Obama's Road To Single-Payer?

Ezra is unhappy that we've splatted right back into the pit of bullshit campaign coverage, so let me try to distract him by asking a nice wonky question.  What happens to the health insurance business if Obama's health care plan passes?  Can a quick road to single-payer emerge from this?  Let me describe the scenario I've been wondering about. 

Obama has guaranteed issue and no universal mandate.  In other words, the insurance company can't look at your pre-existing conditions and deny you coverage, but you can choose not to be covered.  So you can use your superior knowledge of your own medical situation to project your future health insurance costs and then decide whether or not to buy insurance.  This seems like a recipe for running insurance companies out of business -- sick people will buy insurance while the young and healthy won't, and the insurance companies will be likely to lose money on just about every client.  So they fold. 

Usually, that would be a bad thing.  If you want everybody to have something, you don't want to run the providers out of business!  But in this case, running the private providers out of business just leaves room for the more efficient public providers to take over.  With the private insurance companies collapsing, everyone who needs care will pile into the public system, with their health care paid for by general revenue.  And with everybody who needs care already covered by the government, it's not hard to set up the single-payer utopia of the future.  It all ends up being kind of like the Edwards plan where public and private options would compete, and the eventual victory of the public option would lead to single-payer.  But in this version, Team Private gets its feet cut off before the competition starts.  Which is all cool by me!

Comments

[Nicholas Beaudrot]

I think once again the response is "politics, politics, politics". Can Obama's plan, as proposed, pass? Is it likely to be what emerges from the sausage factory that is Congress? I have no idea.

[Stephen]

But in this case, running the private providers out of business just leaves room for the more efficient public providers to take over.

Periodic bailouts are a more likely outcome, as is an eventual rejection of any type of publicly-funded health system because, "We done tried that there socialist medicine and it don't work worth a damn."

Or maybe I'm just being a pessimist.

[Nate]

Neil when you base your opinion on junk science you tend to have opinions worth junk.

First any study on something as absolute as heatlh care expenditures that bases it conclusions on self assesment studies;

"over one-third of adults with Medicaid report that they are in fair or poor health, compared with only 11 percent of the privately insured."

They also tend to report the world is unfair to them, police single them out and they where abducted a couple years back and had a probe inserted.

There is hard solid data on the uilization of service by both populations. If they have to resort to opinion studies to make their numbers dance it's BS trying to be science.

The MEPS data doesn't provide data in a format that would allow for a comparison of OOP cost. That data is also meaningless without factoring in consumption. If someone who uses 3 times as much HC only pays twice as much out of pocket that would be efficient not inefficient as your study calims.

Did you even read the survey? Look at this laugher;

"Rather than estimating separate models of the effects of full-year coverage based on Medicaid and lower-middle income private insurance as previously done, a single model that combined the uninsured with all people with full-year coverage with family incomes less than 400% of the poverty level was estimated. This choice reflects the assumptions that extending Medicaid-like coverage to all uninsured would increase political pressure to make program payments more generous and closer to rates paid by private insurance "

This study has more assumptions then the internet has progressve asses. Medicaid by no measure is nearly as efficient as private insurance. The only reason it's not considerably more expensive is becuase the governemtn can dictate reimbursment rates. If Medicaid paid rates equivalnt to private insruance it's would be 20-40% more expensive then it already is. Average Americans would never excelt a Medicaid for all program with limited provider access and substandard care. To assume Medicaid would thus have to raise it;s reimbursements yet magically stay at the same per capita cost is impossible. It's junk science for people to lazy to read the study, those that just want a pile of paper to flare around to "prove" their point.

While your at it could you please explain how the 10% fraud rate in government ran systems will magically disappear in your single payor utopia? That 10% lost to fraud when coupled with taxes is equal to the entire adminsitrative cost of private insurance. Does your single payor utopian system have some magical process to adminster the entire system for free?

[Neil the Ethical Werewolf]

First off, I'm willing to trust studies coming out of the Kaiser Family Foundation more than I'm willing to trust the ramblings of some dude who can't spell or use commas properly.

Studies of economic phenomena are always based on a bunch of assumptions, and I don't see why these assumptions are particularly implausible.

On the last point, the sentence "That 10% lost to fraud when coupled with taxes is equal to the entire adminsitrative cost of private insurance" is easily sillier than anything you've cited in the study. Why are we combining fraud with taxes, again? And why are we pretending that private insurance is immune to fraud?

[Neil the Ethical Werewolf]

Nick, if the Obama plan passes, we then get the question of whether we can slide it into single-payer like we can with Edwards. If the plan has that feature, I'll be very excited.

[KathyF]

Are you allowed to comment on this if your name doesn't start with N?

If so, I'd just like to say I've been thinking along the same lines myself, and I suspect it's a thought that's whirled around inside Obama's head as well. Yet it's something perhaps politically impossible to state out loud. Just see what his preference for orange juice over coffee did to him--do you really think an equally healthy position on health care would be greeted any more thoughtfully?

[BruceMcF]

No, if it slides in that direction, that's not the way it slides that way.

If Obama is thinking in those terms, the way it works is:

(1) He puts his plan to the House, and in a high profile series of negotiations, ends up with a plan that no Republican Senator can support unless it has mandates, because once the bill comes out of the House, mandates would be required to level the playing field for health insurance companies.

(2) enough pressure gets put on enough Republican Senators, that some health insurance companies get nervous, break ranks, and say, "make a deal if you can get mandates put in there".

If a plan will in fact put health insurance companies out of business in the short and medium term, it will not get through the Senate. Full stop and period.

[Neil the Ethical Werewolf]

Unfortunately for members of the O-team like Kathy and myself, it seems that Bruce is right. Ezra responds in detail here.

[Nate]

"And why are we pretending that private insurance is immune to fraud?"

We are doing no such thing, but when real studies are done using real numbers it has been shown time and again that single payor government systems lose 10% of expenditures to fraud versus 1-2% for private insurance. It is common knowledge and proven fact that single payor government systems lose 8%+ more to fraud, so when you make a claim that single payor is more efficient while conveniently leaving out the much higher fraud rate you are being deceitful about the expected outcome. Moving to single payor system would not, in any reality, lower cost.

The fact you trust information based solely on its presentation is enlightening of your intellectual standards. To know complete BS and junk since when preceded by a Kaiser Foundation mast as well as having been thoroughly spell and grammar checked automatically is granted authenticity would seem to make you very susceptible to manipulation. Do you believe everything you read as long as it is in the daily paper?

Studies of studies of any phenomena when based on self assessment surveys have been shown to be highly inaccurate. It is also logical to question why someone would resort to such a survey when hard empirical data is available. Why ask 1000 people how healthy they are to extrapolate that onto a population of millions when you have the actual data on the millions? Any extrapolation, be definition, is less accurate then the actual data. The only reason to do this is if the actual data doesn’t support your point.

“A recent newspaper survey stated that 19% of Americans thought themselves in the top 1% of income.”

www.sci.ccny.cuny.edu/~stan/BJEP.SDG.pdf

“In examining the characteristics of respondents who poorly self-assess, we find that low income households and those with a poor economic safety net self-assess poorly relative to their peers.”

www.frbsf.org/community/research/assets/WhatPricePerception.pdf

Read this one it is specifically about the accuracy of self reporting in relation to Hypertension and Diabetes, they find 50 and 83% accuracy on something that specific, imagine how low it would be in broader more general questions.

opr.princeton.edu/papers/opr0203.pdf

I’m curious do you still see these as the ramblings of some dude who can’t spell or use commas properly? And does it not bother you in the least that said dude can completely invalidate an entire study from your esteemed academics from knowledge off the top of his head? If I the uneducated dude can tell how poor the study was why didn’t you?

[Nate]

"Why are we combining fraud with taxes, again?"

Sorry forgot to answer this one for you, but it is something you should know already of your going to advocate for scraping our current system. You claimed single payor is more efficient then our current system, this is inaccurate on many levels and no where close to reality. The easiest method of discreditation is simple math, the majority of uninformed people can follow it to conclusion. If you take the administrative cost of private insurance and remove tax obligations that single payor government systems don’t pay and add the increased fraud rate to single payor’s administrative cost, both necessary to do a fair and accurate comparison of cost and efficiency, single payor is considerably more expensive. That is why you combine taxes and fraud when comparing systems.