A new health insurance system in the United States | Catallaxy Files

By Lucius Quinctius Cincinnatus:

Donald Trump may be finding it difficult to repeal the Patient Protection and Affordable Care Act (aka Obamacare). But what is he trying to replace it with? It seems nothing that will contain costs and provide a reasonable level of health care to all Americans. Capitalist or socialist or communist one should not in a first world country accept a health care system which fails many people.

If Trump wants to look overseas for a new model, he could do worse than adopting the Australian system. While our Medicare and private health insurance system has a number of deficiencies and needs substantial reform, it is far and away better than the US system where an initial simple consultation to a doctor costs a minimum of USD 200.

According to OECD data, the cost of health care in the United States is $9451 per capita compared to $4420 in Australia. The World Bank has Australia’s health costs at 9.1 per cent of GDP while in the US it is 17.1 per cent of GDP. The European Union average is 10 per cent of GDP.

Think of the implications if the US could bring its health costs down to Australian levels. It would save USD 1.5 trillion each and every year. And by bringing in a Medicare-like system the US would give better access to health care by all Americans.

If Trump wants to go down as a hero in the United States he should work in that direction. No other President or Congress has been able to make such major health care reforms in the USA or to address the powerful lobby groups which work to maintain the status quo.

What caught my eye was this interesting comment posted by flyingduk:

I am a senior Dr working in SA. The health system has become Godzilla. It is a rampaging beast eating every resource thrown at it and producing little of value in return. Our hospitals and our ambulances are packed full of hopeless cases and self inflicted disasters. We are pointlessly throwing ever more $ at elderly people with complex, end of life medical conditions. We are spending enormous amounts on meth addicts, alcoholics and the morbidly obese. Most of this money evaporates with nothing to show for it. The ‘health’ system has ceased to be a health system. It has become an ‘illness’ system. It cannot go on like this. Its going to collapse.

So a state-funded system has its problems as well. But there is an alternative. From Margherita Stancati at WSJ online:

Like other European countries, Italy offers universal health-care coverage backed by the state. Italians can go to a public hospital, for example, without involving an insurance company. The patients are charged a small co-pay, but most of the bill is paid by the government. As a result, the great majority of Italians don’t bother to buy private health insurance unless they want to seek treatment from private doctors or hospitals, which are relatively few.

Offering guaranteed reimbursements to public hospitals, though, took away the hospitals’ incentive to improve service or rein in costs. Inefficiencies were rampant as a result, and the quality of Italy’s public health care suffered for years. Months-long waiting lists became the norm for nonemergency procedures—even heart surgery—in most of the country.

Big changes came in 1997, when Italy’s national government decentralized the country’s health-care system, giving the regions control over the public money that goes to hospitals within their own borders…..

In much of the country, regions have continued to use the standards of care and reimbursement rates recommended by Rome. Some also give preferential treatment to public hospitals, making it more difficult for private hospitals to qualify for public funds.

Lombardy, by contrast, has increased its quality standards, set its own reimbursement rates and, most important, put public and private hospitals on an equal footing by making each equally eligible for public funds. If a hospital meets the quality standards and charges the accepted reimbursement rate, it qualifies. Patients are free to choose between state-run and publicly funded private hospitals at no extra cost. Their co-pay is the same in either case. As a result, public and many private hospitals in Lombardy compete directly for patients and funds.

…..Around 30% of hospital care in Lombardy is private now—more than anywhere else in Italy. And service in both the private and public sector has improved.

State hospitals have improved their service levels while private hospitals have lowered costs in response to the increased competition. A win for the taxpayer and for patients.

Source: A new health insurance system in the United States | Catallaxy Files

2 thoughts on “A new health insurance system in the United States | Catallaxy Files

  1. Joey Godalla says:

    There are plenty of workable models to choose from world wide – that’s never been the problem. Even with the American mind-set of “if we didn’t think of it – it sho ain’t gunna work”, they could easily have taken someone else’s model and claimed it as theirs.
    From my distant perspective there seem to be 2 enormous barriers blocking sensible American health care.
    The first blocker is getting Congress to create a taxation system that ensures EVERYONE contributes what they can afford into the nation’s coffers (including staggeringly wealthy individuals and tax-dodging multinationals) so that the Government can afford to repay the people with a universal health care system. Health insurance then becomes a personal choice between waiting and quality, as it is here.
    The second blocker is a psychological change in mind-set that acknowledges everyone’s life is an asset to the nation and is therefore worthwhile. But the idea of sharing one’s tax dollars to help someone else more needy is the thin edge of the wedge towards Socialism (aka Communism in America). In a nation that favours the strong crushing the weak, I just can’t see this changing. Even President Obama couldn’t do it. The current clown can’t remember what he said yesterday.
    RE flyingduck’s “…We are spending enormous amounts on meth addicts, alcoholics and the morbidly obese. Most of this money evaporates with nothing to show for it.”
    Whenever I hear the words “…we are spending enormous amounts of money…” my mind hears “someone is making an absolute pot-load of money somewhere”. Spend and receive mean the same thing, depending on which side of the cheque book you’re sitting. I don’t know of any struggling doctors, radiologists, oncologists, etc, Our healthcare system isn’t failing them. But I know a few struggling nurses, volunteer carers and cleaners. As for the patients – well, they were never the customers of hospitals anyway – the doctors are.

    • ColinTwiggs says:

      Makes a lot of sense Joey. The medical lobby is one of the most powerful interest groups in politics, both here and in the US. Up there with big banks, big oil, big mining and big unions. Everyone with their snouts deep in the trough is most likely willing to spend a lot of money and effort to protect that position. Democracy at its worst.

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