One of the issues often pointed out about single-payer, Medicare-for-all is that the US system has an extreme problem with prices and processes. Surgeries, hospital stays, ambulance visits, medical appliances, and drugs are all vastly over-priced. The actors in this: hospitals, drug makers, and appliance makers, among others, have great interest in 
maintaining high prices. Just switching to, “the Federal government pays” doesn’t fix all the fucked up prices, incentives, and wrong things that are being done.
One thing to understand about single payer is that it can be used to fix hospital and other prices. You make the government a monopoly buyer of health care. The government sets the prices, period. “We will pay X. This is a take it or leave it price. No one else can pay you, it’s not even legal for anything that we pay for.”
Now this doesn’t entirely work if you aren’t a hegemonic or at least a “Great Power,” because too much stuff comes from outside and externally applied laws, especially IP laws, impose limits. It is worth it for providers to just stop selling to you if you won’t pay their over-inflated prices.
But if the US does it, and is serious (meaning it will change other laws if required), it can set almost all prices.
“We’re going to give you cost +5% profit over inflation. And that’s it.”
To do this properly, the next thing you do is have some hospitals run entirely by the federal government so they know the actual price structure. You also have the government do some drug and device design+ manufacturing. This is so you can’t be snowed about cost/price.
This isn’t just on-shoring production; it is having the government do the work itself. This also includes research: Some is done in-house — and not at universities or private firms, again so you can directly observe what the actual cost is and what the processes are. (Universities are terrible actors when it comes to research, often taking 80 to 90 percent of the money that supposedly goes to researchers as “fees and rent.”)
It does not matter if public drugs, hospitals, appliances, or research cost a little more or less, the function isn’t to be the “cheapest” — the function is to make sure government knows how things work and can’t be cheated by private providers.
You also must break up all oligopolies, monopolies, and cartels, so that no private outfit can control prices and try to challenge you with a “we’ll walk.” There should always be the government plus at least five providers in any reasonably large health care-related industry and if the country is large enough, even the government should have more than group doing it. (In the US, the Veterans Admin + HHS or something + various others).
Nothing that is truly important (vaccines, as the most current example) can be just imported unless you truly cannot make it or learn how to make it. Create a domestic industry. Let other countries do so. IP Laws MUST be amended/broken to allow this and yes, the US has sufficient power to more or less “just” do this. (The EU will be a stumbling block, but they don’t have a veto on the US).
If you need things that must be bought, in effect, in a currency you can’t print, you are not free, and you cannot control prices or outcomes. Pure autarky is not possible right now, but you want as much as you can reasonably get on anything essential.
I see no reason why all hospitals shouldn’t be independent, by the way. No groups, no cartels, etc. This will allow for actual innovation.
Finally, as a general rule, you mandate outcomes not processes (except your payment processes) so that various providers, including those operated by your own government, can innovate. Mandate process and innovation dies.
To summarize: Single payer is used to force all the other necessary changes. “You are paid by us, and only us. If you wish to stay in business you will do what we want done.” To do this correctly, you must truly understand what is wrong and what is currently possible and you must remove any actor with sufficient power to distort information or who will try and enforce any type of veto or a compromise on you (i.e., “everyone else has to make cost+5%, but us.”)
Every other country but the US has big problems when doing this because of how the current world order is set up in terms of trade and IP Laws, and even the US will have trouble even though the current trade regime was its own creation more so than any other entity. But the US retains, for now, more freedom to act than any other country in the world. Only China and the EU, if you consider the EU a country, come close.
Now, understand that this is not a “what I think will happen” post. This is an article setting out what would happen if the US government and the American people were serious about doing Single-Payer / Medicare-For-All properly. It is an “ideal type” which allows you to judge proposals and anything that happens. It can, of course, be used to judge doing things properly in other countries too, with the understanding that other countries suffer constraints the US does not, often constraints enforced primarily by the US and the EU.
May we come to a world where posts like this are well-understood because the actions outlined are being done, and where everyone gets the health care they need at a reasonable price and those who create the future of health care are concentrated on cures and good health throughout everyone’s life, not palliatives, high profit, and just keeping unhealthy people stumbling along as they suffer.
(The more people subscribe or donate the more I write and the happier I am. So please consider doing so if you like my writing.)
bruce wilder
A minor point: none of what Ian talks about here is nearly as “revolutionary” as the blindness to actual government policy imposed by neoliberal ideology makes it seem. The Federal government, for example, has set the number of slots at university for MDs for decades. The number of doctors entering medical school is set by a vote of Congress. This is rarely reported in the Media and is no part of the neoliberal image of health care in a “market” economy. And, the whole system is like that. Medicare and Medicaid already spend more per capita on health care than practically any other advanced country in the world. Hospitals, medical research, drugs — everything is regulated in a detailed way. You want to know why that incompetent 80-year-old knome named Fauci is featured everywhere? Because he controls $32 billion in medical research funding, funding that can or break academic careers.
Acknowledging this makes it even more clear that the problem is not resistance to departing from the practical implementation of a “market model” that nowhere operates, but, rather, marshalling the political will to operate the system in the public interest and against often obviously unwise concessions to private greed and irresponsibility.
This should include operating the “insurance” aspects of the system in ways that reduce suffering and precarity. The crazy way tort law is used in the U.S. is something that a thorough health care reform would go a long way to resolve.
metamars
This is my biggest concern with “medicare for all”. An extremely screwed up system will just get guaranteed money from the public coffers, with some window dressing “savings”, here and there.
I had a discussion once, with somebody who worked in pharmaceutical research. I mentioned that the VA will pay less for drugs than those purchased under Medicare Part B coverage, because of restrictions against bargaining with the latter. And he informed me that, actually, even the VA is not getting a great price.
Oh…..
I’m also becoming increasingly suspicious that just comparing the US to European countries UNDERstates the price gouging in the US. OK, so we pay double what northern Europeans pay, but what is that really saying? With this covid mess, we’ve seen in the UK, SAGE push garbage ‘science’ models, while still hampering hydroxychloroquine and ivermectin.
If we manage to drop our healthcare tab to that of the UK, is that REALLY something to brag about?
This points to another fundamental point: healthcare vs. wellness promotion. The best way to treat a disease is to not get it; or, at least, not get a case of it that injures you (such as covid). Probably the biggest killer in the US is the diet, especially frequent feeding on carbohydrates, especially fast carbohydrates, especially sugar. The plague of type 2 diabetes is mostly preventable, as well as reversible. And all of the diseases downstream of diabetes would also be attenuated. Dr. Hyman went into the staggering cost associated with diabetes and insulin resistance, in one of many interviews on youtube, but I didn’t bookmark it, properly.
Ah, but the US government, staring down the face of a pandemic, can’t even bother warning it’s darker skinned, and older citizens to get their vitamin D levels checked. No, not even at their own expense! 76% of African-Americans are vitamin D deficient, but tough luck, for them! They can wash their hands and wear a mask. But gee, isn’t racism a terrible thing?
Actually, it was profiteering-induced, massive corruption that killed so many black Americans via covid, not racism.
So, “healthcare” is basically a scam, in the US. It PREVENTS large scale changes for the public good, with profit as the likely main motivator for the people controlling the chokepoints* – regulatory agencies, medical boards, and hospital administrators. Well, we need to add “tech giants” to the list of perps; Kim Iverson won’t even post her detailed videos of ivermectin use in India on youtube, for fear of getting deplatformed. Nope, it straight to vimeo. Chris Martenson, who did stellar work actually digesting the science (instead of parroting liar like Fauci, MSNBC-style, and SAYING they were “following the science”), refers to hydroxychloroquine and ivermectin as “wizzibin 1” and “wizzibin 2”, on his youtubes.
Oh, and let’s not forget the insurance companies, either. Though, in fact, on rare occasions they’ll even buck the FDA. I recently learned that they’ll pay for hyperbaric oxygen therapy, even without FDA approval, because it saves them so much money. If you are diabetic, with a foot wound that won’t heal, you should definitely look into this.
* I view doctors as both victims, and low level perps of the system.
Dan Lynch
Ian is spot on. I would only tweak it by instead of having a few government run hospitals, I would nationalize all hospitals.
My reasoning:
— hospitals are the largest cost in US health care.
— many rural hospitals will never be “profitable” from a business point of view, and rural areas are underserved, anyway.
— hospitals should have excess capacity to deal with emergencies like covid, but excess capacity is not “profitable” and M4A, being a fee-for-service system, does not change that.
— the non-profit hospital system has proven *NOT* to solve these problems. Non-profits are still run to maximize revenue and minimize cost, about the only difference is they don’t pay taxes.
— doctors waste so much time dealing with billing issues and while M4A streamlines billing, it does not eliminate it because M4A is still fee-for-service. Imagine if the burger flippers at McDonalds, instead of being paid an hourly wage, were on fee-for-service and had to submit a billing code for every single burger and shake? It’s just crazy to do it that way. Pay doctors and nurses an hourly wage like most other workers, no billing required.
And that comes to my beef with M4A — no matter how well you design it, it’s still fee-for-service, which requires doctors to waste time dealing with billing codes, and choosing treatment based on what is bill-able instead of what is best. There is no evidence that fee-for-service produces better outcomes than socialized medicine like the VA or like Cuban health care or like the NHS before it was gutted. I could go along with a mixed system that has fee-for-service for small private practices, clinics, and labs, but nationalized hospitals where staff simply punch a time clock.
Obviously nationalizing hospitals will require a major political leap that probably is not going to happen in the U.S., but I am talking about how things ought to be not what is politically achievable in this failed state.
Plague Species
Not to sound, or be, defeatist, but, there’s a wall in the way of this or any “progress.” That wall is politics and it’s quadruple reinforced.
S Brennan
The revered scientific journal The Lancet, sets out to destroy the last remaining shred of it’s credibility:
Dr Peter Daszak, Scientist At Center Of Lab-Leak Controversy Put In Charge Of The Lancet’s Task Force To Investigate COVID. – Jun 04, 2021 – Steve Watson – Summit News,
The Lancet has created a ‘task force’ to investigate the origins of the coronavirus that caused a global pandemic, yet it has decided to employ as it’s leader the very guy who funded the dangerous gain of function research at the Wuhan lab and subsequently allegedly ‘bullied’ other scientists into avoiding looking into the lab as a potential source of the outbreak.
Dr Peter Daszak, who is heading up this task force, is perhaps the least suitable scientist on the planet to objectively analyze the data, given his track record.
Daszak, as President of the EcoHealth Alliance, fronted for Fauci in shoveling funds to the Wuhan Institute of Virology in the past few years to play around with corona viruses inside the lab through the now infamous ‘gain of function’ research.
Daszak, is on record admitting that he was involved with manipulating corona viruses. There is a video of him talking in DECEMBER 2019 about how ‘good’ the viruses are for altering in a lab: “coronaviruses are pretty good… you can manipulate them in the lab pretty easily… the spiked proteins drive a lot about what happens. You can get the sequence you can build the protein, we work with Ralph Baric at UNC to do this, insert into the backbone of another virus and do some work in a lab.”
Daszak as lead investigator for the WHO investigation determined within 3 hours of visiting the Wuhan lab in February 2021 that there was ‘nothing to see here’? Recently released emails now document that Daszak thanked Dr Fauci for dismissing the lab leak theory before any scientific research had been done on the possibility.
Daszak was later employed as an ‘expert fact checker’ by Facebook when it was monitoring and removing ‘misinformation’ about the origins of COVID on its platform, much of which was credible scientific research. Facebook has since reversed the policy of banning any posts containing information suggesting COVID-19 was “man-made”.
Why does this guy keep getting put in charge of investigations, task forces and ‘fact checking’, when it’s abundantly clear that he has the biggest motive to dismiss the lab leak notion?
As microbiologist Professor Richard Ebright has noted, “Daszak was the contractor who funded the laboratory at the Wuhan Institute of Virology that potentially was the source of the virus with subcontracts from $200million [£142million] from the US Department of State and $7million [£5million] from the US National Institutes of Health and he was a collaborator and co-author on research projects at the laboratory.”
Daszak has already lied about the type of research that was being conducted at the Wuhan lab, claiming, after the outbreak happened, that he didn’t know if it was gain of function or not. His own previous statements, and the Fauci emails prove he knew full well what was going on in the lab.
In addition, as reported by The Daily Mail and other outlets, Daszak “orchestrated a ‘bullying’ campaign and coerced top scientists into signing off on a letter to The Lancet aimed at removing blame for Covid-19 from the Wuhan lab he was funding with US money.” Daszak used his influence to get the journal to publish the letter, which stated that to even suggest the lab leak theory had any credibility was equal to spreading “fear, rumours, and prejudice.” It effectively shut down discussion among the scientific ‘consensus’ of the lab leak potential for a whole year until intelligence findings brought the matter back to the attention of the mainstream media.
WHO scientific advisor Jamie Metzl described Daszak’s letter as “scientific propaganda and a form of thuggery and intimidation…By labeling anyone with different views a conspiracy theorist, the Lancet letter was the worst form of bullying in full contravention of the scientific method,” Metzl added.
The letter stated that “We stand together to strongly condemn conspiracy theories suggesting that Covid-19 does not have a natural origin,” and even had the audacity to state that “We declare no competing interests.”
Indeed, Daszak had made sure that the letter would be devoid of any link to EcoHealth, and even considered leaving his own name off it, emails released via the Freedom of Information Act have revealed.
To make matters worse, the other members of The Lancet’s task force are practically all minions of Daszak, some of whom helped him draft the letter that unequivocally stated the lab leak theory was dangerous, and others who either worked with him on ‘fact checking’ for Facebook, or were cited as sources during that activity.
Taking all this into account, it is obvious what the outcome of The Lancet’s inquiry will be, and it should not and cannot be used as credible evidence against the lab leak theory.
Mark Pontin
Ian W. wrote: ‘One thing to understand about single payer is that it can be used to fix hospital and other prices. You make the government a monopoly buyer of health care. The government sets the prices, period.’
This is essentially what the UK’s NHS does. So you don’t have to be a Hegemon or Great Power to do this, unless the UK is still a Great Power. You just have to be big enough.
metamars wrote: ‘With this covid mess, we’ve seen in the UK, SAGE push garbage ‘science’ models, while still hampering hydroxychloroquine and ivermectin …If we manage to drop our healthcare tab to that of the UK, is that REALLY something to brag about?’
It is if you get the longer lifespans and better outcomes that accompany it. As to the UK/SAGE pushing garbage science model, that’s a little different a story — a dunciad, as for seven weeks — seven fricking, fracking weeks — the Johnson government and its senior civil servants were literally too stupid to understand/admit that the UK National Pandemic plan it had taken out of the drawer was for influenza, an entirely different pathogen.
Mark Pontin
Just to be clear about the US system, healthcare is now closing in on being approx. one-fifth (1/5) of US GDP. This is from 2018 —
https://www.statista.com/statistics/268826/health-expenditure-as-gdp-percentage-in-oecd-countries/
So the US spends far, far more on healthcare than any other country, and twice as much as the UK and NZ. Simultaneously, IIRC, it ranks at number 38 in terms of outcomes last time I looked, which is almost Third-World level.
As a result, however, the rich in the US — that’s who healthcare and insurance company shareholders are, mostly — are able to loot one-tenth of US GDP approximately through the US’s currently existing ‘healthcare’ system for no return value.
And that’s why it’s not going to change.
js
On the politics side, one step being worked on is to push the ability of states to use Federal money from Medicare and Medicaid and the ACA on trying out state level M4A. This only works in a sufficiently sized blue state (some red states didn’t even do Medicare expansion under the ACA), so yes California is one candidate.
“where everyone gets the health care they need at a reasonable price and those who create the future of health care are concentrated on cures and good health throughout everyone’s life, not palliatives, high profit and just keeping unhealthy people stumbling along as they suffer.”
would be nice, almost a dream, all of us know that access to the healthcare system is one problem, but there are so many other problems after you even get that far, it’s not a system that serves people very well.
Joe
I think the fed govt has been running hospitals through the VA hospital system already, so new ones do not need to be established necessarily. Medicare also has fairly static pricing already.
metamars
@M Pontin
“It is if you get the longer lifespans and better outcomes that accompany it.”
The point I was driving at is that just reducing expenses by 50%, with no loss of quality, is a modest goal. (Ignoring the practical impediments of greedy/corrupt stakeholders ….) I don’t see why the goal should not be reducing expenses by, say, 75%.
If reducing expenses by 50% was accompanied by better, UK-like outcomes, that’d be even better than with static outcomes, no doubt, but I still wouldn’t consider it something to shout about. Unless there’s some extraordinary difference between US and UK outcomes that I’m not aware of.
Besides reducing expenses by 75%, say, the goal should be to get much better outcomes. That is impossible without getting serious about diet, fasting, basic nutrition (vitamin D and magnesium supplementation, for starters), good sleep (so controlling blue light*) and low cost therapeutics. Hell, even making Finnish saunas affordable for everybody would probably save money, even as it certainly would prolong lives, in the end. (I mean shared saunas, not personal ones in homes. )
I have often complained about missing, or, at best, hidden cost/benefit calculations for public policy regarding “climate change”, but more recently covid hysteria. Likewise, the public should have credible, readily accessible cost/benefit calculations to examine, regarding health policy.
I can easily guess that widespread, shared, Finnish saunas would easily pay for themselves, but that is different from pointing to a reliable study that makes the case.
* legislation or regulation would help with this. smart phone manufacturers deliberately use more blue-light, as it makes their products more addictive
VietnamVet
The Western medical system is not for the well-being of American citizens. It is 17.7% of the US GDP. Based on European costs, half is profit sent directly to “job creators”. European, the Americas, and South Asian governments are so corrupt and incompetent coronavirus is now endemic there. The Indian variant is resistant to mRNA “vaccines”.
The image of the sculpture by James Muir of Caduceus is apt. He is younger than I, attended West Point, and he missed the whole point of the Vietnam War. His sculpture of June 25, 1876 is a John Wayne tribute to the conquest of the West. But the Western Empire is dead. If democracy and the US Constitution is not wrestled away from global financiers, the US Civil War never ended either.
metamars
“The Indian variant is resistant to mRNA “vaccines”.
Source?
nihil obstet
If it’s a business, the businesses will game it. Outcomes not processes? You’d have to define the outcome and set up a way to measure it. If I remember correctly, Ian has written on the problems with measurements as a way station towards better situations. Right now Medicare is being gamed by the private physical therapy industry. Medicare will pay as long as the patient is improving. So the therapist’s initial assessment shows that the patient can barely move. Then every session thereafter shows the patient improving, as each session adds some minimal activity to show improvement over the previous session but lots less than the patient can do so that there’s room for improvement in future sessions.
The description in the post describes what needs to be done for single payer to work well. However, in a contest between what may happen between this description of single payer and a national health service, I think a national health service is as likely to come about. That’s where I’d put my efforts.
Other objections — I don’t think marketplace competition leads to the right kind of innovation. I also don’t quite get the point of different providers in healthcare, since it’s not really a go-shopping kind of service for most of us.
metamars
Yikes. I was skeptical that VietnamVet even had a trustworthy source. Well, for whatever it’s worth, reuters is carrying “India COVID-19 variant exhibits resistance; antibody drug shows promise”
which says,
“Antibody drugs and COVID-19 vaccines are less effective against a coronavirus variant that was first detected in India, according to researchers. The variant, known as B.1.617.2, has mutations that make it more transmissible. It is now predominant in some parts of India and has spread to many other countries. A multicenter team of scientists in France studied a B.1.617.2 variant isolated from a traveler returning from India. Compared to the B.1.1.7 variant first identified in Britain, the India variant was more resistant to antibody drugs, although three currently approved drugs still remained effective against it, they found. Antibodies in blood from unvaccinated COVID-19 survivors and from people who received both doses of the Pfizer/BioNTech vaccine were 3-fold to 6-fold less potent against the India variant than against the UK variant and a variant first identified in South Africa, according to a report posted on Thursday on the website bioRxiv ahead of peer review. The two-dose AstraZeneca vaccine, which does not protect against the South Africa variant, is likely to be ineffective against the India variant as well. Antibodies from people who had received their first dose “barely inhibited” this India variant, said study co-author Olivier Schwartz of Institut Pasteur. The study, Schwartz added, shows that the rapid spread of the India variant is associated with its ability to “escape” the effect of neutralizing antibodies”
So, 1 dose is almost as good as nothing(?) Since you’re supposed to take 2 doses, that may not be that significant, if there’s such great suppression of coronavirus that even a “3-fold to 6-fold less potent” effect will be more than enough. However, this is not spelled out, or even implied.
Since therapeutics like hydroxychloroquine and ivermectin reduce viral shedding, plus severity, I think it can be argued that suppressing these affords the virus more opportunities to mutate* …. While simultaneously providing an evolutionary selection pressure in favor of mutations that eventually make the therapeutics less effective…. My layman’s guess is that the virus should have been hammered with therapeutic/prophylaxis, while safe vaccines were developed and TESTED.
According to Dr. Pierre Kory, doubling or tripling ivermectin dosage is safe, while also effective against the Indian variant.
* If this is true, it needs to be considered in any possible trial against the Tony Fauci’s of this world, who suppressed therapeutics.
bruce wilder
Years ago, when I was young enough to be enthusiastic about fitness, I would encounter people with no intention of ever deliberately making an effort in the gym tell me
1.) they would like to lose weight look better;
2.) they worry about getting too muscular.
I feel like the discussion of the frustration with U.S. health care runs into a similar psychology.
Tell people we could have better outcomes, better health and spend less and they worry that we will find ourselves underspending the Brit’s NHS!
Meanwhile, the inability to marshal political will to operate the system we have as a public utility (admittedly against the formidable opposition of an army of financial parasites) leaves the situation unchanged.
Synoptocon
A couple of comments founded on having spent a couple of decades at the intersection of academia, industry and government:
1) Active government as a magic wand, at least currently, is a terrible idea. The ascendancy of the political advisory class, combined with low quality political talent and a noisy operating environment – where everyone is drowning in raw data, but lacks the time and intellectual chops to make sense of it – has created unbelievable structural weakness. The quality of decision making is terrible, uniformly, regardless of the party in power – government is in large part a hollow shell. Furious activity, mostly in support of a prime directive that one shall not surprise the minister.
2) Overhead is nowhere near 80% to 90% – 30% would be more the baseline and I’ve seen lower in some universities. The big three funding bodies NSERC / SSHRC / CIHR have seen enough of this movie and they have exactly the type of pricing power you’re talking about above (in fact, their overhead costs are covered by a separate fund and are not directly tied to granting – the relative sizes of the funding envelopes would be less than the 30% baseline).
3) I don’t think single payer strategy requires one to be a great power, at least not as commonly defined. We do it and we’re not a great power.
Robert Hertz
I am in favor of hospitals being put onto global budgets, as described in HR 676?
If this could actually be accomplished, it would create huge legitimate savings.
. With no more individual hospital bills, health care bankruptcies would be reduced and insurance premiums could plummet.
When hospitals rely on user fees, they incur one set of costs to create individual bills, and then incur another set of costs to collect from both patients and insurers. It should be much cheaper for them to have an annual global budget, like the fire department, with no need for individual bills at all.
However–
• who would set over 5,000 individual hospital budgets?
• Who would decide which hospitals have salaries that are too high, or too much expensive equipment?
• Would the government just give a huge lump sum to each region?
Imagine a CMS staff person telling Mayo Clinic hospitals what to spend.
Would Congress ever close a rural hospital, and put its employees out of work?
Plus, if anyone later died because they had to drive an extra 50 miles to an ER, the ‘rationing’ cries would arise again.
Full global budgeting seems like a bridge too far at this time.
In addition, there is no shortage of stories about ugly mismanagement in both English and Canadian hospitals. Of course some of these stories are planted by the foes of single payer, but not all of them I suspect.