Mandate Alternatives

Posted in society by Adam

10 December 201624 February 2017

The Republicans probably can’t replace Obamacare without some form of mandate.

Donald Trump will personally ask everybody to buy insurance, really really nicely. And if they push back, he will offer them $7 million in tax incentives.

Or maybe everybody who has coverage will be entered into an annual lottery where someone will win $big$bucks$.

Or we can bring back the draft and weight selection against those who do not have coverage.

Not talking electoral mandates—those are apparently a dead concept, circa 1980s. Talking about the health insurance mandate.

So, first we should understand that the Obamacare mandate is meant to serve two purposes:

Avoid having too few young and healthy people so that the pool can pay for the care of the sick members.
Avoid having too many people without insurance that end up needing care.

Insurance isn’t just for old people. It’s also for the random event. Young people lacking insurance raises the cost of the whole healthcare system one of them gets a sudden illness they can’t pay for.

The problem with the Republican alternatives so far is that they tend to only address the first purpose: making sure that the pool is mostly healthy. They tend to do this by creating high-risk pools. These pools are government-subsidized so that the regular market is free of the sickest folks.

The Republicans are calling for a form of socialized medicine whereby the worst costs are still borne by taxpayers, while the artificially-healthy market is free to line the pockets of insurers.

Now, such a scheme could work. It’s just that the Republicans will not be willing to take it to its logical conclusion: creating one risk pool (either nationally or per state) for all catastrophic coverage, and relegating health insurance to something more like an add-on that helps pay for the first 10-20% of coverage only. This is more like the risk equalization pools used in parts of Europe, and those still require young people to carry insurance.

Indeed, one expects that if the high-risk-pool system is put back in place, there will be a strong incentive for future governments to expand it into a full-on single-payer system. Historically high-risk pools have been underfunded, leading to higher premiums and deductibles. Their existence was one of the motivations for health insurance reform (i.e., Obamacare) in the first place.

Now that we’ve had a first round of insurance reform, one expects that the government will be compelled to repeatedly reform it until they get to a system that works. People will not be content to let this go, as tens of millions lose insurance, the systemic uncertainty grows, and all the while the corporations produce record profits. There will be pressure to keep fixing this system.

The Republicans don’t really try to tackle the enrollment problem, the fact that a lot of young people will tend not to buy insurance. They seem to believe, for some unclear reason, that if you make insurance cheaper it will entice young people to act responsibly (despite the fact that it’s already relatively cheap for them). It just doesn’t work that way. Coverage is not on their radar. Unless and until health insurance becomes a fashion statement, don’t expect the youth to seek it out.

Thus, it seems implausible that there exists an alternative to a health insurance mandate (taken-as-read that single-payer is a mandate too).

A Spooky Obamacare Post

Posted in society by Adam

29 October 201624 February 2017

Some thoughts on the state of health care in the USA.

It’s that time of year again. The blood, the guts, the candle-lit theramin music… the open enrollment period for Obamacare is nearly here.

Premiums are up, again, somewhat steeper. Insurers have cut back or dropped from some markets. The Republicans are painting this as the dire predictions come true. But you can contrast their alternative at abetterway.speaker.gov which should probably be called “a bettor’s way”—they are betting that you’ll take them at their word that they’ve cracked the code for making healthcare work for the country rather than the country working to afford healthcare.

Getting into the bog means facing down the swamp monsters of things like age-rating. Plainly, should older people be able to be charged 3× or 5× what younger are? In practical terms that’s likely a difference of at least $500/month or $6000/year…. Obamacare says 3×, while the GOP says five by default and let the states do whatever they want (Do I hear 50×? 100×?). Their argument is that limiting the gap raises premiums for young people.

But the whole argument is fucking stupid, on both sides. You simply cannot charge older people an arm and a leg to fix their arm and their leg. And charging young people a ton is equally batty. (Caveat: in both cases, means testing should be employed such that poor people pay little and wealthy people pay more.) In other words, the main issue is cost of healthcare, and neither the GOP’s plan nor Obamacare do enough to directly address the cost issue.

The GOP’s plan makes other major strategic errors, such as a one-time open enrollment, which damns the laggards to a future without what they term “continuous coverage protections” (the idea that a new, major health problem can’t skyrocket your premiums) and automatically higher premiums when they do sign up. They’re basically lining up a whole class of people to be taken for a ride by insurers here.

What do people want? Healthcare at an affordable price. What does Obamacare deliver? Healthcare that’s affordable to the rich and the subsidized, semi-affordable to the young, to those in some luckier states, and to those who have employer-based coverage. What does the GOP plan deliver? Basically the same, with some musical chairs on who’s getting fucked over. But basically the same.

Neither party is doing anything about the real monster in this film: cost. The lobbies (minions of the monster) for hospitals, doctors, drugs, et al. are too mighty for these extras to tackle. We’re awaiting the hero of the film to slay them, and then take the monster on for the grand finale. And we’ll still be waiting in 50 years, because our planet is fresh out of heroes.

How do you tackle costs?

End fee for service. Current medical billing in the USA is based around the idea that every action taken in a hospital is profit for the hospital. Every pill, every bedpan, all of it is billable. And therefore, it all must be tracked for billing purposes (it ought be tracked for scientific reasons, but that’s a different story).
Stop subsidizing the global pharmaceutical industry. The USA pays premium prices for drugs while the rest of the world pays far less. Effectively, the USA is subsidizing the rest of the world (or just giving massive profit to pharma for nothing). End that. We should pay our fair share, but not more (unless it’s formally negotiated in our treaties for other tangible benefits).
Require providers and insurance companies to publish the cost to the consumer if they lived in other countries. Let people know how badly they’re getting screwed every time they go to the doctor or pay their premiums. (This might be doable in another way: by having foreigners create a searchable database of conditions/treatments that US consumers could look up and see the prices. But having it on the bill would work better.)
End employer-based coverage (including in union contracts). Portability laws are a bandaid over a system that obfuscates value in employment, causes undue labor loyalty, invites corruption, and so on. Workers deserve to be paid in real money, and never in trade for economic decisions they ought to make for themselves (i.e., the decision itself has an economic value that is not represented in the value of the health care).
Invest in automation and allowing non-MDs to provide more care. Both of these will probably do a lot in the future, but it will take time for them to kick in.

Scenarios for the Adoption of Single-Payer in the US

Posted in society by Adam

30 January 2016

Some have dismissed the idea of Medicare-for-all or a single-payer healthcare system in the United States as implausible (or even impossible). They see it as a bridge too far (or as one Brookings Institute reprint put it (Brookings: 26 January 2016: “The impossible (pipe) dream—single-payer health reform”), “‘You can’t get there from here.'”). I’m going to look, briefly, at six scenario-types that could (eventually) deliver single payer to our shores.

Disaster
Via Pharmaceutical regulation
Via state experimentation
Via cultural maturity
Incrementally
Technological

Disaster

Manmade or natural, it doesn’t matter. World War II played a role in socialized medicine coming up in Europe. A major pandemic or other breakdown of the US healthcare system could largely do the same here. We continue to have tens of millions of uninsured persons, and during a big enough health crisis that would probably require a legislative remedy.

Pharmaceutical regulation

Drug prices are too high, and between insurance companies and the lack of price negotiation by Medicare, they aren’t going down anytime soon. If a combination of legislative inaction and increasing demand (in the economic sense) makes the problem bad enough, legislators may be forced (by public outcry) to come down hard on pharmaceutical companies. Were that to happen, once people saw a major regulatory success (in the form of single-payer for drugs), they might just decide they want it for the rest of the system, too.

State experimentation

In 2016 Colorado will vote on Amendment 69, ColoradoCare. Now if Colorado didn’t have some recent history to back up the idea of it going against the grain, we might just dismiss this push for a state-based single-payer system. But they do have that history, and who knows? It might work.

Vermont passed a law in 2011 for a single-payer system, but that plan proved unworkable and was scrapped in 2014.

But if any state succeeds with single-payer, others will follow. If they can actually save their state money and improve outcomes, their neighbors will want to get in on it.

Cultural maturity

With the rise of the Internet, with social media allowing people to see Europeans boggling over the state of US healthcare, people will sooner or later realize that overpaying for our healthcare is just plain dumb. Take drug prices, which the pharma companies claim sustain drug development. Either the rest of the world are freeloaders, or the US are chumps. The same goes for the rest of the healthcare system. It might take another 20 years, but at some point the culture will reach the point where it demands a single payer system. (This is, of course, the Bernie Sanders approach; whether the issue is ripe enough now remains to be seen.)

Incrementally

We already have Medicare, which is mostly single-payer (I’m not old enough to have the alphabet soup of parts B-D memorized, but I know that somewhere in there is some private insurance, too). Medicaid, too (disregarding the federal-state split). One of the ACA’s population-coverage improvements was via Medicaid expansion. That could just happen a couple more times, and before you know it: a single payer system.

There are other opportunities for incrementalism here. If unionizing comes back in vogue, for example, and many of the unions join up to build some gigantic insurance cooperative over time, it could be transitioned to a single-payer system.

Technological

Technology is going to be an ever-greater part of medicine going forward, just as it has been since its modern advent. The need for automation to offset labor requirements will be a huge driver in the coming decades. Depending on how fast and how far technology can go in medicine, single-payer may just come down to a sort of use tax (like that on gasoline) at some point. In this scenario the health care infrastructure may be so expensive and integrated (think the Interstate Highway System) that it requires single-payer. Or maybe it’s just mostly so cheap that the only remaining need for insurance is de-facto single-payer.

Just to be clear, I don’t think single-payer will happen short of the 2020s. But to say it’s impossible? Just use a little imagination.

This is not to say single-payer is inevitable. It may become moot. But if the US continues to overpay for healthcare, sooner or later it will become inevitable. If the interests in this field can’t or won’t work to keep prices in check until they’re on par with the rest of the world, single-payer will become inevitable.