American? Voting age?

Then please do yourself and your family a favor and read this piece by T.R. Reid on how health care in the rest of the world actually works (hint: better, cheaper, faster).

It distresses me that our health-care debate has been launched from false premises and has deteriorated from there. We cannot ignore the ongoing harm being done, cannot deny that others are doing it better (across the board), and must not succumb to the false equivalencies and misdirections being vacuously peddled. Now is the time to arm yourself against the tragedy of ideology with real, observable facts.


  1. Posted August 25, 2009 at 8:48 pm | Permalink

    If you like this piece, you may also like T.R. Reid’s documentary “Sick Around the World”: and a follow-up interview with Charlie Rose: Unfortunately, no amount of facts will persuade those opposing the reform, because the majority do so based on ideology, and ideology does not care about facts.

  2. Posted August 25, 2009 at 10:47 pm | Permalink

    Great article. That is not only true of health care. Seems like the US have a severe case of not invented here.

  3. Thomas
    Posted August 26, 2009 at 3:59 am | Permalink

    You want real, observable facts? Here are real facts, observed by someone who actually lives in Germany for 36 years, unlike the author of the article who nonetheless makes bold claims about the German health-care system (which, by the way, is the model of Obama’s health-care reforms):

    (1) “But many wealthy countries — including Germany, the Netherlands, Japan and Switzerland — provide universal coverage using private doctors, private hospitals and private insurance plans.”

    Not so. At my age, a private insurance plan amounts to no less than 300 EUR/month (adjusted, that’s more than 400 USD/month, and growing with every life-year), and only wealthy people plus government officials and self-employed/management employees can afford such a plan. If, however, you have a public insurance plan (95% of the insured German population), you are restricted to which doctors and hospitals you can visit, and even then there is a quota which, after it’s been used up (typically around July every year), doctors will refuse to give you certain treatments because government won’t compensate the doctors because of the quota.

    (2) “In Germany, Switzerland and the Netherlands, seniors stick with private insurance plans for life.”

    In Germany, once you leave the public plan and opt for private insurance, you CAN’T go back to public insurance (some backdoors remain for those who accept a low-wage job for 6 months, which is not an option for seniors), which, for a typical German senior, leaves you with private plans that amount to more than 800 EUR/month due to progression with age – out of your own pocket.

    (3) “Germans can sign up for any of the nation’s 200 private health insurance plans — a broader choice than any American has.”

    That’s simply because, due to recent government intervention into the market, all plans are now required to cover the same options, i.e. they are all the same. In the words of Henry Ford, “You can pick any color for our T model, as long as it’s black.”

    (4) “If a German doesn’t like her insurance company, she can switch to another, with no increase in premium.”

    Not true. For one, there is a lock-in/-out period of 3 months. Second, once you leave a public plan for a private one you can’t go back. Three, after age 32 the private plan is almost always more expensive than the public one. As for public plans, they are all the same, i.e. expensive, confiscatory, and there is a government-mandated set of treatments that they cover – and don’t cover.

    At this point I’d like to stress that unlike the fantasies that some in the US entertain, health insurance in Germany is NOT FREE (as in beer). Instead, there is mandatory payment that amounts to a typical 500 EUR/month (adjusted to about 600 USD/month), shared between employer and employee, and the 250 EUR/month part of the employee is automagically confiscated by government (i.e. the German IRS-equivalent) from your monthly paycheck.

    Just because you don’t write a check every month doesn’t mean that it’s free. It’s invisible.

    (5) “In Austria and Germany, if a doctor diagnoses a person as “stressed,” medical insurance pays for weekends at a health spa.”

    That’s a fantasy. Back to reality: with a public plan (remember, 95% of insured Germans) you get 1 week of spa for every 5 years of employment, and only if yoy have actual physical symptoms, not psychical.

    (6) “But studies by the Commonwealth Fund and others report that many nations — Germany, Britain, Austria — outperform the United States on measures such as waiting times for appointments and for elective surgeries.”

    That is only correct in the sense that for general, low-cost surgeries appointments are indeed quickly available in Germany. However, the vast number of surgeries from those studies are not available in German under public plans, i.e. either you pay out of your own pocket, or you don’t get it at all.

    (7) “Foreign health insurance companies, in contrast, must accept all applicants, and they can’t cancel as long as you pay your premiums. The plans are required to pay any claim submitted by a doctor or hospital (or health spa), usually within tight time limits.”

    Not true in Germay. Insurance companies can refuse to accept members even on grounds of genetic defects from your DNA sample. Also, typically you only get back 80% of the bill, you pay up-front, the time limit for payment is anywhere from 4-8 weeks, and indeed companies pay every bill – but only if you got clearance for the treatment beforehand. If you don’t, the company just refuses to pay.

    (8) “In terms of finance, we force 700,000 Americans into bankruptcy each year because of medical bills. In France, the number of medical bankruptcies is zero. Britain: zero. Japan: zero. Germany: zero.”

    Not true. In fact, there is a special arbitration court in Germany that handles around 100.000 cases per year where insured citizens demand that their insurance companies pay compensation for treatments, or cases where private insurance companies refuse to accept new members and the latter sue. Also, roughly 500.000 self-employed German opt not to pay for health insurance at all because they can’t afford it.

    This whole debate in the US, and subsequent reporting by interested American journalists who, it seems, never had to live under the German health-care system, reminds me of an article I once read about women from various African countries who had to suffer from female genital mutilation and who had to endure the scorn of Western journalists because they dared to criticize 3rd world countries. Opined an eminent feminist writer in Australia, and ardent defender of those regimes, “The problem with these women is that their reports are tainted by their own experience.”

  4. Rob Koberg
    Posted August 26, 2009 at 5:27 am | Permalink

    When I hovered over the ‘misdirections’ I was expecting to see something about CIA prosecutions (which I am not against, just the timing seems strange). I think this is a good summary:

  5. Posted August 26, 2009 at 8:20 am | Permalink


    I don’t have time to respond to everything you write, but I will say that 400USD/mo is relatively inexpensive compared to current American rates. For the exorbitant price, we have fewer covered, worse outcomes, and enormous personal bakruptcy rates related to health care.

    It would be foolish to suggest that health care around the world is perfect, but it still seems reasonable to note that even Germany is doing it better than we are. Faults and all.


  6. Thomas
    Posted August 26, 2009 at 12:15 pm | Permalink

    As it happens, most of my friends in the US have a private health plan that is much less than 400 USD/mo and, actually, offers much greater coverage than I and everyone I know here in Germany gets – at a bigger price point.

    I’d like to know where you live and which insurance company is asking you in excess of 400 USD/mo.

    Also, please note that 300 EUR/400 USD per month is an average rate for someone of my age in Germany. For that money you get only basic dental (i.e. no prosthetics, no 6-month cleaning procedures, no aesthetic enhancements), only basic vision (i.e. the cheapest models of glasses), no separate rooms in hospital, after 3 days in hospital you pay out of your own pocket, no surgery that is not live-saving, etc. Also excluded: contraceptives, pregnancy preparations, the infamous hip replacements after age 55, and so on. Also, if you happen to be broke and can’t afford car or taxi to hospital, well, bad luck, insurance won’t cover it.

    For every treatment in that exclusion list you pay in addition to the 400 USD/mo.

    So if you think that currently you’re not getting your money’s worth, I’d be glad to refer you to friends and relatives in the US who can point you to a plan that works for you or your friends who are allegedly being bankrupted by your current system.

    And for the record, I have worked in the US for quite some time. My plan was at 80 USD/mo, and coverage was way more extensive than I ever got in Germany at five times the price point.

  7. Thomas
    Posted August 26, 2009 at 12:19 pm | Permalink

    To make the point complete, 400 USD/mo is an average for age 30-35, self-employed. An average employee pays 500 EUR/month, split between employer and employee. That also includes only basic coverage as noted above. An average private health plan amounts to 500-800 EUR/month (600-1000 USD/month), and you still pay 20% of every bill (that’s roughly 10.000 EUR for hip replacement, for instance), plus the insurance company can refuse to pay for treatments that they deem unnecessary or for which cheaper alternatives are available.

  8. Posted August 26, 2009 at 5:02 pm | Permalink

    Thomas, to better illustrate your point, how many Germans are currently uninsured? And how many Germans get bankrupt due to medical costs?

  9. ben hockey
    Posted August 26, 2009 at 6:41 pm | Permalink

    growing up in australia, i had no concerns about health care coverage. the public system was adequate and if you didn’t like it then you had the choice of purchasing private insurance.

    the 1.5% tax levy for this public health care is barely even noticeable and if you purchase private health insurance, you can even get some of this back. (

    @Thomas please share how you got insurance for $80/mo. here in new jersey, the best i can find is about $150/mo for what amounts to emergency coverage. for coverage in america that would compare with what i had in australia (for 1.5% of my income) i could easily have to pay $700/mo or more. i would be happy to pay $700/mo if that was 1.5% of my income ;)

    australia’s health care is not perfect but the american system is far from affordable and seems more like organized crime than an industry designed to serve it’s customers.

    perhaps the article has painted a rosier picture than the reality of living in the countries it references but for me, paying 1.5% in taxes for ‘free’ health care is far better than any option i’ve been able to find in america.

    it has been known for a long time that 2 things in life are inevitable – death and taxes. surely there exists a health care option that can keep both to a minimum? i am certainly not a socialist and hopefully a fear of ‘socialism’ doesn’t eliminate some very good options for a health care system that is in dire need of reform… but that is in the hands of those who _are_ american and of voting age :)

  10. Posted August 31, 2009 at 3:19 pm | Permalink

    20 years ago, you could go to the doctor for a routine check-up and afford to pay for it. Insurance was for catastrophic things. Now we use insurance for those routine check-ups since it costs around $300 per visit. What caused the increase? One factor is the number of frivolous lawsuits has increased significantly, which means doctors have to take out large liability insurance policies to cover if they make a mistake (shock! a human making a mistake??) or misdiagnose something and the person feels they are entitled to eleventy billion dollars because of it. Why isn’t anyone asking the president why he won’t cap the amount a person can “earn” from a lawsuit? Why can’t we put caps in place that would actually bring down the cost of healthcare by means of the market instead of throwing money at the liability insurance companies? Yes, we could fix the healthcare problem easily by giving everyone “free” healthcare, but that wouldn’t do much but mask the problem of rising costs much like the pain-killers people are addicted to just mask their pain: as the costs keep rising, more money will be required from the taxpayers. If we don’t stop the rising cost at the root, we’re going to have more problems on our hands down the road.

  11. Posted August 31, 2009 at 9:26 pm | Permalink


    The tort reform argument is seductive, but it doesn’t actually explain the delta, particularly not the dramatic increases of the last couple of years.

    Indeed, medical malpractice premiums are at their lowest rates in 30 years. Claims have fallen 45% since 2000. The states that have implemented caps on malpractice lawsuits (yes! health insurance is regulated per-state!) haven’t seen appreciable declines in the rate of increase in health care costs.

    It’s nice to think that it’s the lawyer’s fault, or the litigious patient’s fault, but the data just doesn’t support that theory. Instead, the major drivers of cost are bureaucratic overhead of private insurance companies (nearly 20% vs < 10% in public plans like Medicare). The system we have today is mean-spirited alright, it's just that the class warfare isn't where the libertarians want to imagine it is. There's lots that's broken with the competitive landscape of the current system, and tort reform might help in some small way, but calling it a root cause misrepresents the data and totally misses the magnitude of the problem. Regards

  12. Mark Holton
    Posted September 3, 2009 at 12:31 pm | Permalink


    “the major drivers of cost are bureaucratic overhead of private insurance companies (nearly 20% vs < 10% in public plans like Medicare)"

    Pushing overhead from private companies into the Government will *improve* the bureaucratic efficiencies? Interesting take, as most would concede governments are monuments to bureaucratic inefficiency. Where do you get the bulk % comparison numbers, "20% vs < 10%"?

    I find that to be wishful, at best.

  13. Posted September 5, 2009 at 6:20 pm | Permalink


    I realize that it’s hard for folks who have been indoctrinated to think that the government can’t do anything well to accept the data, but there it is: the US Government runs the most efficient health care delivery systems in the country. Between Tri-Care (active-duty US forces, at home and overseas, fully-socialized care from insurance to delivery), Medicare and Medicaid (nationalized insurance with private delivery), the administrative costs for the MOST at-risk and highest-spending populations in our country are SIGNIFICANTLY below those for active, working-age adults.

    For Medicare/Medicaid, the 2005 overhead was < 5% (see ). That compares to roughly 20% for non-public systems. Remember, again, that this is apples-to-apples: the delivery systems for care under Medicare and Medicaid are private, for-profit hospitals, doctors, and pharmaceutical companies…the very same ones that cost us 2x the international average for poorer health outcomes, but only when private insurers are paying.

    So what’s different? First, the public insurance systems can’t turn anyone down, so they don’t spend time or effort trying. That accounts for a LOT of the bureaucratic overhead. Next, they have the scale to be able to specify prices across the board, and the mandate of improving health outcomes to make it practical. Private insurers, in contrast, deal with everything on a procedure-by-procedure basis. Since they know that you’ll most likely be out of their system at some point, either through change of job or because you’ll finally qualify for Medicare, they do everything they can to make sure that they can deny you coverage for individual procedures, ignoring your health overall. They also do the most crazy thing imaginable when it comes to prices: they negotiate different prices and rates with each hospital and provider *for the same services*. Given that most of those insurers are relatively protected local monopolies, they have no incentive to make their process more efficient. They already have enough scale to start working on cost control if they want to…but they don’t. Why? Because cost control isn’t as profitable as denying coverage is. The result in a bureaucratic nightmare of overlapping paperwork and doctor/insurer back-and-forth. We pay a lot for that back-and-forth. Next, private insurers spend a lot on advertising. That’s not money that’s going into care, that’s money that’s going into convincing you that you’re getting something good when you’re demonstrably NOT. Lastly, the private insurers have armies of people who work to deny claims. It costs a lot of time and effort to invent ways to tell people “no”, it seems.

    All of these factors add up, particularly when you consider that they’re built on top of a market dynamic which doesn’t look anything like the theoretical efficient market: it’s not like I can go shopping for insurance based on my future needs. Else it wouldn’t be called *insurance*.

    At the limit, you’re trying to apply a theory of efficient markets to a situation which is rarely a real market, and is nearly never efficient. Your mental model for what will yield good outcomes is misplaced when it comes to the provision of health care.

    The only reason you think the reality that government-provided insurance is more efficient is “wishful” is because you haven’t yet accepted that government has a role in delivering public goods and that some things don’t fit the efficient market model.

    It’s too bad, then, that lots of folks simply won’t accept the data and the obvious implications of it. Please, for your friends, family, and for the sake of your future self, go get the data. Read up on the facts, and engage in this debate from a position of informed argumentation, not a knee-jerk “I don’t accept your theory, so reality must be wrong” attitude.

    Too much is riding on this discussion for it to be dominated by ideology.


  14. Posted September 6, 2009 at 3:45 pm | Permalink

    Alex, I totally understand what you’re saying and I was wrong for saying tort reform would fix the problem and classifying it as a root cause. However, there are two things that I have heard little said about: paying the doctors and the entitlement mentality that goes along with giving something for free.

    First, how will the doctors be paid? I want to know how my doctor will be paid for offering me his/her services. Will they be reimbursed the same way as the Medicare/Medicaid program? If so, you’re going to see a lot of doctors refusing to see or limiting the number of public option patients they see because of little to no reimbursement. Iowa is currently one of the states with the least amount of reimbursements, which means our health professionals aren’t being paid. And no, this isn’t a single incident: many of our local dealerships lost money on the cash for clunkers program and haven’t seen a dime of the promised money. The government may be efficient beuracratically, but that doesn’t mean it will reimburse people properly!

    And then how do we decide which doctor deserves to be paid what amount? Perhaps we’ll just put doctors on a salary and reduce overhead that way. Right now, family practice doctors are generally paid on a per-volume basis: the more patients you see, the more you get paid. This gives doctors the incentive to stay late and see patients after hours. Will that incentive still be there if a doctor gets the same amount of money (but only maybe if they decide to reimburse him/her) if he/she stays late or not?

    The entitlement mentality is something else that hasn’t really been touched. You give someone something for free and they will use it without regard. Ask any doctor (or nurse, since they are the ones that really deal with the patients) and I can guarantee they will tell you the patients they see the most often are the ones on Title 19. I say this because my mom has worked in the medical field for over 30 years and has seen it happen that way everywhere she has worked. If you don’t have to pay for your care, you’re more likely to go to the ER for a splinter or want to see a physician for the common cold. If you have to pay and know your premiums might go up if you’re irresponsible, you’ll be less likely to go in for small manageable ailments.

    I also have a problem with touting the VA as efficient. Beuracratically, perhaps. Medically, no. I’ve seen many retired soldiers given multiple “band-aid” surgeries to fix a problem until it gets so bad they have to have the real surgery. For instance, my wife’s grandfather did two tours in Vietnam (one voluntary). He has needed his knee replaced for 10 years, but instead the VA decided he needed 2 knee scopes during that time to clean out the scar tissue that had built up because the knee replacement was too expensive. Once it got to the point he couldn’t walk, they did the operation he’s needed for years. 3 operations vs 1 operation does not seem too efficient.

    We also need to look at how the government manages healthcare for those that haven’t served their country. We need to hear from people such as those that live on Indian reservations. How is their managed care?The quote I heard is “don’t get sick after June”. We may take care of those that have served our country, but when the chips are down and we’re taking care of those we stole from we seem to run out of money. Will I or my family be someone for which the money has run out after June?

    Yes, most of my stuff is anecdotal. No, I don’t have numbers. But the medical field is more than just numbers and statistics. We need to ask our medical professionals what they think. I want to know what doctors and nurses think of the proposed legislation and what they think could be improved and how. I want to hear the frustrations of VA and private practice doctors and nurses alike. We have a broken system, but I don’t hear anyone asking the people in the system for solutions: only talking heads and corporate whores.

    P.S. If there are typos, I apologize. I typed this on my iPhone and I can’t easily proofread it ;).

  15. Posted September 6, 2009 at 6:32 pm | Permalink


    I don’t have time right now to respond in full, but a couple of things off the top of my head:

    First, you note some of the really stupid things about how we pay doctors, but fail to connect the dots: if there’s a single-payer system (like Medicare), there’s suddenly no incentive to pay for individual procedures, instead there’s a greater incentive to pay for quality of care over time. That means taking a systemic look at what’s working and what’s not. Today, regardless of reimbursement rates, we get better health outcomes in systems that manage health of a patient over the long haul. There’s aren’t a ton of examples of this in the US (Kaiser springs to mind, but they’re mostly West Coast), but they’re *everywhere* in the rest of the industrialized world. Having a single payer (think Medicare) fixes that particular set of broken incentives, giving one entity a reason to pay attention to — and reward — what works. This isn’t about working longer hours. Getting doctors to “work hard” isn’t our problem. This is about working smart. I’m fine with paying doctors the same (or more) as we do now if we could be spending it smarter. We do too many procedures that have little to no impact on outcomes today, and it drives prices up. Fixing that is key.

    As for “free” health care, the argument simply ignores the moral imperative of health care provision. Either you think it’s good for society that we take care of each other when we’re sick, or you don’t. If you don’t, then there’s not much of a discussion to have. There are lots of causes of sickness, but saying “they” are sick doesn’t get to the root of any of them, it only implies that somehow “they” are bad. If you think we should take care of our sick, then we only need to figure out the details. Today, we’re failing because we (collectively) agree that we should take care of the sick and the weak, but we do it badly. That’s just reprehensible incompetence, in my book.

    Lastly, the VA has been massively under-funded for a while now. There are problems there, sure, but the last administration saw to it that not only was active-duty care denied to folks who really needed it, but also that the VA wasn’t given the resources to deal with the predictable outcome of a massive war of choice. Again, reprehensible incompetence, but not intractable. Indeed, they’re finally going all-electronic for VA medical records to ensure that handoff between Tri-Care and the VA doesn’t leave folks in the lurch. About damned time, but remember that as bad as it’s been, that’s still years and years ahead of where the private sector is today. Even in the case of your family member, 3 surgeries didn’t cause a financial calamity.

    Anyway, I’ll try to post numbers when I have more time, but suffice it to say, yes, your argument is annecdotal, in part because it totally and ignores the comparative material WRT how other countries pay and provision care and their outcomes vs ours. More on that soon.


  16. Mark Holton
    Posted September 7, 2009 at 11:29 pm | Permalink

    Appreciate the discussion and the passion behind it. It is a conversation that most certainly has to happen to bring awareness and better understanding. Thanks for taking the time to share your thoughts — agree that ideology doesn’t have a place with regards to this issue, and a purely free market system has holes that require the government to address. I was initially surprised at the numbers you cite, and it’s motivating me to look into this issue in a more detailed manner than I would have prior to reading your post.

  17. Posted September 8, 2009 at 1:54 am | Permalink

    Hey Bryan,

    Time for numbers. If you ever have the time and inclination, you might start here:

    * The 2008 health system overview report by the CDC (pdf, huge, but please download it since I’ll be referencing a lot of data from it).
    * The Kaiser Family Foundation‘s site on insurance and their related State Health Facts database.
    * PolitiFact’s page on judgements regarding many of the arguments being fielded (both left and right)
    * The Agency for Healthcare Research and Quality’s reports on Safety Net Monitoring
    *’s overviews of the proposed legislation and current state of care provisioning and delivery
    * Some bitch’n data from HHS about overall health expenditures and rates of change in public and private plans.

    There’s a lot to soak in there. This debate is about how we do better for more people, not about individual outcomes, much as I absolutely care about them. Millions of families face everyday tragedies, and this discussion has to be about what happens when they inevitably do. Put another way, should we allow predictable tragedies to become catastrophes, or even travesties? That’s the question we’ve got to answer.

    You asked some important questions, and raised some other important issues tangentially:

    Reimbursement rates from public plans may be lower than private insurers are willing to pay for (some) (covered) care.

    Iowa’s in a bad spot here, and so is CA. Luckily, it’s also on the agenda for reform.

    Reimbursement rates form one of the legs of the oft-discussed “cost control” measures in the currently proposed legislation. Under public plans they’re more-or-less fixed, helping private insurers plan…assuming their costs don’t go up wildly. Guess what’s been happening lately? Private insurers further the confusion by setting different rates for procedures because they negotiate them differently with every provider, so uniform rates will at least help doctors plan better. PPO’s and HMO’s today squeeze doctors too, but admittedly the rates fluctuate faster, helping providers pad their bottom lines by steering patients toward profitable procedures. If that makes you queasy, it should.

    Today, we do too many procedures (because we pay for services, not for health) and we pay too much for all of them. If you go read the T.R. Reid article, you’ll probably be as amazed as I was that Japan’s doctors can do CAT scans for less than a hundred bucks. But why should we be shocked? Isn’t that what markets are supposed to do, help drive down costs by fining ways to make things cheaper and do more for less? As long as doctors know that the rates for covered services are fixed, they have incentives to do them for less. They can then lean on suppliers and medical technology companies to help them deliver for less once the incentives to do more procedures is removed. The mythical margin returns, but this time it’s riding technological improvements and cost savings, not actuarial gimmicks and adverse selection. It really is all about incentives. Under the proposed public/private split, doctors will be free to not take folks covered under public insurance plans, that’s the same way it is today for Medicare, and we aren’t in the midst of a Medicare doctor shortage…well, not in most of the country anyway. Private plans, in this world, have plenty of room to compete on the basis of being more efficient, paying doctors more (and luring the best talent), or providing better preventive care. Under all of the proposed legislation, denial of coverage for pre-existing conditions will go away, so some of this is bound to get better so long as something passes the Senate.

    Crucially, a public plan helps to solve this over the long haul by putting everyone into a single, motivated political group. A nationwide plan makes it simple to build a constituency for appropriate reimbursement rates for providers, just as the AARP is able to move heaven and earth to ensure that Medicare doesn’t leave too many people in the lurch. How this actually plays out would be related to the final structure of any public plan, and Ezra Klein has run down a lot of the options currently under discussion.

    Free things get used too much.

    Well, at least physical goods. But the point stands. If there’s no price to medical care, we should expect a tragedy of the commons. In the absence of a pricing function, what would anyone expect?

    First, it should be said that a lot of countries enjoy 100% coverage at lower cost while maintaining near-private systems. They’re just regulated to hell and back (see Germany and Switzerland). These systems have prices for things and charge for them in ways that you’d recognize, only with prices that you wouldn’t and quality that you’d kill for. In fact, amongst industrialized countries, we’re 23rd in overall life expectancy (Table 25 in that monster CDC report). If you somehow make it to age 65, our system gets a whole lot better, bumping us up to 9th. Even countries that you’d expect to be debilitated by the free nature of their health care let you live a lot longer, just ask the Canadians. Clearly others have figured it out. It’s not intractable (by inspection).

    But back to the purely public insurance option:

    We need to differentiate between types of care. There’s primary and emergency care, basic stuff; and then there’s elective and quality-of-life care, lasik vs. a new pair of glasses (to be crude about it). Most Americans agree that primary and emergency care should be provided to everyone, regardless of ability to pay. That basic principle is why so many people who don’t have insurance show up in ER’s. We can’t stand to see our poor go un-treated in the richest nation on earth (and for good reason), but the way we do it today is the most expensive way that we can possibly imagine.

    Some advanced societies treat lines for elective care as a form of pricing in the absence of actual cost. It’s a bit crude, and I don’t think it’d work (politically) as a viable system here, but please note that lots of countries manage just fine, thank you, with some sort of delay as a form of price for elective are (Canada, the UK, etc.). Nominal pricing schemes for elective care make a lot of sense to me here, and it’s a great place for competition to sort things out, just so long as the baseline for care remains high enough.

    Regardless of how we wind up doing it, the basic point remains: we pay too much. We deliver our care badly, at the least effective points in a patient’s life (emergency vs. preventive care). Just being smarter about how we dole out the care we’re already providing — “free” or not — would save us a lot of money and wouldn’t have any appreciable impact on access to care for the well-off.

    Lots of folks in our society only ever to go ERs to get help, and they do it a lot

    I really think this is a red-herring.

    Folks who can go to a regular doctor tend to do just that. No one really wants to be a nuisance, and today we have no way of saying “hey, you’re being a nuisance” since nobody’s got overall responsibility for providing health care to them. So why don’t some people go to a regular doctor? Obviously, nearly 50 million who don’t have insurance, so the ER is the only option. Most primary-care physicians just won’t see you as a drop-in if you don’t have a relationship with them already. And what’s wrong with going to the doctor if your cold is bad? How are you going to tell that it’s just a cold? You’re not a doctor, after all. Anyway, lots of people over-use medical services today, but only our poorest do so in ERs exclusively.

    As I said earlier, in a rich society that doesn’t like to think of itself as failing its poor and weak, simply turning people away at the ER isn’t an option. When we start turning people away everywhere else, though, where did we expect them to show up?

    The other side of this is chemical dependency. Here in SF, some enormous percentage of our un-reimbursed ER visits are related to chemical dependence of some sort. That’s not a problem that gets addressed without real work and effort, and today it falls to municipalities to try to cobble together treatment programs. Where cities don’t have them, the results are predictable and expensive.

    The VA isn’t awesome

    True, and sad. The VA has been a source of frustration for decades, owing largely to under-funding at the hands of Congress. It’s painful to see what’s happening as the influx of Iraq and Afghanistan vets pour in. The way the VA is funded simply needs to be taken out of the normal budget process and pegged to usage and near-term projections instead of being subject yearly politicking. The way we run it now just sucks.

    I don’t trust government to do this well

    Fair enough, but compare how we treat our elderly with how we treat everyone else and it’s clear that we’re already doing this better, cheaper, for some people and could easily be doing the same for everyone else too. The yardstick that we need to measure solutions by is relative in this case, and relatively speaking, our current system sucks.

    If you disagree, the proposal before the House right now will let you keep the coverage you’ve got. If, on the other hand, the public option does as well for the young as it does for the old, we should expect lots of people to chose it. Not because it’ll be foist upon them, but because it’ll be better, it’ll keep them from fearing losing a job or losing coverage because they had to choose between COBRA and the mortgage.

    If we go for this “public option”, won’t it raise my taxes?

    Of the two plausible answers, “yes, but so what” is probably the one that’s most likely to match reality. What’s going to happen is that we’ll spend less overall on health care, have better outcomes, and cover everyone, with a slightly progressive tax to cover the uninsured. Unless you make a certain amount, you probably won’t pay more but will still reap the benefits of better care at lower cost without the fear and anxieties associated with the current system. The only real question (in my mind) is “will this cost me less overall?” and the resounding answer, based on the plans that came out of the House, is “yes!”. That the money goes into one pre-tax bucket vs. another hardly matters to me, just as long as we get a better answer in the long run.


    Ok, I didn’t get to everything I wanted to cover, but I need some sleep now. Let me know if you have questions about anything I’ve written here, as I realize that I spent nearly no time on the economics of the situation and explaining that might help (depending on your interest level).


  18. Pihc
    Posted September 9, 2009 at 10:02 am | Permalink


    //As for “free” health care, the argument simply ignores the moral imperative of health care provision. Either you think it’s good for society that we take care of each other when we’re sick, or you don’t. //

    A societies moral imperative about health care should center around that societies common morality. Our medical system allows for a gross violation of the sanctity of life, i.e. abortion, that is necessary for social agreement on morality. See prohibition of murder in relation to social contract theory.

    When medical text book definitions decide the fate of a potential human life that is in no way “sick,” why would our society take better care of the poor that were not “saved” from the terrible life that would be fated to an unborn fetus? Our society has said that they do not have a moral obligation to the sick and defenseless. The moral imperative is ignore with the hypocrisy.

    //Crucially, a public plan helps to solve this over the long haul by putting everyone into a single, motivated political group.//

    I have a problem understanding how this is a good thing. Single party politics through government control of health care? Our systems of government and commerce are based on tension between opposing interests in a commonly supported neutral framework. Removing the neutrality of a system by giving political powers control of it is not a positive realistic goal in our country. The power would be used to further political agendas from either side of the isle. Assuming an isle still existed.

    //As long as doctors know that the rates for covered services are fixed, they have incentives to do them for less. //
    Why? +
    //Most primary-care physicians just won’t see you as a drop-in if you don’t have a relationship with them already.//
    Why? +
    //The VA has been a source of frustration for decades, owing largely to under-funding at the hands of Congress. … The way we run it now just sucks.//
    Why? +
    //“yes, but so what” //
    Why? =

    The cost is why. A doctor doesn’t know what the expense will be to him or the customer not because he is incompetent because he has no control of the variable rate overhead. i.e. insurance.

    Many physicians won’t take walk-in’s because of the risk of litigation from a patient that wants someone to blame for a sickness or is looking for a quick buck. Even if the physician wins the lawsuit it hurts his reputation, his insurance rates go up. It’s not worth the risk.

    The VA is a prime example of how not to do health care and the best our government could come up with to date. The USA is not a small to mid-midsized European/Asian country. We are a continent spanning behemoth-of-a-thing that will have bureaucracy above and below bureaucracy out of necessity of size. This will skew the low cost of smaller countries to seem ideal for us to imitate at the federal level.

    Several other issues remain untouched like tax burden of citizens to support illegal aliens, disparity between health care for inmates and health care of law abiding citizens, and the stance that the catholic church will take to having it’s hospital preform procedures they do not condone. (The Catholic health care system controls about 35-40% of the hospitals in the US.)

  19. Posted September 10, 2009 at 9:28 am | Permalink


    Wow…it’s hard to know where to start on this, made harder because I think you’re conflating a lot of separate-but-related things and trying to cobble together an argument out of un-related strands. You might go give a listen or a read to President Obama’s speech from last night. It’s the easiest intro to what’s actually being proposed that I’ve seen anywhere, and does a lot to dispel some of the lies someone’s been telling you.

    Let me say that again: someone has willfully and repeated lied to you about what’s in the proposed legislation or distorted the meaning of the various provisions. You should go poke around and get some actual facts about what’s being proposed. It’s wildly different (and much more incremental) than anything you think is on the table.

    I can’t respond in depth to all of the things you’ve said, so let me just focus on the abortion canard since you raised it first. Lets be very clear: the moral question of coverage for those who are entrepreneurs, work for small companies, or otherwise can’t afford to buy in the usurious individual market is separate and orthogonal to any question of what procedures should be offered. Conflating them is disingenuous and harmful to the debate. You’ve advanced no cause. Many who read your post will simply assume that you can’t be reasoned with, particularly since “conscience laws” are explicitly protected by the proposed legislation. Your implicit argument that we should deny millions access to basic health care because the politics of an unrelated topic aren’t to your liking (although that’s flatly false too) is deeply troubling to me. Most Americans want there to be fewer abortions, even those who you disagree with on what the law should say about the rights involved. To raise the (settled) question of law in this context without informed opinion about what’s in the proposed legislation is…caviler, to be charitable. At worst, it’s a blatant attempt to drive a wedge issue into the center of a debate where it’s both alien and toxic.

    Most of the rest of your post is riddled with the same kinds of problems, and I’m out of time for now. But please, go read the speech, read up on the legislation that’s been proposed, and try to separate in your mind the fact that we fail millions of Americans every day from the reality that you might not agree with every one of them on every issue. Morality is what we think is universal…what should be true for everyone. Even the people we don’t agree with.


  20. Posted September 11, 2009 at 4:29 pm | Permalink

    @Alex: I’m so totally agreeing with you. If you need some references (numbers, etc), check my post “Everything you need to know about U.S. health care reform” at

  21. Posted September 11, 2009 at 7:20 pm | Permalink


    That page is great!

    I think maybe the only thing I’d want to see added is a note regarding the ’07 census data to describe how the recession has undoubtedly driven the numbers up. In some cases way up.

    Fantastic stuff.


  22. Posted September 12, 2009 at 12:39 pm | Permalink

    This is not particularly coherent, but some scattered thoughts.

    Why is medical care special? I like to think about what would happen if we treated and regulated and controlled software development like we do medical care, and I think that a model that allowed for open source medical care, and outsourcing care, would fix many of the problems we face.

    Friends of mine from the UK come to the US to pay out of pocket for medical and dental care here, because they actually want to get their problems fixed, and it’s a lot cheaper here. Similarly, more and more people are flying to India for procedures because it is cheaper over there.

    Our clusterfuck of regulation and subsidization makes it much easier to get coverage when employed (usually at a very hidden discount because employer’s only get a tax break if they pay at least 50%) has led to a system where people are completely out of touch with what they are paying for and what the real costs are. Part of this is to encourage people to stay employed and not switch jobs.

    If you bought “software insurance” and each time you had a bug it was $20, but someone else was paying $200 on your behalf, at a discount from $300, you would quickly lose an understanding of what things actually cost. Healthcare is something we pay tremendously for, but we’re completely divorced from the true cost or value of medical care.

    My concern is that, like social security, the cost of medical care will only rise and become a major tax burden on everyone, and guarantee the medical industry a fixed amount of the entire GDP.

    Conversely, most doctors are not paid on the quality of service provided, but on the number of patients they can see. And they order a significant amount of usually unneeded studies so they don’t get sued, and because this increases their bottom line.

    I am extremely uncomfortable with a system that would determine how much doctor’s get paid. I know that I would not want to become a medical doctor if there was one government entity deciding how much I could earn (and I did not go into medicine because I did not like that a handful of insurance companies currently control the amount a doctor makes).

    The current system sucks, badly, but many people still regard this country as having the best available care if you can afford it.

    Medical care should not be as expensive as it is, but insurance utilization and expanding scope, has only increased prices.

    I believe the recent op-ed piece by the CEO of Whole Foods was a good start towards fixing the problems we have.

    Insurance should be for catastrophic events. You don’t insure your car for scratches to the paint. You don’t insure your house for leaky faucets. And yet we insure our bodies for everything that comes up, rather than for the real problems. The other things that come up are too expensive, and we need a more open, self-help way to fix these things that are clogging our medical system and raising costs all around.

    I want to have more choice and less regulation so I can pay for the quality and quantity of medical care I want, with a cost structure that’s based on competition. I want to see radical changes like making it possible for anyone to provide medical care, certified or not. This may sound heretical, but we don’t need doctors for everything, but the system currently makes it cheaper to see a doctor than any other option that might be available.

    Our existing regulation has created a system that harms choice and free market, harms doctors and patients, and helps insurance companies and pharmaceutical creators. I seriously doubt that more regulation helps the situation, as the existing regulation was heavily lobbied for by the aforementioned constituencies. And in fact, the insurance companies and pharmaceutical companies are completely on board with the newly proposed plan. If that doesn’t scare you and tell you that there’s a lot of money being sucked out of the economy, I’m not sure what will.

  23. Posted September 12, 2009 at 1:28 pm | Permalink


    I’m only going to engage your first question — “Why is medical care special?” — because it’s at the root of the long string of arguments that you offered. Breaking it down guts the rest of them, and I’m afraid it’s not hard to do.

    Health care, by inspection, is not (generally) something that people rationally consider. Certainly not basic services like emergency care. Even routine care, checkup and the like, isn’t strictly a cost benefit analysis. People don’t think about health that way. Nor do they have the means to do so. It’s sort of only knowable in aggregate (we use this much health care in state/town, or by demographic), and as I’ve noted several times here, is not a purely individual good. Imagine that I were still working for you (humor me!) and you got sick. Really sick. Debilitatingly ill. My work would clearly suffer as a result. Similarly, if I’m on a team and I get ill, the team suffers. Health, like education, has aspects of both personal and common goods.

    Then there’s epidemiology. Like it or don’t, science implies a very strong public good role for things like immunizations, where the overall benefit of doing something pervasively is very high, but the individual incremental value to doing it is relatively low. In other words, a situation ripe for market failure.

    Nor is heal care strictly incremental. If a surgery is required to remove a tumor, the patient doesn’t get any benefit out of you simply running a central line or doing a couple of steps of prep. Similarly, recovery and complications make services for organizing care and coordination at least as important as the actual procedures.

    Similarly, basic health care services tend to be dispensed when the need is there. You can’t plan to have that heart attack, after all, nor are you incented to. That means that you’re not going to be “shopping around” while in the ambulance on the way to the hospital.

    Further, patients aren’t the ones who are qualified to make decisions about what’s “rational” for their care. That’s the role of doctors for a reason. Just google for “asymmetric information health care” to get a feel for why modeling the market for health care like you would, say, the market for corn, doesn’t work.

    It’s clear, then, that health care isn’t like other goods and that starting a discussion from that premise will lead you to outcomes that leave people in the lurch; ignoring our moral imperative to take care of our poor, weak, and sick because we confused a mechanism for provisioning with the social imperative that animates the need — destroying value and inefficiently allocating capital in the process.