Very good article, and outlines how our heathcare system is most assuredly NOT a functioning free market one, contrary to many who have no idea how it really works.
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America’s health-care system remains dysfunctional, but it could be made better
IT IS now nearly a year since the roll-out of Obamacare. The launch was a shambles, and Obamacare is a totem for every American who hates big government. Republicans will deride it, yet again, in the mid-term elections.
Obamacare is indeed costly and overcomplicated. Yet it is not to blame for America’s health mess, and it could just contain the beginnings of a partial solution to it. But that will only happen if politicians treat health care like a patient: first, diagnose the disease, then examine whether Barack Obama’s treatment helped, and then ask what will make the patient better.
Begin with the disease. At the core of America’s problems with health care is a great delusion: it likes to think it has a vibrant private marketplace. In fact the country has long had a subsidy-laden system that is the most expensive and complicated in the world, with much of the government cash going to the rich, millions of people left out and little individual responsibility.
America devotes 17% of GDP to health care, compared with 9% in Britain, yet nearly 50m Americans were uninsured in 2012 and life expectancy is slightly below average for a rich country. And the taxpayer foots much of the bill: government health spending per head in 2012, before Obamacare’s main provisions took effect, was 50% higher than in Britain, which has a nationalised health system. Some spending, such as the huge Medicare programme for the elderly and Medicaid for the hard-up, is obvious. But much is opaque.
Employer-sponsored coverage is tax exempt, costing the government at least $200 billion a year. These subsidies fuel health-care inflation and favour rich employees, who would pay higher taxes if they were compensated with wages alone. Just as bad, roughly half the population finds that their health insurance is tied to a job; this makes it harder for them to switch employers. Rising premiums come out of wages; health-care inflation is one of the main reasons why pay for the average American has stagnated. Meanwhile many of the uninsured are free-riders: young people who do not buy insurance but rely on costly emergency rooms if something awful happens.
The system seems designed to encourage waste. Doctors are often paid for every test or invasive procedure, rather than for keeping patients well. Patients don’t know what anything costs, and the bill will in any case be settled by a third party, so they don’t haggle. Prices can be sky-high and vary wildly. A mammogram in New York may be less than $100 or more than $1,700. No matter what the Republicans say, this is not a free market in any normal sense. But what about the treatment?
Ironically the “socialist” Mr Obama did not do the one thing that might have cut taxpayers’ costs dramatically: introduce a European “single payer” health-care system (with ideally some small treatment user fees to deter overuse). Instead he tried to tweak America’s system in two ways—to expand coverage and to reduce costs. So Medicaid now covers the not-very-well-off as well as the truly poor (at least, in Democratic states), and Obamacare bans insurers from charging sick people higher premiums. To expand insurers’ pool of patients and keep costs down, it required Americans to buy insurance or pay a penalty. To make insurance-buying easier, Mr Obama introduced online exchanges where people can shop for a health plan, and offered subsidies to those who cannot afford one.
The results are mixed. Practically every competent health-industry lobbyist managed to insert a line protecting the services his paymasters provide—so Obamacare is too costly and too complicated, but it is doing a little better than it is given credit for (see article). The share of uninsured 18-64-year-olds has fallen from 18.5% in the second quarter of 2013 to 13.9% in the second quarter of 2014 according to a survey. This is probably due mostly to the expansion of publicly funded Medicaid, rather than people flocking to the Obamacare exchanges, on which people buy their own insurance. Encouragingly, health-care inflation has also fallen back, though that may largely be because of a weak economy.
So what would make American health care better now? Since its failings lie more within the system than with the president’s attempt to reform it, health reformers should concentrate on three areas that could make its flawed market work better: directing handouts towards the poor rather than the affluent, nudging individuals to take charge of their own health care, and making sure that prices are transparent.
Injecting the right people
For a start, Congress should move towards scrapping both the tax break for employer-provided health insurance and the requirement that firms offer it. Those savings could be used to help cover subsidies for the poor. Without the tax distortion, employers would pay higher wages instead of benefits and workers would shop around for the best value health plans.
That is already beginning to happen. Flawed though they are, Obamacare’s exchanges could be the foundation of a new model. Employers are already making employees pay more of their own individual health costs upfront. A worker who has to pay the first $1,000 of his annual bills out of his own pocket is far more likely to shop around. And as patients become more like consumers, health-care providers are improving their game (see article). Walmart and other retailers are selling basic medical services more cheaply and outside usual hours.
Reform will work only if prices are transparent. This is where an rust and other compe ion authorities could come in. Cosy deals between hospitals and insurers that suppress price information should be barred. The government should release more data on the price and quality of doctors. In April it published doctors’ charges for treating elderly patients, but largely withheld the most useful information, such as data showing doctors’ treatment of specific patients over time.
Obamacare’s effects will not be fully understood for years; but it will never be the core of the problem. If America wants to stick to the idea that it has a health-care market, then it should focus on trying to make it more like a market—with prices, compe ors and some form of choice.
http://www.economist.com/news/leader...better-how-fix
Who is or was calling it a functioning free market?Very good article, and outlines how our heathcare system is most assuredly NOT a functioning free market one, contrary to many who have no idea how it really works.
lol Obamacare "might possibly contain the beginnings of a partial fix" for the healthcare system.
Why so cynical? Would that be a good thing?
No it's not a good thing that the best that can be said about Obamacare is "might possibly contain the beginnings of a partial fix"
First of all, throw out cost as anything approaching a meaningful metric. Nobody factors cost correctly and nobody can due to the opacity of cost here and elsewhere. cost. If the outcome is better (the only metric that matters) and the cost is even remotely close to today's cost, it's a ing win.
You're such a hack.
There's a lot of good with Obamacare, but also a lot that needs fixing.
Since I could probably write an 800 page book, I'll shorten it to bullet points.
Good:
1. Starts a move away from employer sponsored coverage. Not to say employers don't or shouldn't give employees extra money for employee benefits, but the idea that employers choose a one-size fits all policy for all employees makes little sense to me. It's equivalent to getting auto and home insurance from our employer. Just weird.
2. Since there's an individual mandate, employees are starting to take ownership in the policies they receive.
3. No one can be denied coverage
4. Subsidies, as imperfect as they are, do help lower income folks afford coverage.
Bad.
1. The employer mandate hurts working class employees. Huge penalty and it's equivalent to bending hard working folks over. If you want to know more about this let me know and I'lll explain.
2. The employer mandate incentives ty coverage. IRS and HHS know this, but can't do anything about it without putting people out of business.
3. Young people bear this biggest financial burden. Young people have the least amount of money and are now have a disproportionate amount of the financial responsibility on their shoulders. Not sure how they are suppossed to pay for college, save for retirement and be charitable at the same time.
4. The formula for unaffordable coverage is F'd up big time. The formula only considers the employees portion and not the spouse and dependent coverage which is the most expensive part.
5. HealthCare.gov is staffed with unqualified representatives and the system is going probably going to melt down during the next open enrollment.
6. It's too political. Democrats need to know most employers really want to help and care for their employees, while most Republicans need to get their heads out of their asses and work to make this law better for working class people.
supply and demand fail. Economics 101: Scarcity exists. Just because you don't like simple math doesn't mean it goes away.
wow, so ing stupid.
Health care cost is driven by the capitalist/investor requirement for unending, increasing profit, which is served, as with the criminal, predatory financial industry, enabled by hyper-complexity and total opacity.
The only metric that matter is universal access to health care AT COST COMPARABLE to other industrial countries' costs.
Health-industry-financed Baucus didn't even mention govt insurance/public option because he and the health insurance executive/lobbyist he hired to write ACA absolutely had to protect/increase health industry profits. Without those profits built into ACA, the health care industry would have aborted ("Harry and Louise-d")ACA.
American health care won't be fixed for DECADES, if ever, and is a major reason AMERICA IS ED AND UN ABE, and a major reason why Americans hit 65 with little or no ac ulate wealth.
The flattening of household income since 1980, the year the VRWC got is Useful Idiot and his VRWC hitmen elected, co-incides perfectly with the explosion of health care costs, so that health insurance for a family of 4 is $15K/year.
http://mobile.nytimes.com/2014/09/25...ills.html?_r=0
http://mobile.nytimes.com/2014/09/19...ealth-act.html
http://mobile.nytimes.com/2014/09/25...ort-finds.html
http://www.nytimes.com/2014/09/21/us...cal-bills.html
Wow so ing stupid. Go ahead and compare our cost vs outcome to other countries...or try to. You can't, accurately but go ahead and try then whine some more about costs you don't even begin to see. ing moron.
Still saying what your echo chamber tells you too.
TBREALLY pissed when slapped!
Boutons
Still waiting on you to cut and paste some asinine cost analysis from your moonbat feed you cant be bothered to read.
Obamacare is a ty bill. Trying to spin it as a good start is being a hack.
ACA was handicapped from the start by facing a horribly complex, for-profit, entrenched, powerful wealth-sucking health care system. That it got passed and helped millions and is saving $Bs is ing miraculous.
and of course, you and the rest of your ilk have no suggestions.
You LIE!
A bit simplistic. Cost always matters.
That said I agree in principle.
Pretty much. Wish I had the time to give this a good response. As it is... gotta get going.
Good Judgment Project has been taking up a lot of my available time.
Fixing ACA is pretty much impossible, a fool's errand, even if improvements are made (will be blocked by the Repugs. A judge today ruled the subsidies illegal, and the SCOTUS5 will probably concur or let it stand. Always trust the Repugs to everything up), because of its context of for-profit health care providers and insurers.
some things are changing, but hardly for everybody, and for-profit health care is present:
New types of health care delivery are improving the 'patient experience'
http://www.publicintegrity.org/2014/...est+Stories%29
you trust that site
that site is worse then cnn or fox news
but as typical right winger, you have NO comment on Wendell Potter's article or how Boeing is cutting out health insurer? GFY
DUCKS!
Long time no see.
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