the Ford aircraft carrier). Other than a few nations (e.g., Canada, Britain), other developed nations give their citizens health care choices: they provide inexpensive quality universal care as an alternative (or backup) to private insurance plans.
But our Leftists often despise giving choices to the proles.
Second, there is the question of cost. As a bien pensant Leftist, Krugman waves this away: “She has, with considerable justice, insisted that this is a bad way to frame the discussion.” But even he sees the unpleasant reality.
“An independent estimate from the Urban Institute (which is, for what it’s worth, left-leaning) suggests that a highly comprehensive Medicare-for-all plan, similar to what Sanders is proposing, would substantially increase overall health spending, although a more modest plan wouldn’t.”
Even a “left-leaning” outfit says it will cost “substantially more.” Almost every government program in modern times has cost far more than its initial projections. Medicare had one of the better estimates: the cost in 1990 was 64% over the original estimate (details here). But the health care sector is almost one-fifth of the US economy. A 64% error in estimating the cost of WarrenCare will break us.
By the way, the current Medicare system is, as currently structured, unsustainable over the next decade or so. Its cost will skyrocket as the Boomers age.
But all of these are relatively minor problems compared to the big issue.
Health care as part of the grifter economy
I recently went for an MRI. The hospital was like a temple, shiny and lavish like no other public facility in the region – and like few private ones (e.g. the art museum sponsored by the local rich). The MRI clinic’s office had wood paneling and fresh flowers. Which I paid for, unwillingly: the MRI cost $1,850; I paid $1,136. The mechanics of getting the treatments for this illness were very complex. Getting it done in an administratively proper way was more so (the overhead of our system costs more than the lavish facilities).
In 2016, we paid 18% of GDP for health care vs. an average of 12% in 11 high-income developed nations (including the US). We get nothing for that extra spending. We have the lowest life expectancy: 79 years vs. an average of 88. We have the highest infant mortality: 5.8 deaths per 1000 live births in the US vs. an average of 3.6. We use health care services at the same rate as the others, except for diagnostic tests (we use more, but they don’t help much). See the sad details. See the big picture: a graph comparing life expectancy to health care expenditures by nation. America is in the dunce corner.
How we got here
In the grifter economy, key institutions become tapeworms. We feed them and they grow – but performance does not improve. That is the problem with defense (3.1% of GDP), education (6.1% of per capita GDP in 2015), and health care. Real health care expenditures per capita have more than doubled from 2000 to 2016 (see the graph), growing over those 16 years from 11% of per capita GDP to 14.5%. Moody’s projects that healthcare spending will reach an insane 20% of GDP by 2026.
Reforms pump more money into them, but much of that is burned by these dysfunctional institutions. ObamaCare passed because it fed more money into the machine, with no reforms in exchange. None of the proposals since Truman were so irresponsible; that’s why it passed.
Update: the problem with withdrawal
We can afford Medicare, so far, because it pays health care providers far less than private insurers. Medicare-for-all would either pay at current rates and bankrupt us, or pay all providers at Medicare rates and bankrupt much of the health care system. Bob Laszewski explains the problem. There is no easy solution.
A path to a better future
We have the wealth and power to provide excellent care to all Americans. We lack only the will and wit to made the necessary reforms. Now we have the lowest quality and least efficient health care system among our peers. Even Britain’s is better by many metrics (of course, conservatives natter on only about Britain’s, ignoring the more successful systems). We could learn much from their generations of experience running superior health care systems. But our arrogance and hubris prevent this.
Our current system is an expensive mess. Reform is an essential part of coverage expansion. But its massive funding gives it fantastic institutional and political power. Reform will not be easy.
More broadly, the health care system shows how the forces of disorder are winning in America. Our institutions are falling like dominoes. America is descending into Clownword. This is not a propitious time for deep reform. But, as the ancient adage says, needs must when the Devil drives.
For More Information
Ideas! For some shopping ideas, see my recommended books and films at Amazon.
- Hidden truths about American health care.
- The core truth about our health care system — It’s quite mad.
- What does the health care debate reveal about us, and our future?
- Why do so many new-born babies die unnecessarily in America, the City on a Hill?
- Single-payer healthcare is coming to America. It’s inevitable.
- Urine tests show America’s wealth being pissed away.
- Campaign 2020 ignores the big threats to America.
- A candidate can win in 2020 with popular proposals.
A book explaining this vital issue
By John Geyman, MD (2017).
Geyman is a professor emeritus of family medicine at the U of Washington School of Medicine). See his website, with bio and articles about health care. From the publisher…
“The debate over U.S. health care – where to go next to rein in costs and improve access to quality health care – has become bitterly partisan, with distorted rhetoric largely uninformed by history, evidence, or health policy science. Based on present trends, our expensive dysfunctional system threatens patients, families, the government, and taxpayers with future bankruptcy.
“This book takes a 60-year view of our health care system, from 1956 to 2016, from the perspective of a family physician who has lived through these years as a practitioner in two rural communities, a professor and administrator of family medicine in medical schools, a journal editor for 30 years, and a researcher and writer on health care for more than four decades. There has been a complete transformation of health care and medical practice over that time from physicians in solo or small group practice and community hospitals to an enormous, largely corporatized industry that has left behind many of the traditions of personalized health care.
“This is an objective, non-partisan look at the major trends changing U. S. health care over these years, ranging from increasing technology and uncontrollable costs to depersonalization and changing ethics in medicine and health care. This book points out some of the highs – and lows – of these changes over the years, which may surprise some readers. It also compares the three basic alternatives for health care reform currently being debated.”