Or a 10% rate increase in income tax across the board and the insurance companies sell only private insurance - like the rest of the world.
Any thoughts on why California didn’t take that route?
DB2
Except that the numbers don’t work out, because our cost structure isn’t like the rest of the world.
U.S. income tax receipts are about $2.6 trillion. But our current private insurance health expenditures are about $1.3 trillion. So you’d have to increase income taxes by 50%, not 10%, to cover that if you don’t slash reimbursement rates. And that’s before we start to cover the added costs of covering the uninsured and eliminating the “discount tiers” of Medicaid and Medicare and start paying everyone the same reimbursement rates.
These proposals don’t fail at the idea of switching premium payments to tax payments. They end up failing when politicians have to deal with the actual numbers involved.
I agree with this but for somewhat different reasons. in 2022, $300B was spent on direct health costs for diabetes in the US. About $200B was spent on direct health costs for heart disease. In comparison, the Medicare budget is about $900B. About 12% of Americans have diabetes. About 7% have coronary heart disease. That rises to 48%(!) of adult Americans with some form of cardiovascular disease if one includes high blood pressure.
No universal health care system is financially viable for a population that is this unhealthy. Providing health insurance for such a sick population (primarily due to the startling rise in obesity) is like providing car insurance to drunk drivers. Simply not affordable.
I tend to be a numbers guy, and as far as I can see, the only way to provide affordable health care for most Americans (let alone universal) is to heavily tax the stuff that causes obesity and/or tax the obese.
If one wants affordable universal health care, you first have to have a reasonably healthy population. Any health care system will work in Japan. None will work in the current U.S. We probably could have established a single payer system in the 1960s. Don’t think we can afford to today. Just not healthy enough.
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That is why it such a problem for them. If they say “no”, then they have zero patients any more. Hospital with zero patients = no income = CLOSED. What do they do next?
Or they can choose to have patients in the hospital–paying LESS, but getting paid for ALL of them means no more freeloaders. So overall profit per capita is higher.
Why would they have zero patients?
If a bidder on a national insurance contract is demanding that the JC’s that own hospitals and/or their CEO’s take massive pay cuts so that the bidder can win the contract, then all the hospitals would say no. No one’s going to sign up. And the bidder wouldn’t be able to bid (or wouldn’t win the bid).
Heck, even a single (or small handful) of hospitals can end up wrecking the bid. Miami-Dade County (where I live) only has 14 hospital groups for a population of about 2.7 million people. Collectively, there’s just under 8,000 in-patient beds - of which about 1,700 are within the hospital system of the single largest private operator. If that operator chose to say “no” to a bidder, they’d never be able to cover the area.
There’s no way this would work out the way you think it would. The winning bidder would almost certainly be the one who met the health care providers where they are, promising to meet the reimbursement needs of their current financial situation. That would be the only bidder that would be able to stitch together enough participating providers to offer full geographic coverage. I mean, even that’s a fanciful notion - there’s no way any bidder could actually solve the collective action problems involved - but if a responsive bidder did emerge it wouldn’t be one that was proposing big cuts to reimbursement rates.
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If the JC gave up govt patients and went private ONLY, that is their choice. The problem with your argument (or lack thereof) is simple: If “going private” was a good idea NOW, then it was also a good AND PROFITABLE idea years ago. So why did the JC not “go private” years ago? Because it was not then, and is not now, a viable business model. The choice TODAY would be to close, “sell out” to the PROFITABLE govt contract, or take a flier on going private.
So you are saying ALL the hospitals would “go private”. So how does the public get health care at a hospital of which they are NOT a participant?
I’m not saying that at all. All the hospitals currently accept a mixed of public patients (Medicare and Medicaid) and private insurance and self-pay.
If the government nationalized health care insurance or created an NHS-style single-provider system, they would participate, of course.
But if the government instead opens up a bidding competition, where providers get to choose which of competing bidders they elect to sign up for and those bidders are required to assemble a complete network of providers in order to be responsive to the bid, then the providers have a lot of power in those negotiations. They’re not going to sign up with the bidder whose bid requires them to cut their revenues by 20% (to pick a number) and force the cost onto the JC’s. They’re going to sign up with the bidder who maintains the current overall level of reimbursements - or even increases it. That way, no one’s rice bowl gets threatened.
So the bidders who are offering below-market reimbursement rates can’t get any providers to sign up, while the bidders who offer at-market reimbursement rates or higher get all the providers to join.