[tptacek]

Without sparking off a huge thread on free markets versus socialized medicine, the idea behind single payer health insurance is that nobody has to worry about "expected health bills", because everyone shares a giant risk pool in which uniformly low premiums end cover everyone by shifting expenses from people who do get sick to the (larger) pool of people who don't.

Part of the philosophical idea behind single payer is that people have minimal control over financially devastating illness and injury, and one thing society can do that individuals can't is allow everyone to share the risk, transforming a small probability of an untenable expense into a certain probability of a manageable expense.

You're right, and usefully so, to point out that private health insurance is treated like a utility instead of an insurance plan; knowing that also allows consumers to select high-deductible plans, and to take advantage of HSAs for tax-advantaged funding of the health care bills they do expect.

But single-payer insurance can handle both problems (routine billing and catastrophic coverage) coherently.

[chernevik]

Individuals can share risk, that's what insurance does.

The transformation of insurance into a savings scheme puts considerable distortion on that model. It becomes impossible to see what payment is for expected treatment, and what is for risk assignment. The model then encourages people to use more ("I've already paid for it") and to pay no attention to cost. And it encourages the attitude that any problem should be paid for. It's hard to exaggerate the impact of these effects on health care's crazy cost structures.

The real problem isn't people who are riskier, it's people who are costlier. Someone with a prior condition isn't a risk, they're a cost. Insisting they should have "access to insurance" is simply insisting on cost redistribution. The circumstances under which that cost redistribution is a good idea socially should be an entirely different question than the efficient structure of health care payments.

These concepts are deliberately obscured by the political rhetoric around "health insurance", precisely to obscure the cost shifting nature of the project and to create a sensibility that the problems is somehow the greed of financiers. (Obscuring the cost drivers is also a goal, it's a very large industry that employs a lot of people, many of whom, at many levels, stand to lose a good deal if the system were ever seriously rationalized.) It's a very effective rhetorical strategy, especially given the abstractions around risk, but it shouldn't be confused with an actual discussion of the economic problem.

[tptacek]

This is a concern that could be addressed by providing guaranteed issue and a mandate for high-deductible health insurance, and then leaving it to the market to resolve the financing of everything below that high deductible.

That system is in fact not too far from what we're trending towards in the US.

[chernevik]

I don't see how you can say that. We're currently headed towards comprehensive insurance whose holders pay very little out of pocket. Consumers will have no incentive to limit consumption or make cost / quality tradeoffs, and none to police providers for cost.

And "guaranteed issue" is never _insurance_, it's cost sharing. Because it takes the known costs of some individuals and spreads them to others. It is a mandated subsidy. Doing it through "insurance" introduces opacity into the system, which obscures from the electorate the costs of the choices they're making, and reduces accountability throughout the entire system.

[tptacek]

Employees at many large companies today already have the option of high-deductible insurance; scaling the new, as-yet-unimplemented guaranteed issue system "back" to require a mandate only for high-deductible insurance (and thus guaranteed issue only for high-deductible insurance) would not be a major change.

You are articulating the "moral hazard" concern with universal health insurance. I am recognizing moral hazard, and saying that it can be addressed in a universal system simply by setting the threshold that the system pays out at a higher number.

[chernevik]

I'm not talking about moral hazard.

[anarchotroll]

Individuals can opt into an insurance plan. That's sharing risk.

What "society" (government) can do is force everyone to share THE SAME risks

single-payer insurance == monopoly

[tptacek]

Part of the notion that suggests people should be forced into sharing those risks is that nobody can rationally rule out future unbounded medical expenses; you can't predict the future, and virtually nobody has enough money to cover every plausible medical expense they might face.

So the freedom we're really talking about is --- notionally --- the freedom to make what basically must be an irresponsible choice.

It's true; single payer systems do create a monopoly for health care funding; that monopoly takes its place alongside the monopoly for military force, for air traffic control, for fire prevention, for oceanic weather surveillance, &c.

[anonymoushn]

It is entirely possible for a person to rationally rule out future unbounded medical expenses if he or she has no desire to live in agony and spend hundreds of thousands of dollars to prolong his or her life by weeks or months. Such people are forced to subsidize people who want to live in agony at high cost for small periods of time.

I don't think this is a significant problem, because the people who receive this subsidy vastly outnumber the people who provide it.

Edit: A liver transplant is a procedure with a very high expected value in terms of QALY/USD. Americans in aggregate spend a great deal of money and effort on procedures with very low expected QALY/USD. Some people, myself included, would prefer not to purchase a procedure with very low expected QALY/USD.

There was a good discussion on a similar subject earlier: http://news.ycombinator.com/item?id=3313570

[tptacek]

This argument basically says that people can avoid the expense of, say, a liver transplant by opting to die instead.

That's true, but it's not a winning argument.

[true_religion]

He's not arguing against liver transplants so you've just thrown a redherring into the discussion.

I believe his argument is that expensive end-of-life care is unnecessary because death at that point is inevitable in the immediate future. You can gain months on average, but those months aren't economically invaluable.

With limited resources, its better to spend on treatments with the greatest quality of life to cost ratio.

[tptacek]

And I'm not arguing about expensive end-of-life care. I don't have a strong opinion about end-of-life care. There could be a lot of value in changing the way we finance end-of-life care. That doesn't change the fundamental problems we have with health insurance now: either it chains you to your current employer, or threatens you with an intolerable risk of bankruptcy.

[anarchotroll]

I am sorry but the logic above could be applied to anything.

"Part of the notion that suggests people should be forced into sharing those risks is that nobody can rationally rule out future unbounded <whatever> expenses; you can't predict the future, and virtually nobody has enough money to cover every plausible <whatever> expense they might face."

Meet socialism.