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Posted at 12:30 PM ET, 01/18/2011

The health-care system will always need the government

By Ezra Klein

You often hear about the need for more "free-market" solutions to the health-care crisis. The problem for this theory, as Matt Yglesias notes, is that "the only reason most people are insured today has to do with the non-market elements of the system":

First, the tax code provides an enormous subsidy for employer-provided health insurance that ends up putting the majority of employed Americans into large risk pools at the expense of everyone who doesn’t work full-time for a big company. Second, Medicare mops up the largest pool of non-employed people by giving single-payer health care to everyone over 65. Third, a regulation bans discrimination against people with pre-existing conditions as long as they maintain “continuity of coverage” as they shift from one employer to another. Fourth, COBRA allows people to maintain continuity of coverage even if they experience transient spells of unemployment. Fifth, Medicaid and SCHIP give coverage to many classes of poor people who’d otherwise be unable to afford it.

There's no free-market solution for the health-care system, at least not insofar as "free-market solution" means the government stays out of it. In a free market, people who are sick, or have previously been sick, can't get health-care insurance. Many, many more can't afford it. And a solution that leads to 40 percent of the country being uninsured is no solution at all.

The two eventual choices here are A) government monopoly, like Medicare-for-All, or B) government-structured market, like the Wyden-Bennett Healthy Americans Act, or the system we see in Switzerland. Increasingly, the GOP is coming to recognize this, which is why their intellectuals have formed the "anti-universal coverage club" and their politicians have stopped supporting universal coverage altogether.

I hope this is just a temporary partisan reaction to the specter of a major victory for President Obama and not a view into what the GOP does when faced with a problem where the solutions don't neatly fit their worldview. That Mitt Romney passed a version of PPACA in Massachusetts and President George W. Bush was pretty flexible on education and the GOP has been defending Medicare gives me some hope on that score. You also occasionally hear Republicans praise the health-care system of Singapore and Switzerland, and both systems have a heavy government role. But Republicans have dug in so deep on their opposition to things like the individual mandate that I just don't know what serious policies are left for them to embrace if they want to get constructive later on.

By Ezra Klein  | January 18, 2011; 12:30 PM ET
Categories:  Health Reform  
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Comments

Watch this first: http://video.pbs.org/video/1050712790

Frontline looks at the health care systems around the world. You will understand that a National health care system will always fail unless:

1) Health insurers must accept everyone and they must be nonprofit.

2) Everyone must the same insurance (or pay an exorbitant Cadillac plan tax).

3)Insurance agencies and the government pay for the extremely impoverished.

4)All medical services have a
nationally established fee that is non‐negotiable (you'll pay the same price in New York for an ECG that you would in Omaha.)

So the best programs are more like an insurance company monopoly but they are non-profit and gain advantages over one another by cutting administrative costs and improving customer service, which sounds very free market.

Posted by: RisingTideLiftsAllBoats | January 18, 2011 12:47 PM | Report abuse

It's just really Republicans have gone more and more off the deep end, becoming more and more a party of pure dogma, ever more resistant and hostile to logic, math, science, and even just thinking, at least if it's beyond a dogmatic soundbite.

Paul Krugman's last column talked about the Republican "War on Logic". My comment was this:

There's basically nothing new here. Remember Al Gore's book, "The Assault on Reason". What's happened is that the press again and again has let the Republicans get away with it, and again and again it's worked. So this has given the Republicans more and more confidence that they can succeed with ever more outrageous misleading, obfuscation, and outright lies and illogic, boomed out by their billionaire financed propaganda machine.

The key is the shameful behavior of the press. And this is due primarily to three things: 1) They care more about LOOKING balanced than conveying important truths in a non-misleading way. If the important truth is unbalanced, or looks unbalanced, then we won't convey the important truth. 2) They are severely lacking in resources and expertise to investigate claims like the recent Republican ones on the Doc Fix, so that's a big incentive to just do "He said, She said" and therefore not have to investigate what he and she said for veracity. 3) Related to (2), they care way too much about being first and fast, even only hours faster, relative to being non-misleading. You can do a "He said, She said" almost instantly. To actually investigate and verify the claims first could delay the article by a day or more.

These monumentally harmful shortcomings of the press are primarily due to externalities. For more on this see:

http://richardhserlin.blogspot.com/2009/10/lets-consider-monumental-externalities.html

How will it end?

As I wrote before:

Only about 25% of Americans identify themselves as Republicans (This jumps around, but it's usually in the neighborhood of 25%).

This 25% includes the most hard core, Tea Party, Fox watching, Rush listening, Koch brother's billionaire propaganda machine whipped up 12.5%.

So half of the people who call themselves Republicans are fairly extreme and black and white, or very much so – and this half votes far more often than the other half – especially, especially in primaries – the more extreme and passionate you are the more likely you are to take action, including making the effort to vote, or go to a caucus (also retired seniors have, obviously, more time to vote, and have had decades to get registered and acquanted with, and used to, voting).

So things could get very bad. We could even have a President Palin in 2012.

What can we do. Ending the filibuster would be especially valuable, because nothing decimates propaganda like try-and-see and the filibuster is an ultra powerful enemy of try-and-see.

For other things, see:

http://richardhserlin.blogspot.com/2010/11/automatic-registration-and-permanent.html

Posted by: RichardHSerlin | January 18, 2011 12:50 PM | Report abuse

The best solution is a healthier America. You can reduce your chance of diabetes by 90%, prevent 60% of all cancers, and cure heart disease by following a plant based diet. You can't legislate health. A great (extended) lunch break would be to watch Dr. Caldwell Esselstyn in the documentary "Chow Down." http://www.hulu.com/watch/172558/chow-down

Posted by: RisingTideLiftsAllBoats | January 18, 2011 12:54 PM | Report abuse

Actually the Swiss system is pretty similar to what the PPACA would create, so saying they're for it is basically hypocritical.

Posted by: therealcervantes | January 18, 2011 12:54 PM | Report abuse

The Netherlands also has a universal mandate on its citizens to purchase health insurance.

Posted by: agoldhammer | January 18, 2011 1:02 PM | Report abuse

I doubt "what policies will the GOP embrace if they ever decide to get constructive" is a question that will ever be answered.

Posted by: mutterc | January 18, 2011 1:06 PM | Report abuse

Woe is me... How did we manage to survive before the federal tax code -- sorry, before the federal tax code offered what PPACA lobbyists like to call "subsidies" for health insurance (that is, before the federal government began refraining from taking money from those who made the personal decision to purchase health insurance)? Before Medicare? Before continuity-of-coverage regulation? Before COBRA? Before Medicaid? More importantly, has the quality of life of every American improved because of the five cited federal invasions?

Health care is possible without any federal involvement whatsoever! Just look at 400 years of Appalachian history and see the thousands who have lived healthy lives without any help at'all from dearest Uncle Sam with his deep packets and sticky palms.

Once again, the used car salesmen attempt to hype the wonders of a product that simply isn't needed and emphatically is not wanted.

Posted by: rmgregory | January 18, 2011 1:08 PM | Report abuse

As long as you publicly conflate "health insurance" with "health care", Klein, you prove what a propagandist you are.

If all you care about is forcing everyone to be insured, then, yes, you need the threats of force and the force of government to bring that about.

On the other hand, if you want to bring about efficient, affordable, innovative, wide spread, quality health *care*, government is not the solution, but the problem.

Posted by: msoja | January 18, 2011 1:51 PM | Report abuse

"I put that question to a number of leading Republicans. Not one claimed universal coverage was a goal of Republican policy, and from their answers it's clear that universal health care is an afterthought."


Yep, as it should be.

Giving cheap 1960s technology health care to people is fine. Giving expensive 2010s technology health care to unproductive or minimally productive citizenry and illegals is an absurb waste of resources that could be used for economic growth.


There is no way that spending 7 figures on a burger flipper's health care is a pro-growth policy.

Posted by: krazen1211 | January 18, 2011 1:57 PM | Report abuse

"Just look at 400 years of Appalachian history and see the thousands who have lived healthy lives..."

Just look at Appalachia and how desperate thousands of people seem to be for medical care every time the Remote Area Medical Volunteers Corps comes to town to set up free clinics in the local fairground.

Waiting in line for hours to see an overworked volunteer doctor for a few minutes hardly sounds like the health care paradigm we should aspire to.

Posted by: Nylund154 | January 18, 2011 2:05 PM | Report abuse

Massachusetts will be introducing changes in the laws of their health care program to monitor fraud by hospitals and insurance providers. Expect Governor Deval Patrick to announce legislation soon and a possible test run for federal implementation.

Posted by: covino56 | January 18, 2011 2:13 PM | Report abuse

"The problem for this theory, as Matt Yglesias notes, is that "the only reason most people are insured today has to do with the non-market elements of the system"

It's like a thief steals your money, buys you a $100 grilled cheese sandwich, and claims you'd never be able to eat if it weren't for him.

"There's no free-market solution for the health-care system, at least not insofar as "free-market solution" means the government stays out of it. In a free market, people who are sick, or have previously been sick, can't get health-care insurance."

But if the people had control of the $6.5 trillion in resources spent annually by the government, the sick might have access to quite a lot of care.

Posted by: justin84 | January 18, 2011 2:24 PM | Report abuse

I don't see how there can be a non-cynical explanation for what the Republicans are doing.

Krugman is right to call it an eliminationist strategy. And right to draw a parallel to what they tried to do to Bill Clinton.

And Hillary was right, or not far wrong, to call it a "vast right-wing conspiracy". It's alive and well.

Posted by: jtmiller42 | January 18, 2011 2:40 PM | Report abuse

Privatized free markets have utterly failed to solve our health care needs. Instead, they attempt to insure and care for only the healthy or the less ill.

Considering we are all equally likely to get seriously ill, there should be no debate as to the next step: have gvmt step-in to form partnerships with health care providers and insurers to come up with the least painful system we can think of to fulfill our health care needs.

ObamaCare is not perfect, but it's the best thing to happen to US health care in decades, and probably the least painful way politically possible to leverage us to further steps down the line after the GOP and their supporters get their heads out of their butts.

Posted by: lauren2010 | January 18, 2011 2:54 PM | Report abuse

Percentage of men and women who survived a cancer five years after
diagnosis:

U.S. 65%

England 46%

Canada 42%


Percentage of patients diagnosed with diabetes who received treatment
within six months:

U.S. 93%

England 15%

Canada 43%


Percentage of seniors needing hip replacement who received it within six
months:

U.S. 90%

England 15%

Canada 43%


Percentage referred to a medical specialist who see one within one month:

U.S. 77%

England 40%

Canada 43%


Number of MRI scanners (a prime diagnostic tool) per million people:

U.S. 71

England 14

Canada 18


Percentage of seniors (65+), with low income, who say they are in
"excellent health":

U.S. 12%

England 2%

Canada 6%

But let's go big government with our health care completely. Our system sucks. Beware of what you wish for, it may come true.

Posted by: KeyserSoze2 | January 18, 2011 2:59 PM | Report abuse

Percentage of men and women who survived a cancer five years after
diagnosis:

U.S. 65%

England 46%

Canada 42%


Percentage of patients diagnosed with diabetes who received treatment
within six months:

U.S. 93%

England 15%

Canada 43%


Percentage of seniors needing hip replacement who received it within six
months:

U.S. 90%

England 15%

Canada 43%


Percentage referred to a medical specialist who see one within one month:

U.S. 77%

England 40%

Canada 43%


Number of MRI scanners (a prime diagnostic tool) per million people:

U.S. 71

England 14

Canada 18


Percentage of seniors (65+), with low income, who say they are in
"excellent health":

U.S. 12%

England 2%

Canada 6%

But let's go big government with our health care completely. Our system sucks. Beware of what you wish for, it may come true.

Posted by: KeyserSoze2 | January 18, 2011 2:59 PM | Report abuse

Keyser: How about a source for those numbers?

Posted by: jtmiller42 | January 18, 2011 3:18 PM | Report abuse

Keyser

Links please. That data is useless without links.

Posted by: lauren2010 | January 18, 2011 3:47 PM | Report abuse

I guess I still don't understand how Republicans, with help from the Heritage foundation, supported the government mandate before, and now they don't. Either they're bowing to pressure from their base (who don't seem to understand the issue), or they're playing politics. I suspect it's both.

As for government involvement, remove it and the entire system (public and private) collapses.

Posted by: nickthap | January 18, 2011 3:57 PM | Report abuse

lauren and jtmiller,

here are some links.

So basically here what we're seeing is for example that at the Countess of Chester Hospital during this specific timeframe 71 people had to wait MORE THAN 17 weeks for whatever specific surgery this was that they had done.

http://www.performance.doh.gov.uk/waitingtimes/2008/q1/index.html


AND on top of that the reforms that are now being done will INCREASE that wait time and also there is question if some type of elective surgeries will be covered at all.

But hey ya let's give it all to the government to do because they do such a bang up job over there and over here there's only about $100 billion per year or so in fraud so give them the whole pie to deal with and then maybe we can get those fraud numbers up to say $300 billion or so.

What a DAY for the fraudsters that would be!

Posted by: visionbrkr | January 18, 2011 4:22 PM | Report abuse

Re Singapore, the degree of government involvement is quantatively high, as Ezra noted. however, it's also qualitatively different - I think there still is major government regulation of physician supply, and there's major government or quasi-government involvement in running and governing all the major hospitals. They may have split all the formerly public hospitals into two quasi-competing chains, but the government involvement is still there. And while conservatives hate and abhor the CLASS Act, the voluntary public LTC insurance program in our health reform, Singapore actually has had a CLASS program, called Eldershield, operating for at least five years. The major difference is that Eldershield is administered by private insurers under government rules.

Posted by: weiwentg | January 18, 2011 4:36 PM | Report abuse

I believe this fact sheet was used, in part, for Keyser's information.

http://www.ncpa.org/pub/ba649

It focuses on Canada verses the United States sometimes including Europe.

Posted by: RisingTideLiftsAllBoats | January 18, 2011 4:37 PM | Report abuse

What part of "private health exchanges" equates to "giving it to the gvmt"?

Please stop pretending our current problems are caused by obamacare.

Obamacare is not perfect, and indeed there will be growing pains, but even the republican Bill Frist says repeal is not the answer and that obamacare has strong elements that need to be built on.

Posted by: lauren2010 | January 18, 2011 4:37 PM | Report abuse

lauren,

I never said that this current version of reform "gives it all to the government" but that is what single payer advocates want. they tout the phantom 3% admin fee of medicare that's a fake number and point to 30-40% admin of insurers (interesting now that most are saying its 20% because of PPACA I guess) and saying, Oh look how much we can save because insurers are administratively inefficient. thats one of the biggest fallacies out there.


I've said before but I guess I need to again that repeal is not the answer. It will not help but again i also don't believe the CBO's cost projections will bear out either.

Posted by: visionbrkr | January 18, 2011 4:44 PM | Report abuse

Ahh, the free-market! The free market has a funny way of working. If you don't do it right, you go out of business. The government on the other hand doesn't have any such concerns.

What all these bloggers and most of America doesn't understand is The only reason some of these big government programs "work" is because the government does not have to, ever, work within a set budget. They simply print money and borrow and borrow and borrow more, paying interest on top of interest and never paying on the principle. We'd all have top notch health care and no finical worries, every single one of us, if we were allowed to follow the government model of doing business. If social security was run by private business it would have been out of business decades ago, same for most other big government programs. We the people have little choice but to live within our means and budget, government has no such worries and therefor these programs that appear to work, in the free-market, wouldn't work at all if government had to follow the same rules as the rest of us. That being said, at some point it will all collapse, when? No one can say. I know you liberals don't believe that, it's all just fear mongering, right? Governments never go under, certainly not America! It's only us little people who go under when we can't pay our bills and our last line of credit is gone.

Posted by: EdSled | January 18, 2011 4:48 PM | Report abuse

As of 2010 93.5 cents of every dollar made by this country is owed to the debt. What do think will happen when it gets to 100%??

Year - Debt in Billions %of GDP
2000 5,628.7 – 58%
2001 5,769.9 – 57.4%
2002 6,198.4 – 59.7%
2003 6,760.0 – 62.9%
2004 7,354.7 – 63.9%
2005 7,905.3 – 64.6%
2006 - 8,451.4 – 65.0%
2007 - 8,950.7 - 65.6%
2008 - 9,985.8 - 70.2%
2009 - 11,909.8 - 84.5%
2010 - 13,561.6 - 93.5%
2011 - 14,200.0 - and climbing

Posted by: EdSled | January 18, 2011 4:50 PM | Report abuse

--*Privatized free markets have utterly failed to solve our health care needs.*--

Weee Ooooooooooooo. You probably haven't lived long enough to remember a free market in health care. It's the *government* programs that are in continual crisis. It's all the disincentives and distortions and regulations imposed on the scrap of what's left of the free market that drives prices at above the inflation rate. The government *needs* the mandate and the new taxes and the new insurance stipulations and the threats of penalties because other *its* programs are headed for insolvency.

Posted by: msoja | January 18, 2011 5:09 PM | Report abuse

"Considering we are all equally likely to get seriously ill, there should be no debate as to the next step: have gvmt step-in to form partnerships with health care providers and insurers to come up with the least painful system we can think of to fulfill our health care needs."


Pretty much this entire statement is an utter lie.

False premise, false conclusion.

But I am glad of course as to the general nature of this post. Liberals from Ezra onward are admitting that universal health care is not a pro-growth policy.

Posted by: krazen1211 | January 18, 2011 6:03 PM | Report abuse

A deluded false dichotomy? There's also the increasing possibility of a two tier system- like the VA, with separate public facilities.

It's really stupid to say "In a free market, people who are sick, or have previously been sick, can't get health-care insurance." Sure they can, they just have to get it before they are sick, or they have to pay more for it. The market provides its own individual mandate- get insurance before you get sick or you can't get it. At some level, it makes sense for people to go on public assistance due to their health care costs. If we make health care cost less, using the ideas I suggest below, we would easily be able to afford to that. As it stands now, we are idiots to add more fuel to the overpriced fire.

What is clearly unsustainable is unlimited funds being given to consumers to purchase goods in something that doesn't resemble a marketplace. It's not a problem that is revolves around a public/private funding option, it's a problem of a distorted market. Overconsumption of healthcare in a non price sensitive fashion and artificially constricted supply is what is causing our high prices relative to other countries (plus overconsumption of carbohydrates, particularly sugar.)

I have to go to the doctor to get a $3 penicillin prescription. Sure, it costs me a $10 copay to visit the doctor- but my insurance plan is giving the doctor $170 on top of that! For 10 minutes of service (and 20 minutes of waiting about) to get what I already had a pretty good idea that I needed. The price of penicillin has actually come down over the years, but somehow, the doctor's rate keeps going up. If I was paying cash, I'd go to a nurse practitioner or something at about $40.

I know people that will drive across town to save a dime per gallon on gas, will drive to different grocery stores to get a deal on eggs, but I don't know anyone with insurance that shops for value. Totally nuts. That's what's broken, and the ACA does NOTHING to fix it. What's missing from our system is consumer visible prices. If we just added those as a starting point, then brought on plans with percentage based copays, then HSA/HDHP plans, we'd be going the right direction on the value of care.

Posted by: staticvars | January 18, 2011 10:33 PM | Report abuse

To the list of federally-funded programs already in existence, we should not forget to include health care through the DOD and VA. Do those who oppose "government-run health care" really want to take away programs for our active duty military, military dependents, military retirees and veterans?

Posted by: lisaplymate | January 19, 2011 12:47 AM | Report abuse

If Briton's health care system is so great why is it failing and why are the Brits trying to create a new system like ours before ObamaCare?

Posted by: mike85 | January 19, 2011 12:52 AM | Report abuse


I joined this website "123 Get Samples" and i got freestuff from it, it took about a week for me to receive? something i actually wanted so just join them and it is easy and free

Posted by: jessicajone18 | January 19, 2011 5:46 AM | Report abuse

I think the free market solution MEANS that there's not universal coverage. Mr. Klein implies that conservatives are trying to maneuver the debate away from universal coverage. When I don't think conservatives have ever been in favor of universal insurance. Universal anything cannot coexist with the liberty to choose.

There's a question I've been wanting to ask for a while that I don't believe many liberals ever think about. Why do health insurers decline to insure some people? It seems that the insurers should always give them an option, maybe a very expensive one, but there should always be a price to make insurance profitable no matter the pre-existing conditions. Are they not allowed to offer very expensive insurance?

Posted by: FroggyJ4 | January 19, 2011 10:36 AM | Report abuse

the stats posted about the US vs. Canada vs. England are laughable. Most of those in the US being compared to Canadians and Brits are on Medicare! Single payer American health care. Come on. Who is most likely to need hip replacement, have adult onset diabetes and serious cancer? Bell curve baby. It's the elderly.

The US trails every developed nation in over a dozen outcomes (longevity, heart disease, cancer, infant mortality, etc), and pays 2-3 times more for those worse outcomes.

Posted by: GreenDreams | January 19, 2011 12:32 PM | Report abuse

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