Obamacare is the law of the land

Medicaid is worse than Medicare, and Medicare is subpar to many Commercials.

Many years ago, in contexts that were not about health care per se, I used to hear arguments along the lines of “foreign cars are cheaper partly because Japanese companies do not have to pay for their workers’ health insurance.” If flipped around to be about health care, it would imply that a government-run single-payer system would be a huge boon to big corporations, mid-sized companies, universities. You know - the US economy. Just not the health insurance sector, obviously.

Has that line of argument been refuted, or just forgotten?

Sorry I can’t hear you DEATH PANELS.

There should be a strong pro-business case for single payer healthcare – freeing them from this burden would surely make American businesses more competitive.

Wages might even go up. Most people have no idea how much their employer is paying to subsidize their premiums, unless they use COBRA. I remember doing so in 2005 while waiting out a non-compete. My monthly premium went from $63 to 800-something. Just a bit of an eye-opener.

Employers get a pretty decent tax break for offering healthcare as a part of a salary. If you’re company stopping offering you healthcare insurance you’re actually getting paid less. Now if you take that same amount but then it goes to say a SP environment then it’s closer to a wash, but not if you take your commercial plan with lots of options and a generally open network and substitute for Medicaid like insurance which is a huge drop in what you’re receiving.

Are you saying that the tax break employers receive is greater than the costs they incur? That’s the only way that wages would go down if they stopped offering insurance. Or do you mean that the total benefits package would decrease in value, as individuals do not receive the same tax break?

You’re certainly right on the networks things, though. I buy a gold plan from Cigna now. The network is very narrow, and you really get punished for going outside it. Happily, that narrow network includes the best facilities and doctors in St Louis, so it’s not a huge problem. At least, not yet!

What I’m saying is if I make say 50k a year and and my employers gives me 14k in additional benefits and say around 10k of that is health benefits (not an unusual scenario), that 10k costs the employer less to offer than if they gave me 10k as additional salary because of the tax breaks involved, and especially cost savings orientated for those who self-insure (not a small group). So if they don’t offer that anymore, I just took a pay cut. Now if that money instead goes to some national plan, you could say that the benefit is maybe a wash… but for Medicare and Medicaid type coverage, no I am paying the same for a pretty big decrease in coverage.

SP looks a lot easier and cleaner when you don’t look at the employer piece and focus on the individual markets, but… employer is huge.

Tax breaks so employers can cover healthcare, employers paying for healthcare so employees have more money, employees paying or not paying more taxes out of their wages so that healthcare can or cannot be covered by the government…

We’re just talking about moving money around, right?

Where are the real pinch points? The idea that the wealthy ought via taxes to pay a bigger chunk of peons’ health expenses? The idea that a less privatized health care system would reap nontrivial benefits in efficiency, management costs, etc.?

The pinch point is the cost of healthcare, not so much who pays for it.

Until we address the fact that everything we do costs two to three times as much as in other developed countries, we can’t really fix it. In the meantime, it is vital that we ensure everyone has access to this bloated, deeply flawed healthcare system (as the ACA does). But that in no way addresses the real issue.

Here is Forbes’s list of the 10 highest-paid jobs in the US. One of them is “CEO.” The other nine are healthcare providers.

And are the reasons for this well understood? If I had to guess I would assume it is a combination of doctors’ salaries, prescription drug costs, and administrative inefficiencies?

Well that’s part of the article from above. SP is just who pays for it. It does not magically fix anything with cost.

And yes, it’s important where the money is. If you make 50k with health benefits and someone else makes 50k without them, the former is at an advantage. Future state could have them equal depending on how it’s done. Also today some people take job because of the health benefits, like take a pay cut for the better benefits which not a real pay cut actually but too many people don’t count their benefits in their salary like they should.

I would love to see a high-level Cost of Goods Sold analysis of the healthcare industry. I suspect that salaries would be the single largest cost, and they would certainly be a dramatically higher percentage than what you see in manufacturing. A lot of these salaries are likely part of the administrative overhead.

But this is distinct from the question you asked, which goes more to pricing. The prices are high because it is a partly subsidized industry in which consumers are both blind to and insulated from the prices. The market simply does not work to control prices, so providers will charge whatever their local market will bear. I like this quote from a 2016 study by a professor at Yale’s School of Organization and Management:

This study tells us that insurance premiums are so high because healthcare provider prices are incredibly high. The way to rein in the cost of healthcare services is by targeting the massive variation in providers’ prices. We can do that by making prices more transparent, making these markets more dynamic, and really blunting the monopoly power that a lot of large healthcare providers have, which has allowed them to raise prices.

Don’t forget to include for profit insurance. And if doctor’s salaries are going to get cut, then something will need to be done about the staggering costs of getting a medical education.

In response to Oghier’s statement that “everything we do costs two to three times as much as in other developed countries”, Gordon posted:

The short non-technical version is that we in the US have relied on market prices for several decades longer than other developed countries, ignoring the reality that the market for health care is a flawed market, because the need for health care is not flexible. In health care, unlike say the electronics market, not getting a good or service can kill you. You can’t say “well no one is offering the kind of liver treatment I want this year, so I’ll just wait for the next model year”. If you do that, you will likely suffer terribly. For that reason, the people who need health care simply don’t have the leverage or bargaining power that is normal for a healthy market. This means health care providers have a major advantage that the providers in other industries don’t have. For that reason, health care providers can (and have) pushed the prices of health care up much higher than inflation in the US.

Every other developed nation recognized decades ago that health care is not like a simple commodities market, or like a typical consumer market, and they made changes, such as using single payer purchasing power to reduce the rate of price inflation, or using government prices controls, or various “all-payer” systems, etc. Meanwhile, we in the US have continued plugging away, trying to ram the square peg of market forces into the round hole of the imperfect health care market.

And that’s really it. Those higher prices do manifest as higher salaries for doctors (especially specialists - GP incomes in the US are not that much higher than in other developed countries but specialists are double or triple or more.) Those higher prices also manifest as high profits for drug manufacturers, medical device companies and for-profit hospitals. But the underlying engine driving the train is a lack of flexible need for health care (the 59 cent econ term is “inelastic demand”) and the fact that we have ignored this due to the market fundamentalism of the GOP and lot of Americans.

In follow up to my previous post, although inelastic demand and US health care prices are the fundamental problem, fixing it won’t be easy.

Here’s the rub: Although we do pay roughly double per unit of care compared to most developed countries, any idea that “all we have to do is copy single payer or other price controls from another country and we can drop our health care prices by a big fraction” is wishful thinking. There are realities of sunk costs and path dependency which mean that even if we overcome the vast political power of the medical, hospital and drug lobbies (it’s a trifecta of special interest power!), we still have to overcome decades of people paying for very expensive medical educations in the expectation of high incomes, decades of offices, hospitals, clinics, etc. investing in facilities based on expectations of high prices.

Also, the historical record does not support the idea that a quick shift to single payer can easily and swiftly lower prices. In other countries, health care reform did not lead to lowering the prices that existed at the time, but rather they slowed the rate of future growth. In the US, health care has jumped from 5% of the economy to almost 18% in 50 years. In some countries they implemented health care reform when their prices were only 5% or 8% or 10% of the economy and the price reforms generally kept the rate of growth more or less in line with inflation. However, we have let this problem fester longer than anyone and now we have a mountain instead of a mole hill.

In practical reality, we are probably looking at trying to level off that 18% or at least make it keep step with technical productivity jumps rather than doubling or tripling the rate of inflation as it has been. There is no such thing as a free lunch and you can’t expect decades of decisions made based upon expectations of super high prices to be undone with quick and easy reforms.

Real health care reform, which includes meaningful price reform, is going to be tough, and it’s almost certainly going to take years or decades to phase in. That’s one reason why, although I support single payer, the overly optimistic and overly simplistic single payer that the CA Nurses’ Association put forward in CA recently did not turn me on.

My view is, we need to commit to pursuing universal coverage, which can be accomplished in several ways, and consider single payer as one tool to accomplish that. But it’s going to be a long hard job no matter what we do. We let this problem go waaaaaaay too long.

Eh… I have a buddy who is an oncologist, got his degree in the US, and now lives in Canada… Doctors there still live pretty comfortably.

Well there is a difference between comfortable and the median Oncologist salary of $317K. At one point @Juan_Raigada talked about surgeon salaries in Spain, the difference was striking. Honestly, 300K doesn’t seem crazy high for a specialist, given the brains and education required, but it is still a lot of money.

Plus as always, we don’t really know what the salary represents. Is that average pay of hospitals, Kaiser, government etc?. Does it include the money doctors who own medical practices make?

Here is an interesting factoid. If we taxed the profits of all the corporations in the US at 100% (ignoring the fact that a lot of the money is made overseas and not easily taxed) that’s 1.65 trillion dollars. Those profits would pay for 1/2 of the cost medical care in the country.

When you think of salaries in the USA for physicians, you have to start here or information like it from whatever resource you choose:

https://members.aamc.org/eweb/upload/2016_Debt_Fact_Card.pdf

The debt they start with.

WalletHub ranked Oregon No. 49 overall. Only New Jersey and Rhode Island ranked worse. The top three best states were South Carolina, Minnesota and Texas, in that order.

Oregon did especially poorly in average starting salary (No. 45), adjusted for the cost of living: $2,112 per month. Arizona has the top average starting salary, at $3,400 a month.

As far as average annual wage, Oregon did a little better, at 39th. Family physicians and general practitioners make, on average, $146,000; internists, $175,000; Ob/Gyns, $194,000; pediatricians, $151,000; psychiatrists, $182,000; and surgeons, $173,000.

Some data from Oregon Labor Dept on it:

My brother is a surgeon with an in-demand area of specialization. He estimates that he’s 5 years from retirement right now. He talks all the time about how doctors are retiring early because they’ve paid off their loans and are in decent shape financially and the hours and pressure of the job simply aren’t worth the declining compensation anymore. And new doctors are discovering rapidly that the velvet rope on the medical profession has been put into place, and unless you know someone or can get into a lucrative practice in some other way…you’re shit outta luck. You’re not getting into the club anymore, much less the VIP room.

No doc expects anyone to feel sorry for their financial situation, and US physicians certainly aren’t indigent. With that said, however, newly certified doctors and physicians have to choose much more carefully where they practice and how they may evolve their areas of specialization after graduation. And that calculation basically effects healthcare across the US, especially in rural areas. There’s just no way a doctor can make ends meet anymore in smaller communities.

All of these statistics about medical debt etc. are examples of the sunk costs and path dependency I was talking about. Basically, because of inelastic demand and our failure to adjust to it, we have a huge cost bump baked into the cake of our health care system and it’s not something you can just “fix” (as in reduce prices by half) with a quick solution.

At the same time, the sunk costs and path dependency don’t mean we are unable to reform the system. There are numerous examples of other countries successfully “bending the cost curve”. My view is that our current high-price-growth system is unsustainable, and at the same time, a quick fix to drop prices is unworkable. The solution is a long term plan to slow the price growth and put US health care on a sustainable path over the long haul. Due to inelastic demand, there is no purely market based way to do this, so we need to look at a variety of government tools, which IMO includes both looking at single payer options and also looking at mixed / Swiss Model options.