Among the major issues not discussed in the U.S. presidential campaign are those facing the U.S. health care system. Two major concerns are well known.
One is the high cost. According to the OECD, the U.S. economy will spend about $12,500 per person on health care in 2022. The second and third highest countries, Switzerland and Germany, spend about $8,000 per person on health care. The price per person in Canada is about $6,300, which is about half the level in the United States. The UK is even lower at $5,600 per person. I am not in favor of cutting American healthcare spending by more than half! However, high and increasing health care costs for government programs such as Medicare and Medicaid are part of the factor predicting a U.S. budget deficit. And for people who get health insurance through their employer, higher wages also become more difficult because health insurance costs are high and rising.
Another major concern is the number of people without access to health insurance. Census Bureau Statistics By 2023, 11% of working-age Americans (ages 19 to 64) and approximately 6% of children will not have health insurance. Many of these households fall through the cracks of the current system. If you have health insurance, you have enough income to not qualify for Medicaid, but not enough to make paying for health insurance seem affordable. About half of the uninsured can actually sign up for health insurance for free, either private or public, but the knowledge is lacking and the administrative burden of applying is too great.
So what should we do? summer 2024 Journal of Policy Analysis and Management There’s some useful back and forth that identifies some possibilities, problems, and pros and cons. Meanwhile, Liran Einav and Amy Finkelstein outlined their arguments in a book they published last year in 2023, laying out their plan: We’re here to help: Reboot American Health Care. But redesigning the U.S. health care system would require a huge leap forward, and as they acknowledge, their plan may be politically impractical. So Jason Furman discusses the possibilities for more gradual, but still potentially important, health care reform. Here is a link to the points/counterpoints:
The Einav and Finkelstein plan focuses on the idea of providing a free, basic level of health care to all Americans. They argue that when other countries include out-of-pocket cost-sharing for patients, such as copayments, coinsurance, or deductibles, rich and often complex exceptions arise, such as for pregnant women. , veterans, unemployed, low-income people, etc. Rather than create what could easily become an administrative swamp for cost sharing, we would abandon the idea of this basic level of care. They argue that “sharing universal reporting is itself on a collision course.”
What does this basic level of care include? Linav and Finkelstein get a little vague here and start talking about a “gray area.”
Basic coverage should cover all essential health care, including primary care, preventive care, specialty care, and hospital care, both emergency and non-emergency. What this means is mostly obvious. Includes flu shot and appendectomy. Purely cosmetic plastic surgery has emerged. However, there is a large gray area regarding certain types of care that may be excluded or included in basic care. Infertility treatment, dental care, eye care, physical therapy, erectile dysfunction treatment, various forms of long-term care, the list goes on. We intentionally put no weight here, other than that our starting point is to define the budget for basic care, i.e. how much taxpayer money we are willing to give to health care. Only then can we have meaningful discussions about these gray area decisions. … [M]Most countries have formal processes for considering whether to cover new treatments under universal health care. We need one too.
In addition to the question of what to cover, there is also the question of how to cover it. The social contract is not about providing luxury experiences, but about providing essential health care. There are many non-medical aspects of treatment that may be desirable, although not essential. For example, this is a feature that allows you to meet the doctor you want at the time and place you want, such as in a semi-private hospital room. This is effectively limited under basic coverage. Likewise, basic coverage would involve longer wait times for non-urgent care than what people with private health insurance or Medicare are currently accustomed to. Wait times will be closer to those experienced by Medicaid patients or veterans receiving health care through the Department of Veterans Affairs (VA).
So Einav-Finkelstein’s vision is that everyone will get their primary care through the same system, but perhaps two-thirds of Americans will have supplemental insurance on top of that. In other words, employer-provided health insurance allows you to pay a portion of your premiums to the government for basic health care and transfer the remaining premiums to supplemental coverage.
They argue that we can “fulfill our social contract without solving another trillion-dollar problem: high and often inefficient health care spending.” … This is fortunate because there is no silver bullet (yet) that will dramatically lower health care costs while fulfilling the “do no harm” mandate to patients. Also, we hasten to add,
other. Despite what you heard on TV. It is indisputable that there is a lot of waste in American health care. But the old adage about advertising is also true. “Half of our spending is wasted, and we don’t know which half is wasted.”
Jason Furman was President Obama’s top economic adviser and supporter of the Patient Protection and Affordable Care Act of 2009. The bill would reduce the number of people without health insurance by about 22 million at a cost of more than $100 billion annually. But one of the bill’s political advantages is that for many (but not all!) people with private or government health insurance, the way they manage their health was not significantly changed by the bill.
As Furman points out, it is easier to generalize about “basic care” than to define it in detail. It is difficult to imagine a politically viable “primary care” system that includes less than Medicaid. Medicaid already pays so low that many health care providers refuse to treat additional patients. How “basic” can be “basic”? And are Americans willing to tolerate “the basics”? Furman says:
As Einav and Finkelstein discuss at length, much of what the health care system provides is “amenities” that cost money and resources but do not contribute to better health outcomes. This distinction between primary purpose and amenities is rarely made in other areas. For example, imagine a management consultant studying the $150 billion spent annually on hotel rooms in the United States. They can conclude that about $125 billion of that money was wasted because hostels could provide the same shelter with beds, toilets and showers at a much lower cost. But this recommendation misses the point.
Furman argues for cost sharing when it comes to health care costs on the grounds that it should have some connection to what people actually pay for their health care. About trade-offs. He wrote: “Health care financing is already so opaque that a typical family of four spends about $32,000 a year, but they probably only notice about $3,000 they pay out of pocket or about $6,000 they contribute to plan premiums. The remaining money is in the form of unpaid wages (employer contributions to health insurance) and taxes on health care.”
He notes that some form of cost-sharing for health care costs is common in other countries. In fact, existing levels of health care cost sharing as a share of household consumption expenditures are actually not very different in the United States than in many other countries.
Furman wrote:
One thing I learned while working at ACA [Affordable Care Act] The problem is that no one has all or most of the answers, especially when it comes to delivery system reform. The answer is not simply to assume, but to think more seriously about how to put systems and processes in place that will allow us to find better answers over time. We know in advance whether it is politically and socially sustainable, let alone whether it is sustainable. …
However, it is also wrong to ignore the errors of the government or the people who implement its policies. Medicare is a poorly designed insurance plan that does not even qualify for insurance under ACA regulations due to its unlimited cost-sharing (even though it has dollar-for-dollar coverage for many services), making it essentially unusable as a stand-alone insurance plan. % of beneficiaries
It’s about supplementing it with something else. It took the federal government decades to add prescription drug coverage to Medicare. This omission caused private insurers to go out of business. And even when government plans have become cheaper, such as prescription drug benefits, they have been largely driven by innovations that the authors of those plans did not anticipate or underestimate, such as tiered formularies for prescription drugs.I don’t know the answer, but it needs to incorporate some of the best aspects of the market and fix the worst. Centers for Medicare and Medicaid Innovation. And the most vexing problem in healthcare is how to balance costs with the many other needs and priorities people have. Mechanisms that make costs and trade-offs more transparent are therefore essential to ensure that competition and innovation processes lead to better outcomes over time.
There is also no one-size-fits-all answer to how to fix the American health care system. But I think it’s important for people to better understand what health insurance really costs. one suggestion Congressional Budget Office Cost Estimates The idea is to look at the range of health insurance offered by employers across employers to determine the median amount they offer. CBO estimates “$8,900 per year for individual coverage and $21,600 per year for family coverage.” That intermediate amount will continue to be excluded from taxation. However, for health insurance plans that cost more than this amount, the additional amount is counted toward the worker’s income. CBO estimates that this will raise more than $100 billion annually by 2027.
