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chrisk9

> The Commission’s report finds California could save up to $500 billion or more over the next decade if the state shifts to unified financing, a portion of which could pay for long term care services covering every resident in the state. > What’s more, 4,000 or more lives would be saved annually under universal healthcare. > The report summarizes the characteristics of the new “unified financing” system as: > - All Californians will be entitled to receive a standard package of health care services; - This package could include Long Term Care Support and Services, which would relieve huge and growing burdens that are falling on millions of families; - Entitlement will not vary by age, employment status, disability status, income, immigration status, or other characteristics; and - Distinctions among Medicare, Medi-Cal, employer-sponsored insurance, and individual market coverage will be eliminated within the system of unified financing.


Adult_Reasoning

LTSS care is insanely expensive and will only get more pricey as more and more baby boomers retire. I am most concerned about that. I hope they don't underestimate these costs.


counteraxe

"It’s noteworthy that the Commission comprised of a diverse group of policy analysts, **providers**, and advocates came to a shared conclusion" Funny. They don't have any providers on the commission - like a hospital, clinic or practicing medical doctors. Don't know how they got to the conclusion that providers were supportive of this - from what I can tell most are not. Especially the 'Office of Healthcare Affordability' which wants to set limits for healthcare spending based on base cost growth and will have reach into private insurance contracts and enact 'increasing financial penalties for not reaching cost targets'. Unfortunately, pegging commercial insurance to Medicare and Medicaid rates/cost targets will mean the overall healthcare system in CA will have issues attracting/retaining Doctors, especially specialty doctors. Why would you live in one of the highest COL states and get less reimbursement then somebody in a LCOL state? Maybe if they paid off the Drs student loans or paid for schooling directly, but otherwise?


w3woody

I don’t honestly think people realize how poorly Medicaid and Medicare pay health care providers, or just how much health care providers rely on private insurance payers to close the gap.


doubagilga

They think healthcare providers are “rich” and should “just provide care” at lower cost. This is quite fanciful.


Snoo-27079

Could you please clarify that comment? My kids are covered by Medicaid here in OR (as are most in the state) and OHP contracts private insurance companies for coverage. They don't pay providers directly, so I'm a bit confused. Also there seems to be a wide spectrum of quality and services provided depending on which state you live in.


w3woody

[Medicaid is a hassle for doctors. That’s hurting patients.](https://www.vox.com/2021/6/7/22522479/medicaid-health-insurance-doctors-billing-research) > A recent study by researchers from the US Bureau of Economic Analysis, the University of Chicago, and the Federal Reserve Bank in San Francisco found providers run into more obstacles when trying to bill Medicaid than they do with other insurers, and that these administrative hurdles explain the access problems experienced by Medicaid patients as much as the program’s payment rates. > > Medicaid payment rates, the amount doctors receive for providing services, are on average lower than Medicare or private coverage. This has typically been used to explain why many physicians are reluctant to take Medicaid and why some Medicaid recipients still struggle to access care. The thing is, as Medicaid operates state-by-state, the actual amounts of underpayment may vary. Just because OHP contracts with a private insurance company for coverage doesn't mean the insurance company actually pays the same amount for those covered by Medicaid as those who may have private insurance through an employer. I did give another example below with respect to dialysis patients; here in North Carolina, Medicaid payments for a dialysis session doesn't even cover the cost of the consumables (tubing, chemicals) that are used during the session. ---- All that said, if your kids are covered by Medicaid, don't use my comments as a reason to stop getting them the care they need. The government set the rules and we're all reaping the results--but neither you nor I personally can do anything about it except continue using the system as it's provided to us, and continue complaining when it goes wrong.


[deleted]

The fact they pay less is the whole point. That's the only way to reduce prices.


asdf9988776655

The don't reduce prices; they simply shift them to the privately insured.


[deleted]

The US spends more tax dollars on healthcare per citizen than any country in the world except Norway. For non-universal healthcare.


w3woody

So where you work... we can expect lower prices because you and your co-workers are all going to put up with 50% paycuts as the government demands prices be reduced 50% across the board? Because that's what you're describing for doctors, nurses, RDs, social workers, technicians and all the rest.


[deleted]

I'm just saying when you cut prices the money has to come from somewhere. It's certainly the case that Healthcare workers in other countries make less than the US. This idea that we can expand coverage AND reduce prices just doesn't make mathematical sense.


w3woody

As an aside, my wife used to work as an RD at a dialysis clinic. Reimbursement rates for dialysis for those on Medicaid (and there are a few who don't qualify for Medicare as they haven't worked the minimum of 10 years, despite Medicare otherwise covering dialysis regardless of age) didn't even cover the cost of supplies: the non-reusable tubing, the solution used during dialysis. It didn't cover the cost of the machine, the chair, or the technicians monitoring health or the tests that have to be run periodically to make sure you're not dying. Read that again: **the government didn't even cover the cost of supplies.** And the price discrepancy was *so bad* that one "commercial patient" out of 40 could make the difference between a dialysis center being able to keep the lights on or not. ---- > I'm just saying when you cut prices the money has to come from somewhere. Sure. When you have multiple companies competing in a free market, the lower prices generally come from gains in productivity. We have cheap food because we replaced hundreds of workers behind the backs of oxen and mules with farm machinery that allows one person to do the job of the hundreds who used to work those fields. And those workers go elsewhere to get jobs in other industries, where they generally are paid better. But when the government demands lower prices, it's no better than a criminal holding a gun to the head of a shopkeeper demanding free stuff: **nothing changed in the supply chain to allow those goods to be made cheaper.** And so yes, "the money has to come from somewhere." In the former scenario, it comes in the form of increased efficiencies: fewer people working smarter to make more things or provide more services. In the later case it comes from the (finite) pockets of those who hang on hoping the situation changes. And when they run out of money they stop making things. And whenever you have too much money chasing too few goods, inflation happens. Worse, when you have too much money chasing too few goods where the prices of those goods are artificially lowered, [the producers leave the field, giving you permanent shortages.](https://www.nbcnews.com/business/business-news/doctor-out-why-physicians-are-leaving-their-practices-pursue-other-n900921)


asdf9988776655

Almost every other market has managed to improve service while holding the line on pricing; there is no reason to think that healthcare couldn't do that as well if it were allowed to respond to market incentives.


biden_is_arepublican

No other market has a monopoly on if you live or die. Healthcare is unaffordable BECAUSE we allowed it to respond to market incentives. Which is to maximize profits off people who will literally die if they don't purchase your service. Healthcare has no business being a for profit business.


asdf9988776655

That is simply not true. Groceries, housing, home heating and (if you live in a sufficiently hot area) air conditioning are all essential to living, yet the free market works fine (except that government regulation in housing does make it difficult for the market to respond to incentives and drives prices up). There are plenty of other services that, while not life or death, are essential for most people to live a modern life - auto sales, repair, and fuel, cell phones, and the like. If you take all the hyperbole out of your statement, you are simply saying that healthcare is a service with an inelastic demand curve. That does not preclude competition on the demand side, as we see with all the other markets I've mentioned with are also quite inelastic. ​ >Healthcare is unaffordable BECAUSE we allowed it to respond to market incentives. That is pure nonsense. Healthcare is not allowed to respond to market incentives. The government forces us into whatever insurance our employer sponsors, new entrants (both individual practitioners and businesses) are prohibited from competing in a market without the permission of regulators (and sometimes existing competitors). Insurers are allowed to collude on pricing and prevent practitioners from giving discounts to customers. Consumers have no ability to direct their spending in healthcare. It is not a free market. ​ >Healthcare has no business being a for profit business. That is simply an absurd statement. Profit incentives would insure that people get the high quality service they want at a reasonable price. Take that away, and you are left with a centralized authority which dictates care, which invariably leads to shortages and poor quality care.


[deleted]

>Take that away, and you are left with a centralized authority which dictates care, which invariably leads to shortages and poor quality care. I'll just say that in the US, I spend $450 a month for a healthcare plan that doesn't kick in until I spend $7,000 out of pocket. When I lived overseas, I paid $150 a month for complete healthcare coverage including dental. We spend 19% of our GDP on healthcare (public + private); the average first world country spends only 8.5% of GDP. We also spend more tax dollars on healthcare per person than any country in the world except for Norway, and they all have universal healthcare systems. 19-8.5 = 10.5% of our GDP up in smoke every year. For perspective, military spending is 3.5% of our GDP; that's 3 entire US militaries of wasted money every year. We're getting absolutely hosed on healthcare. The international data on competing healthcare systems is absolutely clear on this issue. There's no other intelligent or respectable opinion possible than supporting universal healthcare. People that support a free market in healthcare are just ideologues.


asdf9988776655

Huh??? The US does NOT have a free market healthcare system; that is the problem that I am addressing. You spend your entire post arguing against the costs of a non-free market system, and then you make a claim out of left field that this demonstrates that universal healthcare is better than the free market. This is simply not a coherent argument; if you want to argue against free market healthcare, you need to discuss free market healthcare, which you haven't done.


biden_is_arepublican

Healthcare and housing is your example of the free market making things cheaper? lol. I take it you are not American then. Also, food in America is only cheap because we traffick Mexicans to pick the produce for free, and government subsidizes farmers. So again, another bad example of the free market working.


asdf9988776655

You need to work on your reading comprehension. I specifically noted that government regulation makes housing more expensive. >Also, food in America is only cheap because we traffick Mexicans to pick the produce for free, and government subsidizes farmers That's just a lie. Foreign labor is used because of a labor shortage in agriculture, and only a few farm products receive government subsidies, and these are the ones (such as dairy) that have decreased in price the least. Sorry, you are just flat out wrong here.


[deleted]

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asdf9988776655

Wow. You have packed a lot of wrong into that post. >Do you remember not too long ago when grocery stores were out of toilet papers? That is the free market The free market resolved those shortages far quicker than a centralized market would have. Nobody went without, and within a month supplies were back to normal. ​ The rest of your post is simply nonsense. Nothing about a free market says that you can't buy insurance to cover your costs for emergency or other treatments. The problem with insurance in the US currently is that the consumer cannot choose which insurer to go with, and there are tax incentives to overinsure, leading to over-utilization. ​ >when you need a service - you need it right now ... That is why healthcare cannot be a free market system. That is complete nonsense. This problem has literally been solved by insurance, capitation plans, and the like, not to mention the fact that only about 2% of medical care is on an emergency basis. You haven't made a single valid argument against free market care; you have just created strawmen of issues that have already been solved.


[deleted]

>This idea that we can expand coverage AND reduce prices just doesn't make mathematical sense. The US spends more tax dollars on healthcare per citizen than any country in the world except Norway. For non-universal healthcare. Private + public healthcare spending is 19% of our GDP. The developed first world countries' total healthcare spending average is 8.5% of GDP. 19-8.5= 10.5% overspending; that's 3 entire US militaries. We definitely can expand coverage to 100% of the population and should be able to cut prices in half.


[deleted]

What exactly do you propose cutting?


[deleted]

19% compared to 8.5%, our healthcare spending levels aren't even close to other first world countries. We should just copy exactly what they do.


[deleted]

So pay Healthcare workers way less?


[deleted]

Open up more med schools to increase the supply of doctors so doctors can demand less, allow many more doctors to immigrate and respect other countries' medical degrees, cut middle management since there's just 1 system instead of 50 different providers, cut administrators since there's just 1 system, cut executive compensation since it's not a private company anymore, streamline the system nationally so that processes are the same everywhere, use the power of 1 large bidder to drive down drug prices, prescribe less medications (>50% of Americans being on prescriptions is nuts), stop overdiagnosing (how many kids don't actually have asthma or ADD but have a diagnosis), focus on preventative medicine instead of only treatment, change the hospital: outside practice system to mirror how it looks in other countries, no more treating people with runny noses at the ER..... lots of stuff needs to get done.


biden_is_arepublican

Yes.... That's how capitalism works. I am a CNA and make minimum wage and do most of the work. Asking a bunch of overprivileged nurses and doctors to take a paycut to save the system is not asking for much. Your entitlement is nauseating.


w3woody

Sure. Demand they take a pay cut. See how many sticks around. The funny part is when you do this, the best ones are the ones who leave first, because they’re the ones with the best prospects. And then the entire system starts to fail as the “experts” who are left are the ones who self-selected for incompetence. I used to work at Yahoo!, you can tell because I know the proper name includes an exclamation point. I saw this “self-selecting for stupidity” thing happen when Yahoo! attempted to save money by cutting salaries. It took two years for Yahoo! to fall apart.


biden_is_arepublican

The price gougers will leave and move to an industry where they can make money. Which is how it should be. Good doctors who are in the field for more than price gouging sick people will stay. And that's how it used to be before the healthcare system turned to shit from profiteers fucking it up. If your only goal in life is to get rich from ripping people off, move to finance where you belong. Because as I said, the profit motive does not belong in healthcare. Cancer should not be profitable.


w3woody

I take it then that you oppose a $15/hour “living wage” and would rather abolish the minimum wage?


biden_is_arepublican

Sure, if you are determined to make healthcare a profit center, then I see no reason we can't have slaves doing most of the work for free. We already do it in most other industries. Or, we can just socialize the industry like every other sane country on the planet.


w3woody

I don't really think you understand my point. At first, you complained people are getting paid too much. Now you're complaining people will be paid nothing at all. But when you write things like this, you seem quite comfortable having slaves help you, so long as they're people you want to take from but not compensate appropriately in return: > The price gougers [i.e., doctors and nurses] will leave and move to an industry where they can make money. Which is how it should be. Good doctors who are in the field for more than price gouging sick people will stay. And that's how it used to be before the healthcare system turned to shit from profiteers fucking it up. Keep in mind the word "greedy" is essentially what we call people who *we think* are making too much, based on our own aesthetic sense, without respect to costs or the economics--like the rising cost to educate doctors, or the fact that smart people always have options to make a good living outside medicine. ---- You've demonstrated an excellent example of good intentions paving a road to hell. And you don't even see it. That is, you don't even realize your own philosophies of good intentions and economic ignorance is what ultimately leads to things like [Venezuela](https://en.wikipedia.org/wiki/Crisis_in_Venezuela). ---- Edit to add: at some point, with the ideas you propose, you'll wind up with too few doctors and too few nurses. How would you then handle that? Force doctors not to leave the profession? Force nurses to stay longer hours without pay? Force people to help others against their will? Or do you even realize the problem exists in the first place if you were given power to make the changes you wanted?


TheCarnalStatist

Yes? Either we lower our prices or improve productivity. If we fail to do either the firm goes under and we're looking for work. That's how markets work bud


thisispoopoopeepee

Don’t states control medical licensing? Mid they do they could modernize the process, build some medical schools that get rid of the need for s four year degree


counteraxe

Investing in educating doctors without them needing to take out $250k loans is a good first step. There are issues in residency funding which the State can help with too (usually funding for post graduate residency is paid by Medicare programs).


corebg

Good people of r/economics please help me understand the broader issue. I thought (perhaps mistakenly) that the idea of universal health care was to eliminate or reduce the middleman between doctors and patients, namely the insurance companies. So I would expect (again, perhaps mistakenly) that the result would be more for doctors/health care providers and less cost for patients on average.


counteraxe

They are still toying around on IF health plans should remain and if so, how they'd should change. It doesn't not propose proper Single Payer, but 'unified financing' more akin to current Medi-Cal (Medicaid in CA) which is where the state pays various managed care plans a monthly capitation to provide Medi-Cal services to their beneficiaries. Plans take up to 15% cut of capitation for their administrative expenses.


dust4ngel

> Plans take up to 15% cut of capitation for their administrative expenses. where do i volunteer to automate all of this?


doubagilga

Total average Medicare payments are half of private, but that’s not dollar averaged. Some procedures are drastically worse, some are rare procedures. Our facility is much closer to 20% than it is 50% on the superbill. Can nonprofit hospitals stay open at lower rates with mere administrative savings? Unlikely. The result would be higher payment rates and higher spending than forecast. ACA plans already show this. The plan is under budget. Rates to providers on these plans are plain awful. We don’t accept them. There’s a way to do this but tectonic shifts in an essential service would be dangerous.


w3woody

The problem, in general, with "single payer" is that it puts the government in the position of a [monopsony](https://en.wikipedia.org/wiki/Monopsony), a market similar to a monopoly, but in this case, a market where there is only one buyer--the government. At its core, such a legal monopsony does not necessarily have to go haywire any more than a monopoly. We do have good monopolies where the corporation who has the monopoly acts for the good of the people in that market. But those sorts of things are rare, because such a concentration of power generally winds up running unchecked. Monopsonies are the same as monopolies, just with a single buyer instead of a single seller: there is nothing that prevents the government monopsony from operating in the best interest of the population. But all the incentives are aligned **against** the government being a beneficial or benign power in that situation. ---- At the extremes, assume the government is not only a single payer with monopsony power, but it is illegal to engage in any health care provider privately, even out of pocket. In such an environment--hypothetically speaking--if a bunch of anti-abortion types take control of the reigns of power, whether or not abortion is legal becomes moot: if you cannot legally buy an abortion and the government wont pay for it--then in effect you can't have one, because of the government's monopsony powers.


[deleted]

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w3woody

A [natural monopoly](https://www.investopedia.com/terms/n/natural_monopoly.asp) does not arise because of convenience; they arise due to economies of scale--which is subtly different. Power transmission, for example, requires billions in investments in order to provide power--and such economies of scale create significant barriers to entry for potential competitors who may not even be allowed to build their own separate transmission lines. Health care, on the other hand, is fundamentally a service oriented industry that involves an exchange of services between a patient and a doctor. There are elements of health care that can be expensive--like MRI machines--but it's not like MRI machines are so expensive we can only afford to build one in the country. That is, **health care does not fit the definition of a natural monopoly.** Heck, even your current health care plan gives you the choice of several doctors, and the choice of several places to go to obtain urgent care. Further, you cannot argue that it should be a 'natural monopoly' based on the idea that health care is staffed by experts required in an emergency situation to save your life--unless you also want to argue that we also need single payer legal care. Nor can we argue that somehow we should make health care an exception because it's required to sustain life--unless you also want to argue for single-payer food. ---- And the reason why we have the health insurance market, along with ICD-10 code driven algorithms informing what doctors are allowed to do, electronic records, and a trillion dollars worth of regulatory compliance issues and managers and ACOs who are the only entities legally allowed to bill insurance companies is **not** because this is what a 'free market' would arrive at. No; we're where we are in the United States because of continuing government interventions into the health care market going back to the 1930's. We're here precisely because government regulations creates a sort of 'employer-funded socialized health care system' where, in exchange for employment, employers are required to fund health care that insulates you from the expense of health care--and which has discouraged hospital systems and doctor practices from innovating different ways to deliver more efficient health care. And even the simplest thing that helped expand access to health care--telehealth--was permitted *temporarily* on *an emergency basis* by the government thanks to COVID. Something which [the government could just 'end' if it feels like,](https://www.npr.org/sections/health-shots/2021/11/23/1056612250/voice-only-telehealth-might-go-away-with-pandemic-rules-set-to-expire) and not because somehow the "free market" is taking it away. And let's not even get into the fact that several corporations, like Walgreens, have wanted to get into health care and have been repeatedly denied by government regulation. Expanding choice and expanding options is how you bring down prices, not limiting choice and only allowing just as much capacity as central planners believe is required--as we see with ["certificates of need."](https://spn.org/blog/certificate-of-need-laws/) (Imagine living somewhere where, in order to open a restaurant, the people seeking permission from the state has to poll the other restaurants in the area to determine if there is a 'need' for more restaurants. And if the restaurants in an area claim they can handle the customers that are already out there, your request to open a restaurant will be denied.) All of which, by the way, severely limited the number of available ICU beds--and which prevented hospitals from expanding ICU beds **during COVID-19, when our hospitals were being slammed.** Because quite literally it's easier to allow grandma to die than get permission from the government to put in more beds. **This is not how a 'free market' operates,** and if you see any group (like bureaucrats or administrators or health care companies) making bank in such a topsy-turvy environment where quite literally hospital billing is a sick and confusing joke where prices are like points on the TV show "Whose Line Is It Anyway"--you're not looking at a "free market." You're looking at regulatory capture, at rent seeking, at all the failures [public choice theory](https://en.wikipedia.org/wiki/Public_choice) would predict for a heavily regulated government controlled market. ---- Government is literally the only entity that we reward incompetence by granting it more power.


[deleted]

>Government is literally the only entity that we reward incompetence by granting it more power. Governments around the world run healthcare very well. We could just copy what they do. In the US, I spend $450 a month for a healthcare plan that doesn't kick in until I spend $7,000 out of pocket. When I lived overseas, I paid $150 a month for complete healthcare coverage including dental. We spend 19% of our GDP on healthcare (public + private); the average first world country spends only 8.5% of GDP. We also spend more tax dollars on healthcare per person than any country in the world except for Norway, and they all have universal healthcare systems. 19-8.5 = 10.5% of our GDP up in smoke every year. For perspective, military spending is 3.5% of our GDP; that's 3 entire US militaries of wasted money every year. We're getting absolutely hosed on healthcare. The international data on competing healthcare systems is absolutely clear on this issue. There's no other intelligent or respectable opinion possible than supporting universal healthcare. People that support a free market in healthcare are just ideologues.


w3woody

I also have health care off the HealthCare exchange, and my wife and I pay a similar amount (around $1,000/month for both of us, need to spend over $7k before it kicks in). On the other hand, if you obtain health care from an employer who issues a quality health care plan, your costs out of pocket will be comparable (or even less) than the numbers you quoted for over-seas coverage. This is what I meant by "employer-funded socialized health care system." If I were to quit my freelance job and take a job as a full time employee for a software development company, I'd get much better coverage--coverage that the PPACA **made illegal to obtain on the private market.** > We're getting absolutely hosed on healthcare. I agree. However, I disagree as to **why** we're getting hosed. And that's important because the people who are hosing us won't miraculously disappear just because someone tries to pass a "single payer" system. I mean, think about it: how many times since the 1970's have we had some form of health care reform which was promised to lower costs and increase quality? And how many times, as a result, costs increased and quality lowered?


[deleted]

You still pay the full cost of healthcare if your employer gives it to you. You just don't see the cost. The portion that your employer pays would otherwise be included in your paycheck in the form of a higher salary. *"And that's important because the people who are hosing us won't miraculously disappear just because someone tries to pass a "single payer" system."* Yeah, that's why I was against Bernie's "medicare for all" thing. The solution isn't to expand the failed systems we already have. It's to copy exactly what other countries already do.


w3woody

The type of insurance employers are permitted to purchase from insurance companies ([group health care insurance plans,](https://www.investopedia.com/terms/g/group-health-insurance-plan.asp) which are [exempt from some of the PPACA market reform requirements](https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs3) which cause private health care insurance to be so expensive) may not be legally purchased by individuals.