If America adopts Canada's health care system

[a_majoor]

Vermont discovers that "Canadian Style" single payer health care is simply too expensive to sustain:

http://www.bloombergview.com/articles/2014-12-23/vermonts-lessons-for-fans-of-singlepayer-health-care

If Single Payer Can't Work in Vermont...
1436 DEC 23, 2014 1:07 PM EST
By Megan McArdle

While I was away last week, Vermont decided to scuttle its single-payer health-care plans. I predicted as much six months ago, for one simple reason: A single-payer system would cost too much. When faced with the choice of imposing double-digit payroll taxes or dropping his cherished single-payer plan, the governor of Vermont blinked.

"But Megan!" I hear you cry. "Single-payer systems are cheaper, not more expensive! Look at Europe!"

Alas, however, as I wrote at the time, there is nothing about single payer that will magically allow us to cut costs to European levels. People who believed otherwise were substituting a crude eyeballing of international statistics to substitute for reasoned analysis, in part because it told them what they wanted to be true: that they could have the universality and progressiveness of a single-payer system without having to ask the taxpayer for a giant heap of money to provide those benefits. They were, in the words of one of my favorite public-policy professors, "getting high on their own supply."

Now, I know what you are preparing to say: I am allowing my ideological priors to blind me to the plain evidence in front of my nose. So let me explain. I concede that single-payer systems may well allow you to control the rate of health-care cost growth, thanks to government price controls on supplies and services, along with rationing or denial of expensive treatments. What it doesn't allow you to do is easily cut the rate of health-care spending. None of the single-payer systems that are frequently held up as models for the U.S. have ever managed sustained cuts in health-care spending. All they've done is prevent it from growing so fast.

The problem, as I wrote previously, is that America doesn't have a health-care cost-growth problem; we had a health-care cost-growth problem. Right now, our health-care cost growth is right in the middle of the OECD pack:

Our spending is indeed high compared with the rest of the world, but that's because it started high. And while restraining government spending is easy, it is a walk in the proverbial (government-funded) park compared to actually cutting spending. Cutting spending means that a number of people are going to lose income and employment. They will have trouble paying their mortgages, car loans and little Johnny's bill for travel soccer. Then they are going to get organized and march on Washington and vote against the politicians who cut their jobs.

Path dependence is a running theme around here, and in no other area of public policy is it more troublesome. Health-care jobs are steady and well-remunerated compared to whatever else those workers could be doing. And that's not just true of the much-derided "specialists" who do too many procedures and charge too much; it's true of everyone in your hospital and doctor's office, from your beloved family physician to the woman who draws your blood. All those people have spent long years working to get where they are. If you suddenly change the rules and take that all away, their rage will burn with the righteous fire of a thousand suns.

So even if we could have had a much cheaper health-care system if we moved to single payer in 1970, that doesn't mean that we can get the same happy results by doing so now. Today we'd be building a single-payer system with the price schedule of our current health-care workers. Which means it would cost an absolutely breathtaking amount of taxpayer money, as Vermont just found out.

Oh, Vermont has some special problems -- a small state loses some of the ability to rationalize the system that the federal government would have because it has to deal with border issues, such as commuters and what to do about a Vermont citizen who has to get treatment in a New Hampshire hospital. But that doesn't seem to have been the biggest problem Vermont faced. Mostly, it faced the impossible choice between cutting provider incomes by a lot or raising taxes to nosebleed levels.

This holds a lesson for all the folks who hoped or feared that Obamacare was a stalking horse for single payer. It's not. First, because if you try to take away the current system from the vast majority of folks who had health insurance they liked before the Affordable Care Act was passed, your voter base will get hopping mad enough to enter low-earth orbit. And second of all, even if you're willing to brook their rage over the loss of their health insurance, combining that with a whopping great tax hike on the middle class is a recipe for political suicide.

The U.S. health-care system may be all kinds of screwed up. But at least at this late date, single payer is not the cure for what ails it.

The other factor which the author overlooks is that many health care systems are not transparent i.e. you (the consumer) have no idea what the actual costs of medical goods and services are. Systems where the consumer is an active participant in the market and has good quality price data do keep costs down.

 

[a_majoor]

Pricing data for cancer drugs is coming on line, and the effects of developing a market mechanism are expected to be startling in both the cost and quality fo healthcare. This is the sort of thing that Canada needs to bring our health care costs under some sort of control:

http://www.the-american-interest.com/2015/06/24/bringing-healthcare-into-the-21st-century/

Bringing Healthcare into the 21st Century

Price transparency is coming to cancer drugs. The New York Times reports that the American Society of Clinical Oncology is working on a “‘value framework'” system to make both the cost, including out-of-pocket costs to the patient, and the effectiveness of drugs more accessible:

“The reality is that many patients don’t get this information from their doctors and many doctors don’t have the information they need to talk with their patients about costs,” Dr. Richard Schilsky, chief medical officer of the oncology society, said in a news conference on Monday […]

Some of the sample valuations presented by the society were far from flattering for the drugs involved.

Roche’s Avastin, when added to chemotherapy, had a net health benefit of 16 out of 130 possible points when used as an initial treatment for advanced lung cancer. Its monthly cost was $11,907.87, compared to $182.09 for the chemotherapy alone.

Eli Lilly’s Alimta for that same use had a net heath benefit of zero with a cost exceeding $9,000 a month compared to about $800 a month for the drugs it was compared to in the clinical trial.

When patients get more information about the price of their care, they can make smarter choices about which treatments, procedures, and drugs they want to use. And studies show that when they are given that information, they often choose the cheaper option, lowering costs for themselves and throughout the system. It shouldn’t be so difficult for consumers to access this information, and we find it encouraging to see a medical society working to fix that in its own field. Price transparency won’t fix U.S. health care on its own, but it could help. It can’t come fast enough.

 

[cupper]

There was an interesting discussion yesterday on NPR regarding the cost of newer drugs for treating the more difficult illnesses such as AIDS and Hep C.

http://www.npr.org/2015/06/24/417045119/calif-health-officials-aid-people-facing-astronomic-drug-bills

They focused specifically on the Hep C drug, and how the significant cost for treatment to cure the disease is prohibitive for most. And how it can jack the cost for government drug programs to astronomical levels. For the Hep C drug a round of treatment runs around $1000 per pill, and a full course could cost $140,000.

The argument for having drugs like these covered is that the alternatives are drug cocktails that are not as effective, and only limit or slow down the progression, or treat symptoms not the underlying illness, and may require the patient to go on the cocktails for long term or lifetime. And the long term effects of the diseases such a organ damage or failure could potentially cost far more than the more expensive drug. The one caveat being that there is a certain population for which these drugs are ineffective as well, as was the case for the person in the interview.

 

[Brad Sallows]

My usual question still stands: if $X per year is an amount we are willing to pay to cure someone or keep him alive for one year, should that not be the benchmark minimum for any person with any ailment?

 

[cupper]

My usual question still stands: if $X per year is an amount we are willing to pay to cure someone or keep him alive for one year, should that not be the benchmark minimum for any person with any ailment?

No specifically, No. It comes down to a cost-benefit analysis of the various scenarios, and getting an acceptable outcome for the least expense. And the insurance companies here love to make it as difficult as possible to get to that outcome.

For example, if you suffer from gastric reflux, your doctor can't just prescribe the best thing on the market. You need to try the least expensive option first. Then the move to the next one if that doesn't work, and so on. Step Therapy as it is known. Which is understandable to a certain degree. However, if you have already used that medication before and know it works, you need to provide your insurance company documentation and appeal the decision and could wait days or weeks before you get the medication you need. This happened to me twice. The first time it took 6 months before I finally got on a med that worked because the insurance company insisted on step therapy, and 3 months on each drug before they finally allowed the more expensive drug, which was the only effective treatment for me for what I was dealing with. I knew it was the only effective one available because I was given the same med when I was living in Canada. Then 3 years later the same ailment came up, but because I had a new insurance provider, they required the same process to be followed. This time it took a week to get the correct meds, but we had to jump thorough many hoops and submit records and documents to get it. 

 

[Brad Sallows]

I expressed myself too vaguely.

Basically, if we have a bunch of people in hand with completely different requirements and an upper bound determined by the cost of the most expensive course of treatment covered, I'd like the guiding principle to be that every treatment costing less is also covered - certainly every more necessary treatment.

 

[cupper]

One problem with that is insurance companies will still be able to set different levels as to how much each medication is covered.

Most plans down here are based on a tiered system. You typically have 3 tiers - generics - preferred (lower cost brand names) - and non-preferred (higher cost brand names or newly released meds / drug combos), and each tier has a separate rate of coverage or copay. Sometimes you have a 4th tier where high cost specialized drugs for things like cancer treatment, HIV, Hep C and so on.

The insurance company may set coverage limits based on that upper bound, but then set the out of pocket cost to you at a rate that would still make it prohibitive, or incentivizing lower cost generics over more effective brand names.

 

[fullflavor]

One psychiatric counselling visit is charged $40 dollars each at the expense of the government. Imagine the taxes that the government can generate if a rich patient can pay $200 to $300 with or without his health care insurance under two-tier. A two-tier health care system does not mean that counselling would be denied to a poor patient. That is why it is called two-tier to serve both the 'rich (word repeated 40 times in the Quran, Bible and Torah) and the "poor" (word repeated 200 times in the Quran, Bible, and Torah). The problem lies on how the (moles) of the Conservative and Liberal governments aggravate the situation by denying them to the poor or charging them enormous amount of monies under the so-called 'austerity programs to discredit the Harper government'. No wonder we are 1 trillion in debt! Economic sabotage is not a long gone concept.

 

[DBA]

My usual question still stands: if $X per year is an amount we are willing to pay to cure someone or keep him alive for one year, should that not be the benchmark minimum for any person with any ailment?

I am not sure if your trolling or think this would work.

There is no infinite pile of money - costs have to be kept down or it will run out. That some very expensive treatments can be provided for those in dire need of them is precisely because the majority can be treated less expensively.

An example would be having an infection for which an antibiotic is prescribed. Those allergic to Penicillin would usually get treated with an alternative that costs more while the majority get Penicillin. Without a medical need for the more expensive treatment providing it is just wasting money that could be used in situations where a more expensive treatment is medically neccessary.

 

[mariomike]

Don't know if this is legit or not, but I thought it was funny,

Man celebrating vote to repeal Obamacare learns he is on Obamacare.
http://imgur.com/gallery/rWIhcx6

 

[cupper]

It's not legit. Nothing has been voted on, and the GOP suddenly came to the realization that if they repeal it, they own whatever they replace it with.

And they are also getting pushback within their own ranks about repealing without having an acceptable plan to replace it at the same time.

To get anything through as a replacement will take 60 votes in the Senate. Which means they would have to convince 8 Democrates to vote with them. Can you say "Snowball's chance in hell" ?

 

[Blackadder1916]

It's not legit. Nothing has been voted on, and the GOP suddenly came to the realization that if they repeal it, they own whatever they replace it with.

And they are also getting pushback within their own ranks about repealing without having an acceptable plan to replace it at the same time.

To get anything through as a replacement will take 60 votes in the Senate. Which means they would have to convince 8 Democrates to vote with them. Can you say "Snowball's chance in hell" ?

Whether the Facebook(?) thread shown in the screen-grab is a legitimate exchange or made up to highlight the idiocy of many voters is another matter.  It wouldn't surprise me either way.  As for the need for sixty votes, that is the vote the possible idiot(?) is celebrating, the first stage in the Republicans' path to essentially overturning the Affordable Care Act - making use of Senate rules so that they can get their way.  It is better explained here.

http://www.vox.com/policy-and-politics/2017/1/9/14213702/senate-obamacare-repeal-budget-resolution

The Senate is voting to make sure 51 votes, not 60, will be necessary to pass Obamacare repeal

Most ordinary bills in the Senate can be filibustered. It takes 60 senators to overcome a filibuster and advance a bill, and since there are only 52 Republican senators this year, that means Democrats can block the vast majority of bills if GOP leaders can’t win their cooperation.

There’s one loophole to that numbers game, and it’s called budget reconciliation. According to Senate rules, bills specially set up for budget reconciliation cannot be filibustered — that is, they can be advanced through the chamber with just 51 votes (one of which could be a tie-breaking vote from Vice President Mike Pence). This provision was generally intended to make it easier for Congress to reduce the deficit, though in recent years it has sometimes been used instead to increase the deficit — check out Dylan Matthews’s explainer on how it works.

Naturally, Republicans want to make sure their Obamacare repeal bill can be passed with budget reconciliation, since that’s the only way they can pass something without Democratic support. (There is the thorny problem that, under Senate rules, certain parts of Obamacare can’t be repealed through reconciliation because they don’t affect government spending or revenue. But the heart of the law — its spending on coverage expansion — is vulnerable.)

If Congress wants to use budget reconciliation, though, it has to jump through a few procedural hoops first. Specifically, it has to pass a budget resolution. That’s what the Senate is working on this week.

 

[cupper]

Whether the Facebook(?) thread shown in the screen-grab is a legitimate exchange or made up to highlight the idiocy of many voters is another matter.  It wouldn't surprise me either way.  As for the need for sixty votes, that is the vote the possible idiot(?) is celebrating, the first stage in the Republicans' path to essentially overturning the Affordable Care Act - making use of Senate rules so that they can get their way.  It is better explained here.

http://www.vox.com/policy-and-politics/2017/1/9/14213702/senate-obamacare-repeal-budget-resolution

But as I pointed out, It will take 60 votes to pass any proposed replacement. The repeal is inserted in a budget bill which arcane rules allow only a simple majority to pass under the reconciliation rules. But the replacement cannot be introduced under that process, so it can be filibustered indefinitely.

And the current mood is that they need to have a replacement ready to go at the same time. No delay between repeal and replace.

 

[a_majoor]

Which is rather ridiculous. The market has already developed several work around solutions for people who lost their doctors and healthcare plans under Obamacare, and allowing market mechanisms to operate is the only way to bring costs down. For the most part, the reason costs are astronomical are the extra requirements inserted by the government (such as transferring patient data to electronic formats), interference in the insurance market (people were constrained to buy insurance from companies in State, hence each company has a much smaller pool and each customer has a more restricted number of providers to choose from. So making the insurance market truly "national" will also provide more competition and choices.

The other issue which distorts the market and makes it difficult to control costs is the market isn't transparent. Few patients know the costs of their treatments, Medicare and Medicaid distort the prices and of course without tort reform, doctors are pretty much forced to order every test imaginable to cover their butts in case of malpractice suits. Opening the market (such as with "cash and carry" Doctors) can do wonders when people can "shop around" for the best prices for routine care, and the best prices for "catastrophic" insurance coverage.

 

[The Bread Guy]

... For the most part, the reason costs are astronomical are the extra requirements inserted by the government (such as transferring patient data to electronic formats) ...

Also, because the private sector would ever take advantage of increased demand via a mandatory requirement for coverage by jacking up prices, right?  Sort of like gas prices going up over long weekends?