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by jjoonathan
4366 days ago
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It's evil, inconvenient, and (amazingly) it's even less efficient that its government-run counterparts both inside and outside the US: http://healthcarereform.procon.org/view.resource.php?resourc... What will it take to convince people of this? Our society already accepts that markets aren't a suitable medium for every human endeavor, how long must we continue to experiment with private (basic) health insurance before we add it to the list of exceptions? If our health sector ran as efficiently as everyone else's (as a fraction of GDP/capita), the money we currently pay for medicare and medicaid would suffice to provide universal coverage for every single person in the US. http://healthcarereform.procon.org/view.resource.php?resourc... |
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This isn't an apples-to-apples comparison for several reasons (some which overstate the amount of money, some which understate).
One, there are a number of things which fall under Medicare's budget which you and I wouldn't think of as the "main" purpose of Medicare in this context (ie, providing medical insurance to the elderly).
On the other hand, look at the profit margins of any hospital broken down by insurance status. Virtually any hospital hemorrhages money on uninsured patients, Medicare patients, and Medicaid patients. They make this up by charging patients on private insurance, and in the end eke out low single-digit profit margins if they're lucky (most aren't). If you're on private insurance, you're essentially subsidizing the medical care of the aforementioned groups (whether you pay it in the form of your deductible, or in the form of your premiums[0]).
As the largest payer, Medicare has the leverage in order to decide what it will and will not pay for, and providers have very little choice but to accept that, whether or not it's economically feasible for them. (This is the exact inverse of the situation most of us are in with our ISP/cable providers (we have an essential monopoly on broadband access in most parts of the US). When there is a single purchaser, this is known not as a monopoly but as a monopsony[1])
It's easy to say that "costs are too high" - that's fine, but where are they too high?
The easy response to this is that hospitals and doctors are making too much money. But in reality, most hospitals are struggling just to say solvent, which is why we've seen massive consolidation in hospitals in the last several years as hospitals go out of business. The same is true of doctors, who are selling to these larger hospitals because their private practices are now financially unsustainable[2]. Of course, this really just pushes the problem up the food chain, because those same hospitals are already struggling to keep the lights on.
I don't really have an answer to this, by the way... I just want to relay an appreciation of why the situation hasn't been fixed yet - it's very complex, and nearly every option involved has significant, serious tradeoffs that nobody really wants to address (whether for political reasons, ethical reasons, or otherwise).
[0] Remember that the size of your premiums are (loosely) linked to the expected value of providing medical care for you. Mathematically this is trivial to show - in reality, the market isn't so efficient, but it's simple enough to say that if your insurers' costs go up, in the long run, your premiums will as well.
[1] https://en.wikipedia.org/wiki/Monopsony
[2] This 116-page report gives a very extensive analysis of the economic state of physicians. Don't be fooled by the title - this trend began long before the ACA, even though the scope of this study was the impact of the ACA specifically (which has contributed to the trend which previously existed): http://www.physiciansfoundation.org/uploads/default/Health_R...