In the ideal world I'd definitely prefer a single payer system. I'm not aware of any advantage for profit, private insurance companies offer us and they have many devastating disadvantages.

Political reality makes this an impossibility right now of course. It's not even clear that even Obama's plan is political viable for that matter.

I'll take what can be passed for now and hope that in the future an increase in liberalism among the voting public with a corresponding increased liberalism in Congress will produce better reforms.

Whoa!: thumb on the scale, thumb on the scale: "...creating massive upheaval in 15 percent of the nation's jobs..."???

15% of the economy may be in medical care; not near 15% of employment is in the medical insurance industry.

It is our OTHER industries (our PRACTICAL, making something or serving someone industries) that suffer v. foreign competition (think GM) because they have to pay for workers' health care (adding $1100 to each car).

Remember the typing pool? Not if you went to work in the mid 70s by which time millions of typists had been replaced by copying machines. It's called creative destruction (the alternative is called Luddism).

How many manufacturing and other jobs are we willing to lose to keep medical insurance offices filled?

If someone can explain the political path to writing a multibillion dollar industry out of existence and creating massive upheaval in 15 percent of the nation's jobs, I'm willing to hear them out

It's fairly simple, actually. By emphasizing the de-linking of employment and insurance, you form a coalition of insureds, small, and large businesses.

he argued that it would be pretty hard to actually use bargaining power given how individual Congressfolks would protect the devices, treatments, and professions hat are powerful in their districts/states

I'm having trouble wrapping my brain around 'devices, treatments and professions' that are powerful in one place and not another. Healthcare is a service, not a manufacturing facility. New neurosurgical treatments aren't going to have a bias towards Georgia over Connecticut. They're pretty much available anywhere.

And I don't get the 'fee for service will be locked in' objection.
There are many ways you could structure a single payor system that isn't fee for service. Put all the doctors on a salary and capitate the patient payments to the hospital, regional administration, whatever. In other words....kinda Kaiser -- which is an HMO, last I checked.

Tax burden will be more than offset by lower overall costs. As for preventative care, not only would a single-payer system create incentives to improve basic health (eg, people would have a reason to notice how government subsidies affect affordability of nutritious vs unhealthy food), but better access would create incentives for people to treat problems in the early stages, thus avoiding a lot of unnecessary costs later (including loss of productivity as well as medical expenses).

flory: I'm having trouble wrapping my brain around 'devices, treatments and professions' that are powerful in one place and not another

For example, Medtronic in the Twin Cities metro area makes heart devices. One could imagine a particular medical policy question involving the relative merits of a heart device (made in Minnesota) vs. a drug (made by a company headquartered in Boston). I could see House members getting involved in that one just like with defense contracting.

As a physician, the biggest problem with single payer is that it grants the government monopsony power. When there is only one purchaser of services, that drives prices down, just as a monopoly drives prices up. If you subscribe to the "doctors are paid too much" meme, then you might view that as a feature, not a bug. But given the realities of the budgeting process and the horrible experience we've had under the Sustainable Growth Rate formula, which currently requires something like a 30% cut in physician reimbursement, the likelihood that physician compensation would plummet under single payer seems all-but-certain.

Given that many primary care offices are underwater on all medicaid and many medicare patient interactions, the trickle-down effect this would have on access to care is significant.

And flory, there certainly are regional entrenched interests. For example, healthcare giants baxter and abbot are located in suburban chicago, and would have a strong interest in ensuring their products are well-compensated by the medicare program, so their legislator might be persuaded to slip in an earmark to ensure that certain services are compensated above the norm... likely? I dunno. But not inconceivable.

better access would create incentives for people to treat problems in the early stages, thus avoiding a lot of unnecessary costs later (including loss of productivity as well as medical expenses).

More importantly, you'd remove the current short-term financial disincentives working against preventive measures.
Why should your current health plan pay for your preventive healthcare now, when Medicare will likely reap the benefits of improved health 30 years from now?

"If someone can explain the political path to writing a multibillion dollar industry out of existence and creating massive upheaval in 15 percent of the nation's jobs, I'm willing to hear them out, but until then..."

A good idea of what might happen comes from Ontario in 1990. The first ever NDP government, led by Bob Rae, promised universal, government funded auto insurance, a reform a couple provinces had already insituted. (yeah, that's Canada for you)

Anyway, the government was totally unprepared for the massive demonstrations in Ottawa calling on the government to save their jobs. The auto insurance industry mobilized thousands of employees to spike the NDP's plan.

Ontario at the time was facing it worst recession in modern history, so the idea of elminating tens of thousands of jobs, even in the name of a progressive and rational policy, seemed a lot less appealing and the NDP backed off.

Our health insurance industry represents a way bigger segment of our economy than the Ontario auto insurance industry ever did.

If we are serious about single payer, its a problem we do seriously need to think about, particulary in time of recession.

shadowfax and A: I can see your point, but I really don't see that it would be a huge problem. There would be, I think, equally powerful interests working on both sides of any purchasing/reimbursement decision that would be made. And it seems like some kind of 'best practices' regulatory scheme could be put in place to make sure those decisions were made based on empirical, clinical evidence.
And would it be any worse than the current system, in which those decisions are made by accountants and advertising agencies as much as anyone else?

And shadowfax -- as to the physician compensation question -- there really isn't any reason why a neurosurgeon should make 4 or 5 or 6 times as much as a family practioner or pediatrician. Salaried medical staff could go a long way towards making physician compensation more fair.

Reviewing the lists of pros and cons, it seems to me that single payer would likely be less expensive than something like the Edwards plan (although the list of cons includes some points that make this less than certain). What I don't see is any reason to believe that a single payer plan will provide better health care than something like the Edwards plan.

It amazes me that talk always degenerates to physician salary, when it is one of the smallest pieces of the healthcare pie. Lest you forget when you talk about salary, doctors aren't required by law to go to work. They can always do something else. If you depress salaries, you do so at your own peril. Who exactly is going to replace me if I say screw it, I'm done. Who exactly is going to sign up for 4 years and 200,000 in debt, and 3-5 years of 80 hour a week jobs for 30,000 a year. One third of physicians are over 55 and daring them to retire is not a smart thing to do when you add millions to the system. As far as a flat salary, I can tell you right now what I would do. Instead of seeing 60 patients a day, I'll show up at 9:15, see 1 patient, take a coffee break, see 1 patient, take a 2 hour lunch break, see 1, coffee break, see 1 and the minute the clock strikes 5, I'm gone. Get someone else to take call as well, I'm not. If you take away all incentive to work hard, you will reduce costs dramatically, but you might as well schedule people for their total hip in 2020 even though they might want it next month.

Jenga's right. There's no reason to expect anyone, anywhere, to do any sort of work if there given these weird "salary" things you all speak of.

jenga, perhaps the 6-figure debt upon graduation is the problem. Reduce the burden of debt, and perhaps new graduates would be more likely to pursue family medicine than the more lucrative specialties.

Also, perhaps more students would consider med school if they weren't afraid of the crushing debt they would accrue.

Rather than single payer, I would like to the states expand their health dpts. They would provide all basic, very well proven care, anybody who wants more would be free to buy more from private providers.

I agree. Complete forgiveness of loans for primary care, is a great start. I don't have a problem with neurosurgeons making alot more than family doctors. For one, its about 10 times harder to get into a neurosurgery residency, the training is 2-3 years longer and much, much more of a meat grinder. I don't fault them for doing well. No more than I fault Johan Santana making 10 million a year. I can't throw a baseball 97 mph and I can't do a crainiotomy either. Until I can, I won't complain about what either is paid.

Jenga: Poor you. It depresses me to read that, were you on salary, you couldn't possibly force yourself to see more than two patients a day.

How, then, do you explain the fact that doctors at the Mayo Clinic are salaried, and yet, somehow, they manage to give their patients world-class care?

Upheaval in that you eliminating the insurance industry, change the way billing departments are run (and the number of folks they need), change how devices are sold, etc, etc. It's a lot of disruption and all these groups know politicians.

jenga:
I didn't say anything about reducing physician compensation, I was responding to shadowfax's comments about monopsony power in a single payor system. I merely suggested that in a salaried system, there would be less reason for compensation to be skewed completely towards procedure based specialties. Which might reduce compensation in some specialties, but raise it in others, leaving the total relatively unchanged.

Neurosurgeons don't make more than family practitioners because their residency is longer or harder, they make more because our current reimbursement system rewards procedure based specialties, which are almost all surgery, by definition.

And yes -- reducing the burden of debt would be a good thing for educational opportunities of many sorts.

flory, I'm with you there. I don't know whether to laugh or cry when I read new stories about Europeans (Germans, say) protesting that student fees are going from 300E to 500E per term. (Or was that per year?)

posted earlier, but must have gotten flagged as spam. mayb ezra will release it from comment purgatory. Again, without links:

flory -- I agree entirely about leveling physician compensation between cognitive and procedure-based specialties. In fact, I have ranted on it extensively at my blog. The method of reimbursement for physician services will need to change dramatically to impact that, and there is nothing implicit in a single-payer plan which would change it.

"Salaried physicians" makes it sound like you are proposing a NHS-type system, where the docs are direct government employees, which goes far beyond the proposal currently on the table.

I'd start with icluding all preventative care in a single payer model, with the add-on suppliments available as you suggest. Putting preventative and other treatments that are not profitable now but should drive down the long term costs makes sense from a policy perspective, and the economic motivations and incentives align better that way.

What C. Diane said: you address the debt burden that pushes med-school graduates into lucrative specialization, ideally through earned loan forgiveness in primary care.

The structures are already in place within state and federal employment, and there's no reason why states can't, in essence, endow primary care positions (with federal subsidy) with accelerated forgiveness based upon location and responsibility.

I've said before that if you offer med-school graduates the chance to have money (and peace of mind) in their pockets in their late twenties and early thirties, as opposed to a mortgage's worth of debt, you'll change the face of public health.

3-5 years of 80 hour a week jobs for 30,000 a year.

I don't know where you've pulled out those numbers. Your coffee pot?

Even the NHS pays its first year junior doctors ~ £21k p.a., rising past £40k p.a. after five years. And that's with a fraction of the debt burden.

It's a lot of disruption and all these groups know politicians.

Indeed, but politicians can also promise their constituents that they'll never have to bleed on a fucking clipboard in the hospital billing office again.

pseud, I think the 3-5 years thing is talking about medical residencies. (Another aspect of medical training that keeps people out?) The stipend may be above 30K now, and I hope it varies by region, but yeah. Not much money.

Nearly 3 years ago now, the going stipend for a pharmacy residency at the VA was about 30K. I got about 34K in my pharmacy residency.

Speaking of loan forgiveness, NC has, for pharmacy at least, a certain state loan that you can get forgiven if you work in an underserved (ie rural) area. I wouldn't be too surprised if this were also available for med or nursing students.

askog,

The docs at Mayo Clinic and the like are generally paid well below their true market worth. It's awful, but the prestige that comes with high-profile academic posts generally has a trade-off of lower compensation. There are a lot of reasons for this - inefficient billing systems for academic hospitals, resident physicians, charity care, etc etc. But the upshot is that academic docs do it for reasons other than money.

But they represent a small fraction of the health care delivered in the US. The vast majority of care is provided at community hospitals and clinics, where the players are as motivated by money as anyone else in this capitalist society. Salaries do produce less productive docs, undeniably.

Oh, and Mayo, and Hopkins, and other "elite" institutions don't necessarily produce higher quality care. they do produce awesome specialty care, which is something different. If I had cholangiocarcinoma, I'd go to Hopkins. If I needed my gallbladder out, I'd stick with my largish community hospital.

NC
I lived it. It's called residency, not numbers out of a coffee pot. You forget most doctors do a residency or are you eliminating residency?

Neurosurgeons make more in part because their are a not near as many as them. Cognitive reimbursement is partially driven down because there are alot more midlevels taking care of primary care problems than PAs drilling burrholes.

Askog: How do you know I'm not giving those 2 patients a day world class care? I may give great care on salary, it doesn't mean I have to work hard or be efficient.

Jenga,

There's no volume- or market-based method of setting prices for physician payment. It's set by medicare with a committee of physician specialists, called the RUC. They set the prices, and there are way more procedure-based specialties represented there than there are cognitive-based specialties.

Or to put it another way, there are fewer endocrinologists than neurosurgeons, yet they get paid no more (possibly less) than undifferentiated internists.

blogged more extensively here:
http://tinyurl.com/2nnvdr

1. So, we should still ride horses for fear of displacing the blacksmith industry?
2. Health insurance would still exist - probably contracted to manage the single payer billing and payments as Blue Cross administers Medicare in some states.
3. Health insurance exists in Canada - offering indemnity policies for example to reduce the economic dislocation of illness.

But the big question is - if there is a giant leech on your jugular sucking your blood dry, strangling you, do you leave it there for fear of harming it.

What I keep coming back to is the question: what's the collective market capitalization of the health insurance biz? Might it not be worth a government buyout in order to end their reign over our Rube Goldberg health care system?

Jenga is right about compensation.

I am a medical student. I know a physician who works at a major academic medical center, in the cancer center. This individual specialized in a particular type of cancer, grew his program from nothing, and made it into one of the top 5 places in the United States to be treated for this condition. The volume of patients that he saw far surpassed the levels of the other cancer docs. All were paid equally on salary as part of the same department.

Because of the revenue he was generating for the hosptial, his immediate "boss" became irrelevant. He went directly to the CEO of the hospital to ask for a raise. He threatened to quit if he didn't get it, taking most of his patients with him. The CEO understood how much downstream revenue this program generated for the hospital. Highly specialized programs depend greatly on the number of patients you see. If you can say, "we did 300 heart transplants last year," that's extremely valuable. As residents can tell you, specialties are all about practice, practice, practice. The CEO and the physician agreed to a bonus based on the number of patients he saw. The bonus more than doubled the doctor's salary.

Many in the department resisted the change because "we're all in this together." They practiced medicine exactly like Dr. Jenga would if he were on salary. The bonus was offered to all physicians in the Cancer Center. Some took advantage, some chose not to see more patients and were disgruntled that they earned less than their collegues.

A very good list of pros and cons.

To simplify the physician compensation questions-- income reduction would need to be done in conjunction with education/training reform. Jenga and others are right to make the point on the difficulties of becoming a doctor-- but many of those aren't necessary. Cut out a year or two of medical school, reform residency programs and you've got a much different equation.

Also, don't confuse access to insurance with access to care.

Check out this NBER paper.

http://www.nber.org/papers/w13429

Especially striking are the figures for treatment and preventive care. They show a higher percentage of Americans than Canadians under the age of 65 getting treatment and preventive care. This is especially noteworthy, since the percentage of these Americans who are uninsured is higher than the total population because by comparing only patients "Under 65," the data excludes Americans who have Medicare.

I lived it. It's called residency, not numbers out of a coffee pot. You forget most doctors do a residency or are you eliminating residency?

Since I was quoting the British equivalent, not so much. It's a different system, of course: five years straight through undergraduate, pre- and clinical. And the doctors are employed by the NHS. But there's the knowledge of good money at the end of the road.

Still, I'm happy to take your $30k number as par for the course, mea culpa, and argue that an equivalent system to the NHS to reform residency and forgive debt is a great way to ensure that enough doctors stay in primary care.

It's Alain

I know it's not politically viable for the US right now, or for a long time, but frankly the only real solution to the underlying problems you're all discussing is to nationalize the most important 90% of the health industry like most of the rest of the Western world.

Some readers are probably reading this suggestion like I'm crazy or ignorant, but let me put it to you this way. Watching the American health care debate from the outside is like watching the citizens of a backwater post-revolution Soviet Bloc reject state bitterly fight over switching from privately insured police corporations to a model where the government just pays the mercenaries directly to respond to burglaries.

You're all in a dark place right now with this health stuff, but it looks like the US is beginning to get on the right track.

If someone can explain the political path to writing a multibillion dollar industry out of existence and creating massive upheaval in 15 percent of the nation's jobs, I'm willing to hear them out, but until then...

Shorthand?

1. End the tax-subsidy to corporations for healthcare and your mandated participation in their group pool (i.e. end the Nanny Corporation advantages).

2. Open up the Federal plan, at rates 15-20% below quality-adjusted rates, for a time.

Watch it happen, as people move to the better value plan.

3. Give companies a tax-subsidy for 'preventive care', i.e. push them up along the development curve.

4. With some government help, jump-start a re-insurance market for catastrophic and end-of-life medical risks (this will keep private insurance jobs from ending, altogether). Set-up mechanisms for private savings accounts that can fund these risks or be used as self-insurance.

Benefits: The system transforms and everyone has peace-of-mind healthcare, covering basic medical, dental, vision and major hospital.

The vexing issues of rationing care are still handled somewhat in an economic format - you have catastrophic and end-of-life protection up to what you had the vision and economic sacrifice to buy/obtain.

Ezra,

I'd love to hear you explain both the political and policy path by which you're going to expand (real) coverage and control costs in absence of a single-payer style organization of the health system, when there isn't a single nation in the world that has found any other way to do it.

Even nations that don't have explicit single-payer (e.g. Switzerland) regulate "private insurers" so much that you can't even call them that. In Switzerland, the government sets the benefits, decides what the premiums are, and reallocates the profits if one company does too well.

I'd love to hear why you think U.S. insurance companies are going to go for that any more than they're going to go for single-payer.

As for your "single payer is too much too fast" argument, I remind you that people said the same thing about Medicare, which cares for our sickest and costliest. That program went from legislation to implementation in less than a year, whereas the Jacob Hacker-style Massachusetts plan continues to stagnate years int its existence.

The post by Clarke was dead on.

None of this is new ground.
Everyone of the impediments discussed here were dealt with in Canada 4o years ago. Why are Americans trying to re-invent the wheel? Do a little research folks.

Medicare already realizes that it will have to move away from fee-for-service, or run out of money, so that's not an issue.

Medicare definitely needs reform--putting more dollars into preventive care and chronic disease management, while refusing to cover un proven cutting edge procedures. The move toward
measuring the "comparative effectiveness" of devices, drugs and prcoedure has already begun.

There's no reason why, once we have created national heatlh insurance, the plan is carved in stone. The UK
just introduced NICE (using independent panels to decide what is effective based on medical evidence) in 1999.

National Health Insurance in every developed country in the world is in the process of being reformed.

But we do need to give the NIH, Medicare, or whoever is overseeing the national plan some insulation from Congress. In the UK, for instance, NICE is funded by the govt, but once it makes a decision, it doesn't have to go back to Congress to have it approved.

NICE makes a decision, and then its recommendation is circualted too all hospitals and doctors as a guideline for best practice. About 90% implement the new guideline.

Every other country in the developed world pays less for drugs, devices and many procedures than we do. For Enthoven to say that "it would be pretty hard to actually use bargaining power (to bring down the price of drugs and devices) given how individual Congressfolks would protect the devices, treatments, and professions that are powerful" is tantamount to saying that we are simply more corrupt than any other developed nation--and always will be. I don't accept that.

It reminds me of people who said that we couldn't abolish slavery in the U.S.--after it had been abolished in England--because America is "different."

Enthoven is also saying that campaign finance reform is impossible, and that Medicare cannot do what the VA did--stand up to Congress and insist on bartering for discounts.

Finally, on the French system: the French are willing to pay very high taxes for the baseline care that is available to everyone because the French feel that nothing is too good for another Frenchman.

Unfortuantely, Americans don't feel that way about each other. Lack of solidarity is a huge obstacle.

So I'd be afraid the baseline care would be like Medicaid, "a poor program for the poor."

That said, I don't see trying to go directly to single-payer. Politically, it
s impossible. Most people like the employer-based insurance they have now and they don't want to change.

So the reform plans that let tightly regulated private insurers compete against a public sector plan on a level playing field (guaranteed issue, no cherry-picking) seems the best way to go.

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