Employer Provided Health Insurance Delenda Est

My last post didn’t really go into why I dislike the way we do health insurance so much.

Of course, there are the usual criticisms based on compassion and efficiency. Compassion because poor people can’t get access to life-saving medical care. Efficiency because it’s ruinously expensive compared to every other system around. I agree with these arguments. And they’re strong enough that asking whether there are any other reasons is kind of like the proverbial “But besides that, Mrs. Lincoln, how did you like the play?”

But I had already internalized the compassion and efficiency critiques before becoming a doctor. After starting work, I encountered new problems I never would have expected, ones which have yet to fade into the amorphous cloud of injustices we all know about and mostly ignore. Most of my patients have insurance; most of them are well-off; most of them are intelligent enough that they should be able to navigate the bureaucracy. Listen to the usual debate around insurance, and you would expect them to be the winners of our system; the rich people who can turn their financial advantage into better care. And yet barely a day goes by without a reminder that it doesn’t work this way.

Here are some people I have encountered – some of them patients, some of them friends – who have made me skeptical that our system works for anyone at all:

— The elderly man who had a great relationship with his last psychiatrist, who saw him for twenty years, and who knew every detail of his issues. He switched jobs, got a new insurance, the old psychiatrist was no longer in network, and so he had to see me instead. I know nothing about him and it will take several evaluation sessions before I can even consistently remember who he is and what he needs from me.

— The businesswoman who was seeing me and doing well until the HR person at her job told her that she didn’t need to submit any forms to renew her insurance that year. That turned out to be wrong, and she missed The One Month Of The Year When You Are Allowed To Renew Insurance. She lost her insurance and can’t afford to keep seeing me.

— The bipolar man on a very important daily medication. He changed insurance plans. The new insurance refused to pay for his drugs until they got a form explaining why he needed the medication. I sent in the form. They said they couldn’t find the patient in their system and so couldn’t process the form. We argued about this for several days, during which he ran out of medication and decompensated.

— The would-be entrepreneur who wanted to save up enough money to live on for a year or two, quit her dead-end job, and start a startup – but who wouldn’t be able to afford health insurance outside of her dead-end job’s plan. She is still at her dead-end job.

— The young gay man with conservative religious parents. He had a supportive friend group and should have been able to come out to his parents without caring what they thought – except that he’s on his parents’ insurance and has no good alternative. He remains in the closet.

— The young woman in a not-quite-abusive but far-from-acceptable marriage, who stays in it because she’s on her husband’s insurance and has no good alternative.

— The depressed guy who was doing well on a complicated antidepressant regimen for a while, changed insurances, and was too depressed to do the work of finding a new psychiatrist. Now he comes to me saying it’s been five years, he’s been depressed all that time, and he would like to get back on the medications that he knows work well for him.

— The endless train of patients I saw when I worked in a hospital emergency room, whose stories started with “So I lost my insurance, but I figured I could get along fine without the medication…”

— The other endless train of patients I saw when I worked in a hospital emergency room, whose stories started with “So I lost my insurance, but I was smart, and I had saved up a stockpile of my medication, and I figured, how hard could it be to manage it myself without a doctor’s advice…”

— The other endless train of patients I saw when I worked in a hospital emergency room, whose stories started with “So I changed insurance, and I got a new doctor, and he said he didn’t see a good reason why I had to be on this medication…”

— The Oklahoman who wants to move to California where he has more friends and better job prospects, but he’s on Oklahoma state insurance for the needy. Although California also has a state insurance for the needy, there is no way to figure out whether it will accept him or cover the care he needs other than by moving to California, applying, and seeing what happens. Also, the application process takes weeks to months, during which time he will not have either state’s insurance (though California promises he will get reimbursed for care he gets during this period later). He decides to stay in Oklahoma.

— The well-off Oklahoman with good private insurance who visits California on a business trip, gets sick, and finds that surprise! his Oklahoman insurance doesn’t have any in-network providers in California and he has to pay $20,000 out-of-pocket for care.

— The depressed guy who was in remission for years and had a great job with great insurance. Then he had a relapse, became too depressed to go to work, got fired, and lost his insurance right at the moment when it finally could have been useful for him.

— The woman who had a minor breakdown and was brought to the hospital by police. The hospital admitted her against her will, on the grounds that her minor breakdown sounded potentially dangerous, treated her, and released her. Her insurance refused to pay, on the grounds that it was just a minor breakdown and didn’t really require hospitalization, by the standards of This Particular Insurance Company. She is on the hook for the entire cost of the involuntary hospitalization.

— Anything involving Kaiser [EDIT: I’m getting some pushback on this who say Kaiser is good at everything except mental health; I only deal with them in a mental health capacity so I can’t speak to this]

— The trauma victim who needs trauma therapy – which means reliving all your traumas in order to come to terms with them – but is reluctant to start because her work situation is unstable. She knows that if she changes insurance, she’ll have to restart the therapy from the beginning and relive all her traumas all over again.

— The young schizophrenic man who is on his parents’ insurance. Because so many schizophrenics are poor, all of the expertise in treating schizophrenia is concentrated in Medicaid clinics. But a rich kid on his parents’ excellent insurance can’t access Medicaid, he can’t go off his parents’ insurance for other reasons, and he can’t find any private psychiatrists who know how to treat his particular schizophrenia-related complications. I am sure there is some good solution to this which I am missing, but I haven’t been able to find it and his family hasn’t either.

— The anorexic woman who has Blue Cross, and the only good anorexia therapist in town only takes Aetna. The sex-addicted man who has Aetna, and the only good sex addiction therapist in town only takes Blue Cross.

Any other system would fix these problems. A public system like Medicare For All would fix them. A communal system like the Amish have would fix them. A free market system like our grandparents had would fix them. The prepaid doctor cooperatives Reason talks about would fix them. A half-assed compromise like Joe Biden’s Medicare For All Who Want It would fix them. But here we are, stuck with a system that somehow manages to fail everybody for different reasons.

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465 Responses to Employer Provided Health Insurance Delenda Est

  1. pianom4n says:

    Can you expand on Kaiser? I’ve had nothing but positive experiences and everything is seamless. I’m guessing that it’s very painful to switch away?

    • I also had great experiences with Kaiser. The problem is going out of network – if someone on Kaiser wants to see Scott, it will be a miserable experience for them, and chasing Kaiser into paying even the part they are supposed to pay for out of network services is going to be a nightmare for Scott, since they aren’t actually interested in having people go out of network – everything should be able to be done in-network. Unless you’re visiting from a different Kaiser region, in which case there is a weird reciprocity system that I don’t understand despite using it repeatedly.

      They also have some very specific protocols for what can be done for patients, based on their health economics models. I’d guess that those models and protocols are at least in part non-public, so if you’re not a Kaiser doctor, you just have to guess what they will cover, and what they require to have been done first. That means Scott might want to prescribe medicine X, and have Kaiser simply say no, we won’t cover it. They might actually be willing to cover it if they have an evaluation that says that medication Y which Scott didn’t even consider because it would be a horrible idea for this patient isn’t appropriate – but Scott doesn’t know what needs to be done to allow that, so the medication isn’t covered. I had almost this happen when I said that I wanted to continue to take Wellbutrin for ADHD. The psychiatrist said that it made sense, but protocol said they needed to try first tier medications first. I talked to him for 2 minutes, listed what I had used in the past, and he said, “Oh, OK, then Wellbutrin is fine, I’ll put it in.” Scott probably can’t do that, since he’s not in-network.

    • krum_bunny says:

      More specifically, is Kaiser bad because it’s not part of the broken insurance system? Or is Kaiser bad just because they’re simply a bad provider? I’m not sure how Kaiser being bad works into your argument to abolish US style insurance. Or do you view Kaiser as a regular insurance company?

      Personally I’ve found Kaiser care to be fine, at times excellent.

      I think the Kaiser example is important. My understanding is that they are a different model than the rest of the insurance system and similar administratively to some proposals. Within the Kaiser system it functions similar to Single Payer. The VA is another example. If the care in these systems is poor then I don’t see how you can pin that on Insurance Co vs Provider dynamics. Some other constraint, for example overall cost, must be at work.

      • eh says:

        Under the Australian single-payer Medicare system, I’ve never had to worry about turning up to a doctor and finding out they’re out of network. The closest thing is finding a bulk-billing clinic, which is a clinic that won’t charge you anything on top of the standard government payment. Even at clinics that don’t do bulk billing, no Australian doctor has ever charged me more than $200 on top of Medicare, which is well below my co-pay in the US.

        I think “within the Kaiser system” does a lot of heavy lifting here.

    • patuary says:

      Others have implicitly touched on this, but I have always had Kaiser during my adult life. There are two big nice things about Kaiser:

      1) The doctors and the insurance operation are under the same roof (figuratively), so a lot of the frictional effort/battles you might ordinarily see between the two do not apply if you’re a Kaiser patient. I never go to Kaiser and worry that there will be some kind of out-of-network snafu, arguments/delays, etc.

      2) Everything else is under the same roof (literally). No more seeing one doctor in one part of town, then driving to a lab across town, then back to a specialist in the first part of town, etc.

      I kinda/sorta feel like this is closer to how a more single-payer/single-system health care experience might be like in another country, except Kaiser isn’t exactly cheap.

      • Alsadius says:

        I kinda/sorta feel like this is closer to how a more single-payer/single-system health care experience might be like in another country…

        I’m in Canada. My doctor, dentist, eye doctor, pharmacy, blood testing lab, and hospital are in six different buildings. You can get three or four of them together if you optimize for that – there’s a lot of suburban low-rise offices that are full of medical specialists of various sorts plus a ground-floor pharmacy – but I suspect that’s also a thing in the US. They’re rarely the doctors you wind up seeing together, in my experience.

      • scj1091 says:

        For me I feel like both of those are dramatically overshadowed by the difficulty of getting primary care and getting specialist care (you know, two minor things that don’t happen often). The vast majority of KP doctors in my area (pre-COVID) were 6-12 weeks out for appointments. This means that unless your concern is trivial and you can wait months, you have to go to urgent care and see <generic doctor>. Which means I’ve been a Kaiser “customer” for 5+ years and seen my PCP…once. The exact opposite is also a problem – you can’t see a specialist either. I had foot pain. I needed to see a specialist to diagnose the cause and make a recommendation. So of course I needed to see my GP first so she could say “yup, you have a problem. You should see a specialist.” Which meant urgent care again, followed by a 6 week wait for a specialist. I’m at the point where I may ask my employer if he can put me on a cheaper KP plan that’s more like a high deductible plan in exchange for some reimbursement of costs and I’ll just go back to my old GP from when I was on Anthem, who has now converted entirely to concierge medicine. I tried to get an appointment to see a psychiatrist with KP and it took 4.5 months to get a referral. I paid out of pocket for that too since I didn’t feel like 4.5 months of uncontrolled panic attacks would be good for my mental health. I feel bad for anyone who needs urgent mental health care and can’t afford to pay out of pocket. Having or faking a crisis that results in hospitalization would be about the only way to get care.

        And of course as you point out, all that “efficiency” doesn’t actually save you money, KP is stupid expensive.

        • ana53294 says:

          That’s how medical care works in Spain (except for appointment with primary care doctors, that is).

        • cuke says:

          I’d be interested to hear other people’s experience in getting in to see specialists of any kind — psychiatrists or podiatrists, whoever. I have excellent insurance that puts me in-network for basically all providers who aren’t concierge, and while I don’t have to wait to get in to see my PCP, I’ve never seen a specialist sooner than 8-12 weeks out. The bottleneck in specialists doesn’t seem to be related to insurance in my experience. Because I’m a healthcare provider, I also work with people who have lots of different insurances and who talk to me about their medical care, and my sense is that no one else around me is getting in to see specialists sooner than that either.

          In terms of psychiatrists specifically, there seems to be an incredible shortage, but that the shortage is heavily filled by psychiatric nurses in private practice. For most people who don’t have very complicated psychiatric situations, a psychiatric nurse is a great option, just like for women’s health or general family practice care. Our family’s whole PCP practice is made up of NPs, not a doctor among them, and they are great. In our area, a person can generally get in to see a psychiatric NP within a week or two.

          What is the deal with the shortage of MD specialists, can anyone explain?

        • patuary says:

          Re: scj1091, that experience sounds horrible. For comparison, appointments with my primary care doctor at Kaiser were (pre-COVID) about a week or two out, and the same was true for any specialists I’ve ever seen (mostly minor ones, like dermatology or physical therapy).

          If I had to wait months to get anything done, I would probably switch.

    • Rob says:

      Yeah, as a canadian expat now on kaiser, my experience is that it’s similar to the public system I’m familiar with, with gatekeepers and not a lot of ability to make choices, which is fine with me. It also provides care way, way faster than I’m used to. In canada, a referral to an allergist took 10 months; at kaiser, it only took about a week.

    • Elementaldex says:

      To add to this stream of anecdotes. My parents use Kaiser and constantly sing their praises. This is after a lifetime of listening to them being unhappy about various insurance providers. They contend that everything just works and is fast. Not just for the easy day to day stuff, but even for hard complicated stuff that requires specialists. This is my only exposure to Kaiser but it is by far the most positive data point I’ve ever heard about any insurance company.

    • ovp says:

      Speaking personally as a Kaiser recipient, I love them for my primary care– efficient, cheap, reasonable!– but their mental health care is abysmal and random; SF’s policy last I checked was that you had to get your therapy in person, no more than monthly unless you wanted group sessions, at one specific branch, from whatever provider you were first assigned to. Oakland’s policy was that you could contract with an out of network provider if and only if you went through this arcane referral process through two different referring agencies. The therapist I found through this process got kicked off the billing system and ended up no longer taking insurance at all. Yay, employer provided healthcare!

      People who need other types of specialty care have reported similar issues but I can’t be more specific than that because I don’t remember the details, except one time I needed a non-emergency dermatologist and the process for accessing it was “go to a primary care appointment and have my primary care doctor physically call the dermatologist in if they’re free, otherwise you’re SOL.”

      • Edward Scizorhands says:

        “Great for most care but mental health” would explain why so many people seem to love them but Scott in particular thinks they suck.

        It seems every other provider in the world flipped on allowing remote therapy once coronavirus hit. Did Kaiser?

        • salvorhardin says:

          For primary care, Kaiser had a telemedicine system set up already and were nudging their customers toward it well before the pandemic. I used it for a couple of minor appointments last year and it worked nicely, and I was grateful to not have to spend the extra time to get to and from the medical office building. Dunno whether it was usable for mental health, though.

        • scj1091 says:

          My understanding is that Kaiser, as part of a legal settlement, now refers out almost all mental health care to 3rd party providers. When I finally got a referral after 4.5 months (which was about 4.25 months after I found an alternative myself and paid out of pocket) it was for a 3rd party provider.

      • pianom4n says:

        I’ve used their mental health care on the peninsula and it seemed fine to me. I didn’t try to use an out of network therapist or want individual therapy more than once a month, though. The weekly group therapy sessions were actually more helpful for me.

        I guess Kaiser is an example of making lots of things easy, but some things impossible.

    • notpeerreviewed says:

      I’m not Scott, but as a generally satisfied Kaiser member I’m guessing it’s some combination of two things:

      1) Scott is an out-of-network provider from a Kaiser member’s point of view. Out-of-network providers are always a hassle, and while I don’t know for certain, I’m guessing Kaiser makes them extra difficult because so much can be taken care of within Kaiser’s system.

      2) Kaiser’s model for providing of mental health services has been extremely controversial. They drag their feet to avoid paying for individual therapy, and push patients really hard toward going to group classes that are heavy on CBT exercise workbooks. They probably have a lot of published evidence supporting their approach, but patients generally hate it, and there have been protestors around Kaiser’s headquarters during recent months holding up posters of Kaiser members who committed suicide after not getting individual therapy for depression. I believe there are also a number of lawsuits going on.

      • Edward Scizorhands says:

        They probably have a lot of published evidence supporting their approach, but patients generally hate it

        You hit on one of the biggest problems with trying any kind of health care reform.

        • Garrett says:

          There’s a certain amount of “values” that goes into healthcare policy. I doubt that much of healthcare privacy law does much to improve medical outcomes and it certainly adds costs. But try suggesting to the general public that we should get rid of health privacy laws and watch the freak-out continue.

    • gleamingecho says:

      Can you expand on Kaiser? I’ve had nothing but positive experiences and everything is seamless.

      +1. I’m really glad I switched to Kaiser.

      • Del Cotter says:

        One American healthcare horror story I heard was “I’d like to move to [other part of America] but I have a serious pre-existing condition, and I checked and found I can’t be covered by Kaiser there, so I’m forced to stay here.” Which on one level is sad (freedom of movement within the country curtailed) but on another level is at least flattering to Kaiser.

    • Scott Alexander says:

      That comment may be unfair, because one of the rumors I’ve heard is that they’re great on everything except mental health. But they are definitely not good at mental health. See eg people in this thread here and here.

      My own experience with them is – my clinic employs several refugees from Kaiser’s therapy department, who say they were overworked, underpaid, and so busy that they were scandalously unable to see even patients in very acute crisis more often than once a month or two. You can read about the recent Kaiser mental health workers strike here; my experience suggests all their complaints are completely valid. I also know the State of California keeps citing them for criminally bad mental health services.

      A few of my patients are also refugees from Kaiser psychiatrists, who have Kaiser insurance but pay me out of pocket (= hundreds of dollars per session) because they can’t find anyone competent at Kaiser. I have heard a lot of horror stories about people being yanked off addictive substances that require a very gentle taper because it was against Kaiser policy for them to be on it and nobody wanted to break the policy enough to continue them even for the short amount of time it would have taken to taper off. I don’t know if this is a real policy, people making mistakes implementing the policy, or withdrawing patients being too angry to give a fair account of what happened.

      Kaiser sometimes sends current Kaiser patients to us because they don’t have enough psychiatrists to deal with them themselves, but this keeps going wrong in weird ways (patients think Kaiser has sent them to us, but then Kaiser says it hasn’t) or else people from Kaiser are so confused by a non-Kaiser doctor treating a Kaiser patient that they can’t handle basic tasks for me (me prescribing drugs to a Kaiser pharmacy goes wrong about five times as often as me prescribing them anywhere else).

      • Steve Sailer says:

        Kaiser is a mass market provider. Scott is, at least among intellectuals, probably America’s most famous psychiatrist of his age or younger. I imagine Scott doesn’t charge particularly high fees, but I would consider that, if I needed a psychiatrist, being able to have Scott as my psychiatrist would be a desirable luxury that Kaiser would be reluctant to accommodate without the kind of bureaucratic struggle that depressed individuals are hard-pressed to mount.

        I similarly wouldn’t expect Kaiser to make it easy for me to see, on their dime, Theodore Dalrymple, another outstanding thinker who is a psychiatrist. And, I would guess, a very good one. I was at a policy conference cocktail party once with Dalrymple, who had been a speaker. He was pleasantly making chit-chat with us about world affairs when his phone rang. It was one of his patients (or perhaps a patient’s loved one). He stepped out of range where nobody could hear exactly what he was saying, but I watched his body language change from slightly disengaged to intensely focused. His tone of voice became superbly empathetic and confidence-inducing as he talked his patient through some crisis. I was impressed.

        It’s a challenging problem how best to ration access to outstanding individuals like Scott and Dr. Dalrymple.

      • cuke says:

        The therapists I know who work in agencies or integrated healthcare systems are seeing 30 or more people in a week. At that volume, I would have trouble showing up for people, tracking their progress and work between sessions, much less thinking creatively about their situations and doing research in the background to support treatment.

      • Garrett says:

        How is there an expectation of being able to “fix” healthcare nationally when California isn’t able to address mental health care access with one of their largest insurers? California is famously heavy-handed with regulation. And Kaiser isn’t some small fly-by-night “healthcare and live bait” provider who’s headquarters is in a strip mall next to a Chinese takeout place which is shut down for health code violations more often than it is open. It’s also not some tiny State, either. California claims to be the 6th largest economy in the world. So why can’t they make it work?

        • Anthony says:

          Mental health care is probably just impossible to fix. It’s reasonable for a decent psychiatrist or psychotherapist to charge $150 – $200/hour. But that means a patient who needs weekly sessions for a year will cost $7500 – $10,000 per year. The number of people who could use that is high enough that actually paying for that level of service through insurance will either bankrupt the insurance company or the employer paying for the insurance.

          So insurance companies have to put barriers in the way of people getting talk therapy every week. Seeing a psychiatrist every six months to check on medications is far less expensive, and is all that *some* patients really need. Making people take group classes is also cheaper, and it’s effective for some.

          If you’re a patient, and you think you would be better served by those methods, Kaiser will be pretty accommodating.

    • Templar15 says:

      additional “kaiser good but not for mental health” anecdote: you can’t get a mental health appointment online, and their phone system has such awful hold music that I avoided using it as much as possible while I was still using (or attempting to use) their mental health system. Everything else has been totally fine.

  2. James K says:

    The US healthcare system is truly a worst-of-both-worlds mix of government and private provision. If I didn’t know better I would wonder if someone hadn’t recruited a Dark Economist of design a system that was as bad as possible while being impossible to reform.

    • Simon_Jester says:

      Sadly, no. Just Moloch in action.

      The core of the system (the assumption that employers will pay for insurance) dates back to the Roosevelt administration deciding NOT to build health insurance into Social Security at the time. It was the 1930s and other things (such as unemployment insurance) were viewed as a higher priority. So nothing got done on the subject for a while.

      Employee health benefits, which were already A Thing, then grew popular during World War Two as a way to bypass wage controls imposed by the federal government as part of war mobilization efforts. When Truman suggested, essentially, a “public option” system after the war was over, the Chamber of Commerce and the AMA denounced it as, wait for it… ‘socialism.’

      Lobbying for employer-provided coverage was more feasible, and the relatively strong labor unions of the period could exert leverage in that direction, so… that’s what we got. Of course, that was in the relatively stable employment environment of the 1950s, which is a far cry from the situation of today.

      Attempts to reform the current system have been going on for about 75 years now, but the increasing power of the health care providers that profit from the status quo makes this reform very difficult, especially in the face of a major political party that makes “don’t introduce new large government programs” a matter of ideological principle.

      • North49 says:

        You seem to be assuming reform can only happen in one direction. One who opposes large government programs might just as well say reform is difficult because one party makes “don’t let markets function” a matter of ideological principle. However, I think both these statements probably fail the political Turing test.

        • Edward Scizorhands says:

          The fact that employers can give out insurance nearly-tax-free is a serious impediment towards trying to switch away from that. And that specific reform is usually blocked by progressives. (Although we can’t forget the camp of conservatives who oppose any tax, any time, anywhere, for any reason; even if it’s “stop this stupid carve-out from a tax that never should have existed in the first place.”)

          • North49 says:

            But again, the model here is there’s only one direction for the reform. Instead of closing the tax loophole for employer sponsored healthcare, make all healthcare expenses tax advantaged. HSAs work really well (though with pretty low contribution maxes) but it’s illegal to have one unless you pair it with a specific type of insurance plan. Just make HSAs available to anyone, and make insurance premiums an allowable HSA expense and the employer plan lock-in goes away overnight.

          • Lambert says:

            Make buying insurance as an individual tax-free?

            Individually buying insurance becomes competitive with employer-provided insurance, and the insurance companies have to keep those customers at least somewhat happy.

          • sourcreamus says:

            McCain had a proposal that stopped the employer healthcare tax break and paired it with an individual tax credit for buying insurance.
            The Obama campaign attacked it as a huge tax increase. It seems like the type of reform that would be possible.

          • Edward Scizorhands says:

            I think a reasonable improvement from where we are now is:

            1. The Federal government lets anyone take Medicaid, need-blind.

            2. You can skip that, like if you have an employer plan, and get a flax tax credit of a few thousand bucks (to offset the fact that you now get taxed on your health care compensation).

          • justin1745 says:

            I agree that the tax exemption is a huge problem and needs to go.

            The U.S. definitely needs to go to a two tier system: a bottom tier which anyone can access and which provides pretty good care but was an eye to cost effectiveness, and a higher tier which people who want to pay for high cost / low marginal value care.

            The Medicaid idea is a good one. Use the Medicare label (yeah just marketing), a few small strategic co-pays (on brand name drugs with generic alternatives or non-emergency are at the ER, for example) but otherwise free for the patient.

            Unfortunately, revenue is a huge problem now, so I don’t think we can replace the tax exemption of employer health care with a tax credit – especially if we’re going to add 30-40 million people to public health care. Rather, if you use Medicare, your personal federal tax burden goes up 1.5x.

            A single person earning $16,000/yr pays $380, so he would owe $190 extra in Medicare taxes or $15.83/mo. At $36,000/yr, the amount paid is $2,622, which would create $1,331 of Medicare taxes or $110.92 per month. If he’s head of a household with one child and still makes $36,000, there’s no net federal tax burden and therefore no cost to Medicare.

            This would create a financing mechanism (from the elimination of the employer tax credit and the Medicare tax or premium, whatever you want to call it), ideally making the proposal revenue neutral.

          • Garrett says:

            > The Federal government lets anyone take Medicaid, need-blind.

            On a self-interested basis, please figure out how you’re going to address issues with ambulance services. We’re currently in a weird boat where Medicaid pays so poorly that we couldn’t operate solely off of its reimbursements, while at the same time we’re required by law to accept it for any 911 call. (We’ll generally refuse any inter-facility transport we can which would be paid by medicaid)

            Additionally, it’s a well-known problem in certain areas, especially those of low socioeconomic status, that people will call 911 for transport to the hospital when it’s either not medically needed (they think they’ll get service faster), but sometimes as a way to get free transportation – it’s a “free” ride into the city.

            With commercial insurance, at least we get paid for the abuse. And for people who don’t have insurance, we can bill them and take them to court or lien property if needed. Medicaid is almost the worst of both worlds.

          • Edward Scizorhands says:

            I get that that’s a problem. But I don’t see how my plan (letting middle-class people who suddenly have a need for Medicaid get into it quickly) would make the problem worse.

            Medicaid isn’t great coverage. But it’s coverage. And we expect most people to want and get something better.

      • JPNunez says:

        Other countries don’t tie insurance to the employer, and let the patient/worker to choose their own insurance company. This still has problems, but you don’t need to lose your favorite psychiatrist because you changed jobs at least.

        The problem is that this requires the government demanding you buy insurance directly out of a cut of a paycheck, and Americans just fucking hate this. It’s not impossible to pull off, Obamacare is almost there but now the republicans are in power so who knows what will happen. It’s optimistic to think that the coronavirus will produce a change on this.

        • Edward Scizorhands says:

          If GiantCorp buys insurance from BigCross, they can negotiate bulk discounts. Would the rates be the same if people were just buying individually?

          • Matthias says:

            I don’t buy the stoty of those discounts.

            Big corporations usually end up paying more than private individuals. See eg software or even just office furniture.

            That’s because big corporations need to also pay for the specialised high touch sales necessary on the sellers side to deal with them.

          • Edward Scizorhands says:

            Big if true. Is it?

            If what you say is true, then some employer would be able to save a bunch of money by telling employees “go buy on the exchange, and we will pay for it through payroll deduction,” and do it right now. Are they doing that?

          • DaveOTN says:

            Maybe, but in my case, Small Irish Company has to buy insurance for 30 US employees, scattered across 15 different states. Irish HR rep has no real understanding of American insurance options, and needs to find an option that offers nationwide coverage, so she just picks the cheapest option that meets ACA standards and assumes that’s cool with everyone.

            More broadly, most companies smaller than GiantCorp are not fighting hard for discounts. They’re assigning an overburdened HR rep to update the company’s insurance options every year while trying to deal with other duties, and this person is trying to accommodate all the complaints employees make every year while the CEO yells at them to keep costs down. They probably aren’t calling BigCross up and asking for a discount, they’re just trying to decipher the options so they can present the CEO with three or four different semi-acceptable price points and asking him to recommend one.

          • JPNunez says:

            No, they would not. This is a great point, but it is mostly compensated because the worker can shop around a lot more so the different insurers have to compete anyway.

            A big problem is that it may be difficult to compare different insurers. The gov would have to intervene to force offers to be easily comparable. This is probably worse if the customer is actually the employeer, cause BigCorp can spend on complex health insurance comparisons, so the government may not necessarily force easy comparisons.

          • nyc says:

            > If what you say is true, then some employer would be able to save a bunch of money by telling employees “go buy on the exchange, and we will pay for it through payroll deduction,” and do it right now. Are they doing that?

            That’s assuming the cost of big corporate inefficiency is substantially larger than any of the existing regulatory advantages. Is that Obamacare rule fining employers for not providing group plans still around, and would this qualify? Paying the plan amount to the employee as payroll might be a deduction to the employer, but does that mean it’s taxable income to the employee? What about payroll taxes?

            I haven’t actually verified that any of these are the case, but if anything like these are true then having the employer do that right now wouldn’t work unless the employer inefficiency is so large as to outweigh them all.

          • ana53294 says:

            The issue here is that, in a private market where age and pre-existing conditions make a huge difference, young healthy singles will get a huge discount, and the elderly workers with diabetes will get a markup.

            And if individuals start getting tax advantage, all the young people without pre-existing conditions will leave their employer-offered health insurance for a private one, increasing the premiums of the people on the employer-offered health insurance.

            That’s when the discount for GiantCorp would come in handy 🙂

          • North49 says:


            I don’t think this can be true, or at least not the whole story. When companies buy expensive office furniture, what’s the TCO over 10 years vs buying and replacing consumer grade furniture?

            “Pro” versions of software are more expensive because they put features that are useful for businesses behind the paywall, but businesses make it up in productivity gains from those features. So it’s actually cheaper than buying less expensive software and spending man hours working around the missing features.

            Businesses can err, but if every business is consistently doing something you think is an error, it’s probably either an invitation to investigate a bit deeper, or an invitation to become a billionaire solving that problem for all of them.

          • Aqua says:

            Just another anecdote, but my GiantCorp would overpay on flights at like 2x vs just using Google. Also chairs and maybe desks

            There really isn’t all that much insentive to save money when things are working and there are other priorities

          • Wency says:


            Have to agree here from my own experiences.

            In general, having worked for both small and large businesses in the same industry, I think small businesses are better at spending money responsibly, but megacorps are dramatically better at generating revenues from a given amount of labor because everyone’s efforts are multiplied by the firm’s market power. As long as the revenue engine is working, costs aren’t a big priority. Occasionally the revenue engine breaks down and firms try to go into cost-cutting mode to salvage the stock price, but the stock will always be a loser unless the revenue engine gets going again.

            Some people trust too much in the invisible hand to control costs. If Microsoft spends twice what it needs to developing the new version of Windows, why doesn’t someone else develop a new better Windows and charge only half the price? Well, take a crack at it and let me know how it goes.

          • notpeerreviewed says:

            If GiantCorp buys insurance from BigCross, they can negotiate bulk discounts. Would the rates be the same if people were just buying individually?

            I think countries that make this work generally regulate prices.

          • notpeerreviewed says:

            If what you say is true, then some employer would be able to save a bunch of money by telling employees “go buy on the exchange, and we will pay for it through payroll deduction,” and do it right now. Are they doing that?

            Two problems. First, there are regulatory barriers to doing that. Second and more importantly, employee plans serve as a risk pool; even if most of their employees could get cheaper insurance individually, the employers would be stuck paying for plans for their sickest employees, and the insurers would raise their rates accordingly.

          • Edward Scizorhands says:

            Is risk-pooling still an issue, post-PPACA?

            Sometimes corporations overpay because someone is getting a kickback. That’s my typical mental model if I can’t figure out another explanation. But sometimes there is an explanation: maybe those more expensive tickets have something you can’t see behind them. They might be using a provider that guarantees them flight access, or they might be tickets that are easy to change at the last minute.

          • sharper13 says:

            If GiantCorp buys insurance from BigCross, they can negotiate bulk discounts.

            GiantCorp doesn’t really buy insurance from BigCross. GiantCorp buys insurance plan management services from BigCross. GiantCorp typically self-insures and only pays BigCross a fee to manage all the paperwork and to use their already set provider network/contracts.

            That is how it works even in more medium-sized companies, as long as they have enough assets/income to make it work out. Small businesses generally don’t have large enough employee populations to do this, so instead they actually buy insurance, although sometimes can save money by risk pooling with other small businesses via a trade association or small business association.

            BigCross provides the additional service of when there is a claim that should be denied, LittleEmployee blames them instead of BigCorp.

          • Ketil says:

            But sometimes there is an explanation: maybe those more expensive tickets have something you can’t see behind them.

            I think it goes like this: company department is instructed to find a travel agency “solution” for the company, surveys/asks around for tenders, and selects an agency that they like. The agency will typically offer a discount in the form of a yearly refund of some percentage, which sounds really great if you don’t think too hard about where those money came from in the first place. Then company instructs workers to use the selected agency.

            At an academic institution, much of the income is through research grants, which are managed by individual researchers (PIs). By forcing researchers to overpay for tickets, and the institution centrally collecting the refund, this is a sneaky way to funnel money from research and back into the institution.

            The rationale given for mandating a travel agent are usually pretty vague, like the ability to get help with booking or changes in travel plans, and the like. Not something I would pay for, certainly not for simple trips to mundane cities.

          • Garrett says:

            > DaveOTN

            I sympathize with your HR department. If everybody’s in the same area it’s easy to simply poll employees and find out what works for them. When you have people spread across the whole country it’s really hard to do that because different insurers have different strengths in different areas. And that’s before you start looking at the plan design.

            Large companies (who are likely to self-insure anyways) can pretty much design the plan to meet their goals, within the bounds of their budget and the law.

            Small companies, even ones with nearly-unlimited budgets for benefits, still frequently run into plan structures where the employees ask “who thought *that* was a good idea”?

          • Edward Scizorhands says:

            Also, sometimes the weird thing with booking agencies is because there was abuse before, and the company decided to outsource their compliance. You want to buy extra legroom or extra miles? Nope!

            One of the world’s biggest ironies is that protection against “Waste Fraud and Abuse” can cost more than the WFA did in the first place!

      • James K says:

        Oh indeed, just to be clear when I said “if I didn’t know better” it’s because I definitely know better.

    • Matthias says:

      Amazingly enough, Singapore shows how a best of both worlds can work. Singaporeans as a whole spend half as much as Brits do on healthcare. (Total expenses both public and private. Measured in percentage points of GDP.)

      • Wency says:

        My understanding of the Singaporean model is basically a combination of government-run hospitals where everyone can go for free but you get what you pay for, combined with private, for-profit hospitals, where you also get what you pay for (and you do have to pay: no equivalent to Medicaid/Medicare to give you access for free).

        If I were to design a system from the ground up, this seems like the way to go. The system works for everyone: everyone has access, but those able and willing to pay get something better. The fact that there’s government competition means the private sector actually needs to offer a quality experience and transparent pricing instead of basically being Government 2.0: The Revenge.

        • Ketil says:

          Sound much like the Norwegian setup, except that I think we have quite high costs. So there’s likely more to it than government funded hospitals and no private insurance.

      • craftman says:

        I’ve been more and more skeptical of the Singapore model (of everything, not just healthcare) when you realize that half the city-state is powered by the labor of what is basically and underclass of immigrants with lower legal status, protections, etc. than full citizens. And I’m saying this as a libertarian not a bleeding heart liberal.

        I’d like to know more about whether all those foreign guest workers pay into the system and get the same benefits? Pay in and get no benefit? Aren’t allowed access at all? Because you can’t just design an American system that only covers anyone who graduated from college and let everyone else go to Indonesia or Thailand or Mexico when they need surgery.

        • Douglas Knight says:

          Foreign workers have health insurance, but they’re young, so they don’t use much medical care. That Singapore spends less per person may be an illusion caused by population structure.

      • ChrisA says:

        Hong Kong has similar great results with same low cost. https://hongkongbusiness.hk/healthcare/news/hong-kongs-healthcare-system-beats-singapore-worlds-most-efficient-bloomberg

        HK basically has a UK system, an NHS free at point of care plus private medicine for those who want it. So no savings system. I suspect HK and Singapore are more about genetics and cultures rather than organising systems.

  3. vtevelde says:

    The only way this survives, as far as I can tell, is because regular Americans en masse don’t have any other experience to compare to. I’m a patriotic American from the middle of the country, definitely no coastal liberal, but have been living in Australia for six years now. The very first time I had to deal with a health issue here, I decided right then that my husband and I would stay long enough to get citizenship. Even if we move back to the States eventually, we will have the option to come back here for healthcare. Now we are having children and although my husband would have better work opportunities in the States, we want to stay here to have them because the thought of dealing with US healthcare for it is so aversive. We are well off and can afford good health coverage, but it doesn’t matter. We pay very high taxes here to cover the cost of medicare, but it just WORKS, and I’d happily pay 50% more taxes for it. Of course there are downsides but it’s not even remotely comparable. It boggles my mind that anyone who has ever had to deal with health insurance in the U.S. thinks the system is acceptable. Just reading your post reminds me why I love it here so much.

    • Ragged Clown says:

      So many Americans seem to find it hard to imagine a different system.

      I run an online community, Smart Patients, with members from all over the world and this argument gets replayed over and over. The model for many of the American members is that government-run healthcare would be like the DMV — and no one wants the DMV to be doing surgery. They simply don’t believe that a government-run organization can be competent.

      I lived in California for 25 years and recently moved back to the UK. About 15 years ago my wife had a minor stroke caused by a PFO (hole between her atria) in California. She was admitted to hospital. We had supposedly good insurance but for months afterwards, the bills just kept coming and coming for the craziest thing. The anaesthetist sent a bill. There was a bill for this medication and that medication. She was seen by a cardiologist, a neurologist and a pulmonologist. They all sent separate bills. We had to fight the insurance company over every one of these bills and ended up $1,000s out of pocket. There was no one coordinating her overall care and we had to continually tell one doctor what another doctor was doing.

      Arriving back in the UK, my wife told her GP this story and she said “Oh. You can get that PFO closed with a simple procedure.” and sent her to a cardiologist. The cardiologist coordinated an evaluation with a neurologist and, together, they recommended her for the procedure. All the pre-op appointments were arranged by the cardiologist’s assistant to fall on the same day so we only needed one trip to the hospital. My credit card never left my pocket.

      I pay a lot more in taxes for this level of care but not as much as my company pays in insurance premiums in California.

      • add_lhr says:

        Do you actually pay more taxes? I mean, I trust that you’ve personally done the calculation, but this is another area where I think many readers have misconceptions, so I mean “you” in the abstract sense…

        I lived in NYC for 6 years and now I live in the UK – my salary is about the same in USD terms and my effective tax rate is one percentage point lower here in the UK. Income tax + National insurance adds up to 33% overall vs Federal + State + City + Social Security added up to 34% overall in the US. And because salaries are lower in London than NY, I have a higher standard of living despite the same total comp & taxes.

        VAT is higher than NYC sales tax, but the property tax I pay is lower than the property tax my landlord would be paying and passing on to me in the US, so I am not convinced that the overall burden is any different.

        • EchoChaos says:

          NY is incredibly heavily taxed for a US polity. Places like the Midwest, Texas, Florida have far lower taxes.

          • Joseftstadter says:

            Wages are also lower in Texas, Midwest, etc. Standard of living is also cheaper in Birmingham, UK or Leeds. In any case, NYC is the appropriate comparison to London, not Houston or Tampa.

          • EchoChaos says:


            Houston, TX has an average salary substantially higher than London.

            Tampa’s is slightly higher.

        • Murphy says:

          If you convert currencies and divide per capita the US governments (federal and state) as a whole spend more per citizen on healthcare (medicare, medicaid etc) than the UK spends on the NHS per citizen.

          The big difference seems to be that then americans spend all the insurance money on top of that as well.

          I mean, I have the option of getting private health insurance in the UK as well and it’s cheap but it doesn’t really seem worth it.

          An acquaintance of ours lives in the states but has been visiting the UK for IVF. Since she’s non-resident she has to pay privately but it still works out vastly cheaper even with the flights.

          She was talking about how weird it was having lived in the UK before moving to the US the way Americans have bizarre ideas about the NHS and similar systems.

      • Gabriel Conroy says:

        this argument gets replayed over and over. The model for many of the American members is that government-run healthcare would be like the DMV — and no one wants the DMV to be doing surgery. They simply don’t believe that a government-run organization can be competent.

        That’s why I think “medicare for all” has a branding problem, even though it would probably be better than what we have now.

        What I mean by “branding problem” is that when a lot of people, I suspect, hear “medicare for all,” they think of that organization that requires them to fill out so much nonsensical or confusing paperwork to support their elderly relatives, or that organization that takes money from their paychecks, or they think of medicaid, which is “for poor people, and it’s impossible to find a doctor who’ll take medicaid.”

        I’m not saying those thoughts are correct. And I don’t know how much “a lot” is, but I suspect it’s at least a large enough minority of Americans to make medicare a difficult sell.

        (Also, others please note: I’m saying medicare for all has a “branding problem,” I’m not arguing the merits of it as a policy.)

        • Del Cotter says:

          The DMV thing is interesting because it mirrors my feelings about private health insurance. I have insurance policies for lots of things, and am rarely full of warm feelings for my insurers. If you say to me “you’re going to have private health insurers now”, I picture having to cope with my sicknesses the way I have to cope with my car breaking down, my bike getting stolen, my phone going missing, or my living room flooding.

          • Matthias says:

            Insurance should be for catastrophic and unpredictable events you can’t fund out of pocket.

            Not eg a weird prepay system that gives you 100 dollars a year of your own money back to buy glasses.

            A true insurance system plus health savings accounts would have drastically diminished bureaucracy, mostly because you are just not interacting with the insurance part all that much under most circumstances.

            Some countries have systems like this.

          • Del Cotter says:

            Perhaps it should be called “cover” instead, like AA/RAC membership is “breakdown cover” not “breakdown insurance”.

      • eelcohoogendoorn says:

        Maybe I am missing something; and I am not saying the US system isnt horrible, how is spending a few k out of pocket an absurdity, for getting cardiovascular surgery?

        Have you ever had to give your car engine an overhaul? Had to have your kitchen or bathroom redone?

        • thisheavenlyconjugation says:

          Lack of a nice bathroom rarely kills people.

          • sourcreamus says:

            Yet people willingly pay tens of thousands for a nice bathroom and complain about spending thousands to stay alive.

          • Act_II says:

            Has it occurred to you that those “complaining” and those with tens of thousands to drop aren’t the same people?

          • cuke says:

            I’m not sure “what people complain about” is a helpful metric in any case.

            In this particular moment, I’m struck by the idea that we all have a stake in everyone generally having easy and reliable access to healthcare while we don’t all have so much a stake in whether X person gets to renovate their bathroom.

        • Murphy says:

          I want a playstation…. I work, I save, I buy a playstation. Wonderful. good model.

          I’m born with a major heart defect, I want heart surgery…. I can’t work because of the health effects, I can’t save, I die. Guess I should have been more responsible about how I grew my heart.

          Alternatively: I’m born with a major heart defect, I want heart surgery…. i get heart surgery funded by the state, I can work as a result and 40 years of taxes from me pay the cost many many times over.

          • Edward Scizorhands says:

            If the worst thing about a health care system was “you have to pay $5000 to have heart surgery” I’d say it’s doing pretty good. We could deal with that problem.

          • Garrett says:

            In dystopian science-fiction fashion, why should the government be supporting people who have genetic or congenital defects? Surely we’re breeding a population full of people who are more prone to such illnesses. At least those parents (or patients, if adult manifestation) who pay for their own care are able to demonstrate that their economic productivity offsets the condition they have.

          • Murphy says:

            In dystopian science-fiction fashion:

            Even if you only place a fairly low intrinsic value on human life… mutation is slow. It takes a long time for removing selection pressure against congenital defects to do much and within a few generations we’ll likely be able to deal with genetic problems without ethically awful stuff.

        • Randy M says:

          I don’t think it’s unreasonable for people to pay (at least some portion of) medical expenses, even if it often is unfair.

          But one problem with the US system is a lack of transparency or predictability in the price, bargaining power of insurers that pushes up the sticker price, and myriad layers of bureaucracy that leave a deep uncertainty about the process of payment.

          • North49 says:

            There are also plenty of regulations that are quite certain, for instance not being allowed to buy insurance across state lines. Much of the FDA’s function is to make sure medical technology can’t follow the price/performance curve of the rest of the technology sector. Drug patent are a fairly new concept as drugs were considered scientific discoveries rather than inventions until the 70’s (right when medical costs started to spiral out of control).

          • nyc says:

            > Drug patent are a fairly new concept as drugs were considered scientific discoveries rather than inventions until the 70’s (right when medical costs started to spiral out of control).

            Interestingly this is kind of what you would expect to happen, but not necessarily in a bad way.

            Suppose it costs five billion dollars to do medical R&D that would save a hundred thousand lives. That’s $50,000/person — less than the value of a life. You want this to happen, but now medical costs have increased by five billion dollars. Multiply by hundreds or thousands of similar breakthroughs and the cost gets very high, but that isn’t the same as not being worth it.

          • albatross11 says:


            I think the lack of meaningful and transparent prices breaks the whole system. Nobody can tell you how much your out-of-pocket will be for anything, prices have no particular relationship to what things cost to provide or how much people usually actually pay, and everything is saddled with complicated and opaque cross-subsidies and extra charges that don’t make any sense but they’re somehow inescapable.

            ISTM that it would be possible to fix at least this part with regulation. How about this: Every provider must publish a price list for their services, which is the only rate they’re allowed to charge anyone. That’s the up-front cost, and medicare, medicaid, private insurance, charities, and out-of-pocket patients pay exactly that. Kickbacks to insurance companies or employers, balance billing, and the like are criminal fraud that ends with the people involved sitting in an actual prison cell for a few years. That also eliminates the need for in-network vs out-of-network distinctions, because everyone pays the same rate. You can still run private networks of doctors and hospitals (Kaiser, VA) that never send members a bill, but if you accept a patient, you may never bill them for more than your published rate. Maybe add in some serious attempt to eliminate cross-subsidies, so the hospital can’t and doesn’t attempt to charge the insured patients an extra 50% to cover the costs of the uninsured patients.

          • eh says:

            Regulating that costs be the same for insurance and upfront payments would entrench insurance even further, because anyone who paid upfront would be subsidising the cost of haggling with insurance companies. It would stop the Amish system from working, and prevent innovations like affordable upfront-only clinics from taking root.

          • Dack says:

            Regulating that costs be the same for insurance and upfront payments would entrench insurance even further, because anyone who paid upfront would be subsidising the cost of haggling with insurance companies. It would stop the Amish system from working, and prevent innovations like affordable upfront-only clinics from taking root.

            No, no, no.

            A single price system does not mean we are forever more saddled with the current artificially inflated prices.

            What it means is that you can now price shop. Therefore, providers are competing on price. Therefore market forces force repeated undercutting in a race to the bottom until prices settle around a reasonable profit margin. Everyone would pay those prices whether they are insured or not, so insurcance would only be for catastrophes (as it should be.)

        • North49 says:

          Maybe there’s something to be learned (genuinely exploring the idea here, not being snarky) from the fact that you can get car insurance and home insurance for catastrophic events, but not kitchen remodeling or engine overhaul insurance.

          • albatross11 says:

            You can totally get engine overhaul insurance–it’s called an extended warranty. Some years ago, a car I’d bought certified used (which comes with an extended warranty) had the transmission go out less than 10,000 miles before the end of the warranty. They replaced the transmission, which would have otherwise cost several thousand dollars.

            You can also get a home warranty, which replaces (with the cheapest replacements available on the market) any major appliances that fail for a certain term. These are relatively commonly bundled with the purchase of a house.

            Note that both of these are still insurance–they cover the cost of rare expensive bad events. You don’t get an extended warranty to cover the cost of oil changes or tire rotations. The common kind of health insurance covers a lot of oil-change/top off the fluids/rotate the tires kinds of medical stuff that doesn’t really make sense for an insurance policy.

        • Matthias says:

          High deductibles are indeed sensible and useful to align incentives and lower insurance premiums. From what I’ve heard the Americans don’t really work that way.

          Scott has described a few of the problems in the past.

        • Ragged Clown says:

          This isn’t about me complaining about the out-of-pocket cost in the USA. I just checked my post again. I didn’t complain about that.

          The point of my post wasn’t that it’s absurd to pay some of the costs of the surgery, it’s that so many Americans find it hard to imagine that there’s a different way of delivering healthcare.

          I DO think it’s absurd to get 30 different bills from 30 different entities after a short stay in a hospital.

          But also, now that you mention it, billing individual patients for medical costs does substantially make for a different experience — both from the patient’s perspective and from the hospital’s perspective. SPOILER: it doesn’t make it better.

          • Mabuse7 says:

            Well that’s largely thanks to the AMA’s tireless efforts to prevent any major deviation from the sole practitioner/small mono-speciality partnership model of healthcare provision.

      • sclmlw says:

        Has there been a comparable federally-managed system in the USA that works adequately? Maybe the problem isn’t the DMV. Maybe it’s just that America can’t figure out how to run a decent state-run system for anything, so people are justifiably wary when proposals are floated to create a new and larger system for health care. The current ‘system’ is clearly broken, and I don’t know any conservatives who think the status quo is okay. But I can understand that the argument “other countries manage this thing” rings hollow when there’s no real rejoinder to the reply, “sure, but whenever we manage this kind of thing it turns out turns into a train wreak.”

        • Matthias says:

          Just move into the direction of better privatisation then.

          Alas, that’s politically unpopular as well.

          Even the simplest and most straightforward reform, removing the tax difference between buying health insurance yourself vs via your employer, is deeply unpopular.

          • sclmlw says:

            Why is it so unpopular? Because it’s destined to destroy employer based insurance? :

          • eric23 says:

            Who says you’ll get better privatization? Maybe you’ll get incompetent privatization (like the US currently has for consumer internet, infrastructure construction, etc.)

        • North49 says:

          Remember, the US is the country where “we have to pass the bill to find out what’s in the bill”. Well reasoned and well written legislation isn’t exactly our comparative advantage.

          • po8crg says:

            My understanding is that the intended meaning of that comment was “we have to pass the bill for you to accept that our description of what is in the bill is accurate”.

            (ie, we say it will do X, you say it will do Y, the only way we can find out which it will be is to pass it and do it and then we’ll know)

            Which is less unreasonable – but if the language is so complicated that actual legislators don’t know for sure what the effect it will be, then that doesn’t suggest the absence of problems.

        • nyc says:

          The US is much bigger than any individual country in the EU. The only thing in the EU with larger scale than the US is the EU itself. Several US states are larger than several EU countries using basically any metric you care to choose.

          If the EU tried to run healthcare, it would probably run into a lot of the same problems federal programs do in the US. There is a scale past which you already have all the useful economies of scale and all you get from more scale is more political wrangling and bureaucratic inefficiency. The US federal government is well beyond that scale.

          In theory US states might have better luck, but they’re not independent. Anything California or Texas wants to do is still subject to the US patent system, FDA regulations and the federal tax code. For them to do anything comprehensive would require the feds to step out of the way.

          • Del Cotter says:

            I typed too soon, and didn’t spot your last paragraph. I still think that sort of thing is a standard excuse, like “I’d have clobbered the other guy, but gosh darn it you all held me back.”

          • Del Cotter says:

            duplicate, this was supposed to be the edit.

          • eric23 says:

            I don’t understand why a country of 320 million (US) should find it harder than a country of 90 million (Germany). And yes German is also federalized like the US.

        • JRG says:

          The VA hospital system is truly national, widespread, and federally managed. The population skews towards SES groups that tend to need more medical care over the course of their lives than the median American. Some VAs actually work pretty well and are centers of excellent clinical biomedical research. Providers at the VA never have to worry about prior auths for medications or billing insurance.

          Other VAs, well… All the employees are federal civil servants and thus almost impossible to fire as long as they mostly show up to work, which leads to predictable problems. There’s an old medical joke:

          What’s the difference between a VA nurse and a bullet?
          1. Bullets draw blood
          2. Bullets only kill one person
          3. Bullets can be fired

          • sclmlw says:

            I’ve worked with the VA on a few clinical trials. It’s cumbersome, to say the least. When people talk about creating efficient government bureaucracies I think of how bad my experience was with the VA. You know it’s out of control when the red tape is too much for the second most heavily regulated industry in the US.

            I know there are great docs at the VA, but it’s not a talent problem.

        • zzzzort says:

          Social security works fairly seamlessly, and a substantial fraction of the country. Medicare is quite popular with the people who have it (more popular than private insurance). Some of the most vehement opposition to medicare expansion is from people who already have medicare and who fear that expansion would cause a decrease in quality.

          • sclmlw says:

            SS has a very poor rate of return down near 1%. I get more than that from my savings account. There’s also a death and disability benefit, but those are already cheap on the open market. If SS took our money and bought private death/disability insurance, then invested the rest we’d all retire as millionaires.

            “But investments can fail!” They can go down, but rarely below the actual rate of return of SS. Meanwhile, I don’t include SS in my retirement planning because I don’t expect it to be around in three decades when I retire. How is that reliable?

            Since the main concern with socialized medicine is solvency and cost, it’s not convincing to bring up two programs plagued by problems with solvency and cost.

          • zzzzort says:

            Viewing social security as an investment program is a mistake, imo, though one encouraged by the accounting fictions used to justify the program. You could argue that the government could use its ability to borrow money at low rates then invest that money on the market (which is equivalent to investing your SS money and borrowing money to pay other costs), c.f. Matt Bruenig’s advocacy for a social wealth fund.

            But in terms of determining eligibility and benefit levels, the cutting and delivering checks (that is, the bureaucracy), SS seems to do a pretty good job.

          • Loriot says:

            The point of SS is to serve as a backstop when all else fails. You shouldn’t expect “returns” to match the stock market because it’s (in theory) much less risky. The only real risk is political risk – that someone or other will decide to cut it before you become eligible.

            Also, it is means tested, which means the “returns” are skewed heavily towards those who need it. SS is an insurance program, not an investment vehicle.

      • Antistotle says:

        > They simply don’t believe that a government-run organization can be competent.

        That is because for the most part no government run organization in the US *is* competent, except maybe the Marines, and that’s because they’re (relatively) small and keep themselves relentlessly focused on their mission–and even they lost their way for a while in between the mid 70s and mid 80s.

        As to insurance, my wife gave birth to our Spawn in the mid 2000s at Lucille Packard hospital in Palo Alto, it was a problematic birth involving an emergency c-section, and Spawn spending a week in ICU. $80,000 bill. We payed less than 3000 out of pocket.

        • Clutzy says:

          Important point. People in America have a learned experience. The average government employee is not very good, or often even appears malicious. I would say those two make up some 95% of interactions with government employees. The exceptions being a small minority of my schoolteachers and a small minority of judges.

          For example, I’ve never met a police officer who appeared competent and benevolent.

          • Antistotle says:

            > The average government employee is not very good, or
            > often even appears malicious.

            The–or at least a–problem is leadership, not the front line worker. At every layer *between* the line workers & managers, and the “leadership” appointed by our elected representatives you have people who are more invested in *the system* than the mission.

            This is what happened at the FDA, CDC and WHO that made their responses to the pandemic less effective than they could be. The employees because more concerned with “the game” and lost sight of why it was played. This is because “leadership” was more vested in the politics than the real mission.

            I’ve met lots of competent police, but a few years of dealing with the sort of public that police work with *daily* sort of burns the benevolence out of them, and they become competent at things you really *do not* want to have demonstrated on you.

            At some point in building the bureaucratic state so beloved by the progressives we gave up on real leadership and assumed that management would be enough. That didn’t work either.

          • albatross11 says:

            I wonder how much worse the civil service got, overall, as a result of eliminating the civil service exam. That was done basically because of antidiscrimination reasons involving which racial groups do better or worse on tests, and it seems plausible that it made the whole civil service less efficient, but on the other hand, the most recent visible f-ups by CDC and FDA were surely done by people who would have passed the tests.

          • quanta413 says:

            but on the other hand, the most recent visible f-ups by CDC and FDA were surely done by people who would have passed the tests.

            I agree it’s unlikely it would have made a big difference here in particular. On the other hand, if you use rankings on tests as part of how to determine advancement, you may promote different people to management.

            Clutzy’s example of the police is one case that in some places is particularly egregious as far as use of exams go. IIRC, there was a court case where it was ruled that a certain police department policy which rejected candidates whose scores were too high was perfectly legal.

        • BadSquirrel says:

          Marines are far from competent. I spent ~6y working with them; I characterize them as “the DMV, but with short hair”.

          • Antistotle says:


            Because the Marines I worked with in the 1980s were not nearly as good at their primary mission as they were by the late 1990s.

            Also, are we talking about locating, closing with and destroying the enemy through fire and maneuver, or the sundry support tasks? Because I’m taking about the former and will grant less than competence at the latter.

        • zardoz says:

          …for the most part no government run organization in the US *is* competent

          That seems overly harsh.

          The IRS is pretty good at what they do. The US military in general is very good. Courts and cops are pretty clean, all things considered.

          • Antistotle says:

            The IRS–it depends on what you consider their job. They are incredibly wasteful, authoritarian (WTF do they need agents armed with *rifles*?) and unpleasant to deal with (my father, back the 60s, was selected for a “random audit” 7 years in a row because the first year he pissed off the authoritarian prick assigned to deal with him.) Yeah, they scare the cr*p out of people, and yeah for *most* people they process their income tax returns promptly.

            The courts are a mixed bag. Family courts are a fuck story. Tax courts are a travesty (somehow the IRS has arranged it so that you are guilty until proven innocent). The 9th circuit seems to be running off a different set of rules than the rest of the country.

            Funny that you think cops are doing a good job and are “clean” (you must not be from Chicago), while Clutzy has the opposite notion.

          • DeWitt says:

            Don’t 40% of US cops abuse their spouses?

          • zardoz says:

            I think people in the US take a lot for granted. There are places in the world like Greece where the local authorities collecting taxes are incompetent or corrupt, and the government is starved of revenue.

            The big problems with taxation in the US are in the tax laws themselves, which are set by Congress, not the IRS. That topic is a million miles deep, though, so I won’t digress. (By the way, I did touch on this a bit in my review of the third chapter of Business Adventures.)

            I agree that family court in the US is pretty bad. Apparently how bad it is depends a lot on the jurisdiction. This is a super culture-war topic, of course. I would argue that the problem isn’t the courts themselves, but the laws.

            Cops mostly do a good job in the US. People take this for granted, but try travelling to some place where cops routinely ask for bribes, like Belize. Or a place like Mexico where you never really know what side the cops are on.

            US cops really have a tough time because the media does not cut them any slack at all. You often see stories that are either very misleading or outright false.

            Most of the problems are again from bad laws– like the asset forfeiture laws, or most of the drug war laws. (By the way, Joe Biden was heavily involved in expanding the use of asset forfeiture laws in the 1980s.)

          • DeWitt says:

            Cops mostly do a good job in the US. People take this for granted, but try travelling to some place where cops routinely ask for bribes, like Belize. Or a place like Mexico where you never really know what side the cops are on.

            Comparing American cops to Mexican or Belizean cops is disingenuous, because these are very different countries than the United States is. Compare them to their colleagues in Germany, the UK, the Netherlands, Ireland, and the comparison becomes much less flattering.

            US cops really have a tough time because the media does not cut them any slack at all.

            Cry me a river. This isn’t something you or I could hope to easily quantify, but it is trivially easy to find media writing articles along the lines of ‘local man dies, proving he is a pansy where it comes to policeman’s bullets.’

            You often see stories that are either very misleading or outright false.

            Yes, and this works both ways. Our journalists aren’t very good at all and I agree.

            Most of the problems are again from bad laws– like the asset forfeiture laws, or most of the drug war laws. (By the way, Joe Biden was heavily involved in expanding the use of asset forfeiture laws in the 1980s.)

            If the legislature were wholly divorced from law enforcement, this would be a good point. As it stands, policemen are some of the most fervent supporters of both these lawsets, because they give them more power and money. I might have agreed if they did not in fact work tirelessly to try and preserve these things, but for as long as they do it remains fair to assign part of the blame on the lobbying that is done to keep these laws enshrined.

          • zardoz says:

            Comparing American cops to Mexican or Belizean cops is disingenuous, because these are very different countries than the United States is. Compare them to their colleagues in Germany, the UK, the Netherlands, Ireland, and the comparison becomes much less flattering

            Germany, the UK, and the Netherlands are also very different countries than the United States is. And most of the ways that they’re different tend to make the police’s job easier rather than harder.

            Cry me a river. This isn’t something you or I could hope to easily quantify, but it is trivially easy to find media writing articles along the lines of ‘local man dies, proving he is a pansy where it comes to policeman’s bullets.’

            If it’s trivially easy, then go ahead and find me such an article from the last month or two from the NYT, WaPo, or HuffPo.

            If the legislature were wholly divorced from law enforcement, this would be a good point. As it stands, policemen are some of the most fervent supporters of both these lawsets, because they give them more power and money.

            The legislature is wholly divorced from law enforcement, though… at least in the sense you’re talking about here. The New York chief of police does not get a seat in the legislature, for example.

            If cops or police unions want to try to persuade people to vote for things, they have the same chance to do that as any other group. But that’s not really related to “effectiveness” which is what we were talking about.

          • DeWitt says:

            Germany, the UK, and the Netherlands are also very different countries than the United States is. And most of the ways that they’re different tend to make the police’s job easier rather than harder.

            Germany, the UK, and the Netherlands resemble the US a lot more than Mexico and Belize do.

            If it’s trivially easy, then go ahead and find me such an article from the last month or two from the NYT, WaPo, or HuffPo.

            It is trivially easy to find news sources that will defend the police come Hell and high water. That the news meant for people who aren’t very fond of the police isn’t itself fond of the police is no coincidence.

            The legislature is wholly divorced from law enforcement, though… at least in the sense you’re talking about here. The New York chief of police does not get a seat in the legislature, for example.

            If cops or police unions want to try to persuade people to vote for things, they have the same chance to do that as any other group. But that’s not really related to “effectiveness” which is what we were talking about.

            Yes. Also, the tax prep lobby is wholly divorced from American tax filing being a mess, farmers’ lobbying has nothing to do with the staggering amount of money that goes to corn, and American voters just love medical regulation a fuckton; the AMA does not play a role in this at all.

          • cuke says:

            I can recommend Michael Lewis’ The Fifth Risk on this topic of government agency competency.

            We all have anecdotal impressions of government incompetence — the DMV being a classic one. I’ve never had a difficult or unpleasant experience at any DMV in the dozen or so cities in eight states I’ve lived in forty years as a driver. I don’t at all doubt anyone’s unpleasant experiences. The number of unpleasant hours I’ve spent interacting with customer service entities of private companies (or say small businesses that do home repairs, etc) far outweighs anything I’ve experienced on the public side.

          • Edward Scizorhands says:

            I did a mini-review of The Fifth Risk here https://slatestarcodex.com/2019/05/15/open-thread-127-75/#comment-752642

            The lack of taking things seriously was foreshadowed. “No loose nuke yet, so what’s the complaint?” Might as well have been “no pandemic yet, so what’s the complaint?”

          • zardoz says:

            It is trivially easy to find news sources that will defend the police come Hell and high water. That the news meant for people who aren’t very fond of the police isn’t itself fond of the police is no coincidence.

            If it’s trivially easy, why can’t you find even one article that does it from the NYT, WaPo, or HuffPo? Those are all mainstream news outlets, not “news meant for people who aren’t very fond of the police.”

            Yes. Also, the tax prep lobby is wholly divorced from American tax filing being a mess, farmers’ lobbying has nothing to do with the staggering amount of money that goes to corn, and American voters just love medical regulation a fuckton; the AMA does not play a role in this at all.

            We’re not discussing whether the lobbying that police organizations do is good or bad. We’re discussing whether the police are effective. which is a different question.

          • DeWitt says:

            If it’s trivially easy, why can’t you find even one article that does it from the NYT, WaPo, or HuffPo? Those are all mainstream news outlets, not “news meant for people who aren’t very fond of the police.”

            No, it really is trivially easy even there.


            Policeman murdered, a lot of words talking about how valuable they are to the community and how much solidarity is shown. Easy.

            We’re not discussing whether the lobbying that police organizations do is good or bad. We’re discussing whether the police are effective. which is a different question.

            I’m not here to argue effectiveness at all, I’m here to argue whether or not they behave well. Their lobby trying its absolute hardest to preserve a set of laws that does little good to society because it might cut into their bottom line is a sign that they do in fact behave much more poorly than they ought to.

          • zardoz says:

            Policeman murdered, a lot of words talking about how valuable they are to the community and how much solidarity is shown. Easy.

            The cop died by getting shot through a closed door. It hardly seems like expressing sadness in that case is “defend[ing] the police come Hell and high water.” And half the article is about the conflicts between the current district attorney and the police. Which really gives the lie to your earlier statements about how police unions are all-powerful forces corrupting politics.

      • zardoz says:

        The British equivalent of the DMV is much better than the US version, from what I hear.
        Don’t assume that just because the UK government can do something well, that the US government can do the same.

        There are a lot of things the US government is not very good at. For example, US taxes are a nightmare. In the rest of the developed world, the idea of an average middle-class person buying special software just for taxes would be a joke. It seems to get harder and harder for the US to build infrastructure projects. Look at the failure of California’s High Speed Rail. USGov’s cybersecurity is poor. We got hacked like half a dozen times over the last decade and some of those hacks were extremely damaging (like the OPM one).

        It’s pretty reasonable for the average US citizen to look at the government’s track record of running things and say “hmm… nope.” The fact that Singapore or whatever does a bang-up job of something doesn’t mean that citizen is wrong. It’s simply not relevant to the discussion most of the time. The implicit arrogance of Democrats of assuming that we can “be like Europe, only better” is breathtaking, in my opinion.

        Even in Europe not every place is single-payer. Many European countries have an insurance-based system. They just manage it better than the US manages theirs. Noticing a pattern?

        Single-payer doesn’t mean that the government is Santa Claus, either. It just means instead of insurance company bureaucrats making the hard decisions, government officials will. In many cases, the decision is something like “the patient only needs one eye to see, so we’ll approve surgery to remove cataracts in one eye, but not the other” (actual NHS decision). Or the decision to refuse to pay for “heroic” medical care for an elderly person. (or was it really heroic? hmm.) Government-run medical services also often have long wait times. In Canada it can take weeks to be seen by a doctor for some things.

        • Lambert says:

          How much do people interact with the DMV, anyway?

          I sent off for my UK driver’s license by post. The folks who worked at the theory testing place and the practical test centre were fairly nice. Maybe if I owned a car I’d have to sort out road tax. I remember my parents going to the post office to sort out tax disks but I think that’s been streamlined with ANPR now.

          • Antistotle says:

            In the US, depending on the state, the DMV will handle more than just drivers licenses. Almost all states the DMV also handles car license renewals, and in some states it handles title transfers.

            *Today* most of the DMVs work well because a lot of the routine stuff is and can be handled online. 15 years ago that wasn’t true, and there is cultural knowledge that it sucks.

          • Garrett says:

            Here in Pennsylvania, much of what would normally be done by the DMV is outsourced to the AAA (American Automobile Association). Title transfers and the like. When I imported my car from Canada and went to get it titled in the US I couldn’t go through them and it was a pain, but I figure that’s just because transferring anything from out-of-country is a pain. Getting my license was trivially easy, though. I handed in my Ontario license, did a vision test and got my Pennsylvania license. I think it took me all of 5 minutes. Current license renewals only require going into the office to get an updated photo taken. Pretty much everything else is done reasonably-painlessly online.

          • The Nybbler says:

            AAA will act as an agent for title transfers in PA (it’s a service for members), but there are many other such services (which the DMV calls “messenger and agent services”).

            I believe you can do it yourself, but you have to go physically to Harrisburg.

        • SamChevre says:

          The thing is–the DMV has always worked fine for me. When I go to the DMV, a lot of the people having problems don’t have the right paperwork, or don’t have a clear idea what they need, or something.

          But a medical system can’t work well only for people who show up at a not-too-busy time, with exactly the right paperwork, all in order. It needs to work for people who are having psychiatric episodes, or are elderly and forgetful, or were just hit by a car while out running. “As good as the DMV” is not good enough.

          • Del Cotter says:

            This is, I suspect, the difference. Our interactions with the DVLA are smooth and businesslike (and these days internetty). The stories I hear from Americans are of travel, queues, hot crowded offices, and spiteful officials.

            [dammit why am I navigating this forum so incompetently? that was meant to attach below Lambert’s]

        • Antistotle says:

          > (like the OPM one).

          That wasn’t a “cyber security” hack. That was straight up traditional espionage. The OPM hired contractors who hired a Chinese national to do work where *anyone* in that position would have had access to the information he stole.

          My data was exposed in that breach–I was actually *working* in a TS/SCI facility around the time that happened.

          Which doesn’t mean you’re wrong–it just means the USG fucked up in a completely different way in that case.

          • Garrett says:

            Around that time I tried to reach out to the US government to see if it was possible to refuse to hire someone who had work authorization in the US but was otherwise a national with strong ties of a foreign nation which was engaged in espionage against US corporate activities. I was told that was not allowed. The US regulatory environment is working against itself.

        • Loriot says:

          To be fair, the high speed rail project was a bad idea to begin with.

          And it hasn’t completely failed. IIRC some of the funds went to upgrades of the regular Caltrain lines, which seems like a good idea to me.

          • scj1091 says:

            Off-topic but worth pointing out that it’s not quite accurate to use the past tense. Much of the work related to the project – engineering, real estate appraisal and acquisition, utility relocation, etc is still continuing even now to some degree. It’s kind of like the Wile E. Coyote when he chases the roadrunner off the cliff – it hasn’t quite realized it’s currently standing in mid-air.

    • Scott Alexander says:

      How do things work in Australia?

      • Alex says:

        I’m a bit fuzzy on the details but I think pretty much:
        – the government sets out the estimated cost of various medical services
        – Medicare covers 85% of this cost
        – 4% of your taxable income goes to Medicare (plus another 1.5% for higher earners)
        – there is the opportunity for private insurance, and you get a tax rebate

        Here’s an article that explains it:

        I’m slightly embarrassed that I don’t really understand how it works… I just go to the doctor, they charge me, then I put my card back in the eftpos machine and get most of the money deposited straight back into my account. Unless the doctor bulk bills, in which case they sort it out directly with the government.

        Oh yes, and if you have more than $1000 out of pocket costs per family in a calendar year, the size of your rebate increases for subsequent services (“Medicare safety net”). That’s never happened to my family. Got close one year, but not quite.

      • Lattice says:

        At a very broad level Australia has a two-tier system, with a universally available public healthcare system, coupled with very wide takeup of private health insurance. A few features worth noting:

        1. The public healthcare system isn’t just a replacement for insurance, the entire network is public. So, akin to the NHS (minus the curious British fanaticism for their system), the Australian public option owns hospitals, employs doctors/nurses/staff, as well as dealing with the financing side of things.
        (N.b. The comparison with the NHS oversimplifies, because the financing side of things (‘Medicare’) is Federally run whereas public hospitals are usually (always?) State-owned. I don’t know enough about that interaction to comment.)

        2. Takeup of private insurance is extensive. According to this article from 2018 ~45% of people had private health insurance.

        3. Takeup of private health insurance is incentivised by the government through a couple of schemes. First, the Medicare Levy Surcharge. The Australian Taxation Office’s website notes that ‘MLS is designed to encourage individuals to take out private patient hospital cover, and, to use the private hospital system to reduce demand on the public Medicare system.‘ If you earn above a certain amount annually (AU$90,000 for a single person, or ~US$57,000), and you do not take out private health insurance, then you pay an extra 1% income tax, which (I think gradually) steps up to 2% at higher rates of income. Second, if you earn a low(er) amount (I think anything less than AU$90,000), you qualify for the Private health Insurance Rebate, which does what it sounds like: the government helps to pay your insurance premiums. (The highest income tax bracket is 45% excluding the Medicare Levy, so if you are a very high earner and don’t get private health insurance, you effectively pay 47%. If you do insure yourself, you pay 45%.)

        4. Many (if not most) doctors do work both at private and at public hospitals. So a surgeon might work 3 days per fortnight at a public hospital, and the rest of the time work at a private hospital (earning significantly more). This means that there’s no (or little) pooling of talent in the private system, although waiting times can be longer in the public system and you generally have much more control over which surgeon performs your procedure if you go private.

        5. The level of co-operation between the public and private systems is extremely high. Take for example Royal North Shore Hospital, a large public hospital in Sydney. On the same site – about 50 metres apart – stands North Shore Private Hospital. A privately insured patient might stay in the private hospital, literally be wheeled across to the public RNSH for surgery to take place in an operating theatre there, then transferred back to the private hospital once their stay is finished. This high level of co-ordination and co-operation is, it seems, made so easy by the fact that the doctor doing the surgery “at” the private hospital (although physically within the public hospital’s operating theatre) also works several days a week “at” the public hospital. Surgeon needs to talk to someone in the public hospital about arrangements for a particular private patient? Easy, he works with them. Importantly, this mostly happens on the hospital-side, so the patient doesn’t have to deal with too much of it. Not perfect, but it works.

        In all, it seems better both than (1) America, for obvious reasons, and (2) a fully-public system like the NHS, which, if one believes the newspapers, is running on a shoestring. How it compares to systems in non-Anglophone countries, I don’t know.

        Edit: three more comments.

        6. I don’t believe that there are insurerance ‘networks’. Insurers will cover treatment from doctors/hospitals, without requiring that you go to an approved doctor/hospital. There are hints of it (e.g. Bupa will cover more of the cost if you go to a Bupa-branded optometrist for your spectacles, although it will still cover a certain chunk wherever you go), but not when it comes to doctors themselves (I think).

        7. Generally, people select and pay for their health insurance themselves, and don’t get it through their employer. I think one reason for this is that providing health insurance to your employee would be a ‘fringe benefit’ (akin to a company car, gym membership, etc) and so subject to a Fringe Benefits Tax rate of 47% payable by the employer. (Notice that 47% is equivalent to the highest rate of income tax, 45% plus the 2% medicare levy for very high earners.) If you’re in, say, the second-highest tax bracket, your income tax rate will be 37%. Why would your employer pay for your health insurance and then pay tax on that at 47%, if it can simply pay you a smaller sum (on which you pay tax as income at 37%) for you to get the same product, and save itself the administrative hassle?

        8. Health insurance premiums are closely regulated. This page contains some detail, but it seems that insurers who want to change their premiums are required by law to apply to the relevant government department to do so.

        • Del Cotter says:

          curious British fanaticism

          Two words: culture war. Have you noticed how liberals are not just a little in favour of some culture-warry thing, but bizarrely fanatically for it? This is a political dynamic like that.

          You can’t understand the positive vibes you get from British people unless you understand it’s only most British people. A minority hate the NHS, fought to stop it before it was even born, and now fight to kill it, (or starve it of funds if that’s all they can do for now, because that’s a win-win, in that it helps to increase dissatisfaction that can be used to argue for killing it).

          Why do you not hear about it more? Because it’s a shameful position to take, like being actually in favour of drowning puppies, so they just work in the political background.

          • Anteros says:

            Yes to this. I’m not a big fan of the NHS generally, philosophically or pragmatically, but as a rule I keep my mouth shut about it – there’s no good way to explain why you are in favor of drowning puppies.

          • Tarpitz says:

            I’m a bit surprised I’ve never met any of these people – or that if I have they’ve never mentioned their private opinions to me.

            I’m a Tory voting, libertarian-leaning upper middle class Oxford alum whose views on the NHS – public and private – are approximately “it’s not how I’d build a healthcare system if I was starting from scratch, but it’s reasonably cheap and not too bad and the disruption attendant on major changes would be very bad indeed, so I’m inclined to leave it alone unless someone comes up with an idea that’s obviously much better rather than just probably a bit better.”

            I have friends who have worked for right wing think tanks and been Conservative parliamentary candidates and been advisors to Boris Johnson, and anyone who knows me at all knows I’m not inclined to get outraged by heresies. I’ve got drunk with these people. And I’ve never, ever heard any of them express this position.

            So if these people exist, they are playing it damn close to the chest and there aren’t very many of them. It might be cultural terrorism, but I don’t think it can count as culture war when one side is several orders of magnitude more numerous than the other.

            What I do see is a lot of otherwise mostly reasonable left wing people who are convinced that the only way to protect the NHS from unending Tory plots to destroy it is Constant Vigilance with a side order of hysteria.

          • Simon_Jester says:

            Hypothesis One:

            This is a deliberately engineered conspiracy to prevent a correct and rational minority from reforming a deeply flawed British health care system by making it a thoughtcrime to propose an obviously superior system.

            Hypothesis Two:

            The reason most people consider killing the NHS to be about as unacceptable as drowning puppies is because they are being largely rational about the idea in aggregate… And that killing the NHS is about as bad an idea as drowning puppies.

          • TheAncientGeeksTAG says:

            Two words: culture war. Have you noticed how liberals are not just a little in favour of some culture-warry thing, but bizarrely fanatically for it?

            You say that as though conservatives aren’t. It takes two to gave a culture war.

          • Lambert says:

            It’s not just a Left-wing thing.

            What other public body could the (in)famous Brexit Bus have mentioned and not get laughed at?

          • Del Cotter says:

            FINE! Conservatives do it too, okay? My point is, culture wars drive purity spirals. On both sides, if you want me to spell that out.

          • Del Cotter says:

            Sure, Tories wuv the NHS, they just want to help it in its troubles, by reforming it a little. I don’t believe it. They voted against it in 1946 and 1948, and I don’t think they’ve changed their minds since.

            The politics phrase we’re not using, but should be, is “third rail”. The 50 kilovolt one.

          • Robert L says:

            I have lived in England all my life. I can echo word for word what Tarpitz says above (or possibly below) including the bit about being a well off Oxford graduate but excluding knowing personally advisers to Boris Johnson. These NHS haters are a paranoid fantasy to the extent that I don’t think anyone would claim they exist on a UK-facing website. What I do loathe is the promotion of the NHS as a quasi-religion which was largely responsible for the disastrous Brexit vote, but that is another issue altogether.

          • Del Cotter says:

            Anteros just stepped forward as one.

          • thisheavenlyconjugation says:

            There is a weird civic religion thing around the NHS (which like all sensible people I think is “fine, works about as well as many quite different systems in Europe but even if one of those would be significantly better any change would be too disruptive”). I approve of this, as a healthy outlet for patriotism.

          • Tarpitz says:

            I’m not saying that there is literally not a single person in Britain who wants to abolish the NHS (and God knows if you were going to find one anywhere it would be on SSC). I’m saying they are a tiny and powerless minority, not a side in the culture war. Britain has had Tory or Tory-led governments for well over half the time since the foundation of the NHS. Every single one of them has increased NHS spending in real terms. Such privatisation of healthcare provision as has taken place was overwhelmingly under Blair. The Tories are about as likely to radically change the healthcare model as they are to recriminalize homosexuality.

          • po8crg says:

            The British fanaticism for the NHS is essentially about branding.

            Every interaction for the vast majority of Brits with healthcare is with the NHS. So the NHS to most Brits is a brand for the concept of healthcare itself. If your conception of all health treatment was “using the NHS”, you’d be pretty keen on the NHS too.

            There are about 100 private hospitals, but they are almost all solely for elective surgery, and will transfer patients to the NHS in case of severe complications. They’re also much smaller than that 1100 or so NHS hospitals, and those have all the A&E (ER) departments, and all but one of the ICUs. It’s obviously the case that healthcare provision in the UK would be catastrophically bad if the NHS disappeared.

            Of course, any realistic proposal would include NHS facilities being transferred to other ownership, not bulldozing all the hospitals and sacking all the doctors. But the branding of the NHS as being the ability to go to the doctor at all has been very successful.

            People everywhere are generally keen on doctors and nurses, because they keep us alive. The NHS branding operation has essentially brought that mood affiliation over to the NHS as an organisation.

          • Tatterdemalion says:

            I think there are two main reasons why British people are so keen on the NHS – common sense and America.

            Firstly, the NHS really is an extremely good way of delivering health care. It delivers outcomes comparable to those of most other first world nations for less money per capita and, critically, it places more of the burden of that expenditure on the rich and on the healthy, and less on the poor and on the sick, than most other systems. That means that the NHS is even more “cheaper” than most other country’s systems if you think in terms of utility cost instead of financial cost, which I think you should. Like most Britons, I think that it genuinely is a very good system.

            Secondly, and less rationally, America looms incredibly large in the British popular consciousness. That means that most people think of the natural alternative to the NHS as being not the relatively sensible systems found in most other countries, but the appalling absence of one found in America, and are therefore very positive about the NHS because of the comparison shopping effect.

            That effect is exacerbated because the few people who speak up against the NHS are, pretty much tautologically, economically far-right cranks (Daniel Hannan is the highest-profile example I can think of), and those types tend to admire America much more than the rest of the world, so if they were to get their way I think there’s a real risk that’s where they’d take their cues from.

        • AlphaGamma says:

          It should be noted that your points 4 and (perhaps to a lesser extent) 5 are also true in the UK. It’s normal for senior NHS doctors to see private patients one or two days a week. While I’m not sure how much patients get moved between hospitals, there are private wards inside NHS hospitals which use some of the NHS hospital’s facilities (operating theatres, scanners, etc).

          • Lattice says:

            It should be noted that your points 4 and (perhaps to a lesser extent) 5 are also true in the UK. It’s normal for senior NHS doctors to see private patients one or two days a week. While I’m not sure how much patients get moved between hospitals, there are private wards inside NHS hospitals which use some of the NHS hospital’s facilities (operating theatres, scanners, etc).

            That’s interesting, I wasn’t aware of that.

          • thisheavenlyconjugation says:

            And the NHS sometimes put people in private hospitals.

          • zzzzort says:

            I had a surgery in a NHS hospital, and spent a night in the private ward because my bed wasn’t available yet. I presume they share the same operating facilities. Interestingly, the private ward seemed to cater to medical tourism; signage was repeated in arabic, chinese, and a few others.

      • wheeler says:

        Setting aside the structural differences, Australian doctors are allowed to be more sensible (due to the different legal framework), which also allows them to be more agenty.

        Here’s an illustration by anecdote of a visiting American (which rhymes with my experience):

        The next morning, Rachel and I walked 5 blocks to a clinic, found it was closed, and walked further to the RealCare Health Clinic. I was finding it very hard to walk at this point. Dr. Edward Petrov saw me, gave me some therapy for reflux, found it wasn’t reflux, and got concerned, especially as having my heart checked might cost me something significant. He said he had a cardiologist friend who might help, and he called him, and it was agreed we could come right over.

        We took a taxi over to Dr. Georg Leitl’s office. He saw me almost immediately.

        He was one of those doctors that only needed to take my blood pressure and check my heart with a stethoscope for 30 seconds before looking at me sadly. We went to his office, and he told me I could not possibly get on the plane I was leaving on in 48 hours. He also said I needed to go to Hospital very quickly, and that I had some things wrong with me that needed attention.

        He had his assistants measure my heart and take an ultrasound, wrote something on a notepad, put all the papers in an envelope with the words “SONNY PALMER” on them, and drove me personally over in his car to St. Vincent’s Hospital.

        Taking me up to the cardiology department, he put me in the waiting room of the surgery, talked to the front desk, and left. I waited 5 anxious minutes, and then was bought into a room with two doctors, one of whom turned out to be Dr. Sonny Palmer.

        Sonny said Georg thought I needed some help, and I’d be checked within a day. I asked if he’d seen the letter with his name on it. He hadn’t. He went and got it.

        He came back and said I was going to be operated on in an hour.

        […] In Australia, it is looking like the heart operation and the 3 day hospital stay, along with all the tests and staff and medications, are going to round out around $10,000 before the insurance comes in and knocks that down further (I hope). In the US, I can’t imagine that whole thing being less than $100,000.

        [Note: I don’t think that price is government subdized — Medicare does not extend to US tourists.]


      • Antistotle says:

        I spent 2 years living in Alice Springs working for the US Military (broadly speaking).

        I can’t speak to the insurance system because I was on US insurance (sort of) at the time, but I did have to interact with the Aussie health care system several times.

        One of the things I really liked about AU was that they have a three tiered (at least) pharmaceutical system. They have OTC stuff (like we do), and prescription only stuff (like we do), but there’s a middle tier where you have do NOT have to consult with a physician, but do have to have a conversation with the pharmacist. This meant that I could get mild muscle relaxants, Acetaminophen with codeine (IIRC) etc. and that women could get birth control pills with a 5 minute “free” conversation.

        Also they consider physical therapists to be “real” doctors and you can see one without a referral. This means that for a lot of injuries you can skip an expensive doctors visit.

        On the other hand I had to go in for major surgery at one point, and a thunderstorm knocked out power to the building. They did not have a backup generator (this was in a “major” city) for the hospital which meant they finished sewing me up by torch light. Fortunately they were done with the major work. Oh, and the surgeon fucked off to South Australia for a holiday the day after the surgery so I was stuck with a drain for an extra 3 days–which probably isn’t so much the system as the doctor.

        • Garrett says:

          > which probably isn’t so much the system as the doctor

          Any system which would allow the doctor to do this without pre-arranging for competent coverage to deal with after-care *is* a systems problem.

    • johan_larson says:

      No one in their right mind would design the current American system. It is the way it is because of a long series of decisions and actions, some of them dating back more than a hundred years. The system has been repeatedly patched and repatched and mostly works. There are real problems, sure, but the system survives because it delivers a satisfactory solution to a large part of the citizenry.

      According to polling, roughly 70% of Americans are satisfied with their own healthcare coverage, 80% are satisfied with the quality of their own care, and 60% are satisfied with the price of their own care. These are not numbers that bode well for anyone pushing for radical reform.

      Reformers also have the problem that most of them envision a larger role for the government, an institution most Americans really don’t trust. Only about 20% think you can trust the government all or most of the time.

      Bottom line, I expect the system to mostly trundle along for the next generation.

      • Murphy says:

        I’m gonna be honest, I love the NHS…. but I wouldn’t trust the US government to run something like it. They’d find some way to fuck it up.

        I wouldn’t even really trust the UK government to run the NHS. It’s only the fact that the UK has the civil service that I believe makes it work well.

        • Lambert says:

          It’s one of those arms-reach QUANGO thingies that everyone was talking about when I was younger, isn’t it?

          • Tarpitz says:

            Yes – NHS England is a “non-departmental public body”.

            My (fairly left wing, not very politically engaged) sister-in-law used to work for it. She hated it, precisely because she found it institutionally shambolic. I showed her Cummings’s essay about his dealings with the Department for Education and the Civil Service more broadly while working for Gove, and she said it mirrored her experiences almost exactly.

            The purchasing foul-ups during the current crisis don’t exactly fill me with confidence in Sir Humphrey either.

          • Garrett says:

            > The purchasing foul-ups during the current crisis don’t exactly fill me with confidence in Sir Humphrey either.

            I’m sure that can be remedied if only the government would authorize the hiring of a few hundred more purchasing clerks.

        • OutsideContextProblem says:

          What do you see as the distinction between the government and the civil service?

          • Murphy says:

            Honestly… yes minister somewhat gives a window into it.


            The civil service is the body that actually runs things. Government decides policy goals.

          • Fishbreath says:

            To expand on Murphy’s answer, it’s a separated-by-a-common-language thing. Americans use ‘the government’ to mean both elected officials and the administrative state. British English seems to use ‘the government’ to mean elected officials and ‘the civil service’ to mean the administrative state. I don’t know if they have a catchall term like the US use of ‘government’.

          • Alexp says:

            There’s also a sort of constitutional/legal difference, if you believe in the Unitary Executive Theory. I’m not a lawyer, so this is in very broad strokes, but it generally makes it more difficult to establish a civil service independent of political control in the United States.

          • zardoz says:

            It’s the deep state.

            But only the relatively shallow part of the deep end. Like the 10 foot deep section in the middle of the swimming pool, not the 20 foot deep section under the diving board.

        • Del Cotter says:

          Please don’t always make everything about the NHS. There are a hundred universal healthcare systems in a hundred countries, and almost no one thinks the NHS is the best system. Anyone who does is probably just ignorant and addicted to chanting “we’re number one!” like they’re at a sporting event.

          There must be some system out there that Americans would be comfortable with. The one thing the hundred countries agree on is that USA is the Mississippi of health care, as in “Thank God for Mississippi”.

          • Murphy says:

            It’s a good system but I can talk about it’s flaws at length.

            it is however reasonably simple in some ways, you don’t have to worry too much about a german style “well insurance companies do blah and government does blah and..” you can just sort of point to the one big government budget line item and say “yep, that’s the NHS”

            I’m certain a better system than the NHS could be built and I know some fairly senior medical folks who spend their time banging their heads against some of the flaws but they do indeed seem to have a “Thank God for Mississippi” attitude to the US system .

          • Del Cotter says:

            It’s not whether it’s good or bad, it’s whether it should be the only thing considered as an alternative. It’s like being in the the supermarket next to a hundred kinds of cheese, and when someone asks if we should try something other than cheddar for a change, and one’s like “oh yeah, I love stilton!” and other’s like “no, I don’t like it so we have to stick to cheddar”, and the conversation is always about stilton versus cheddar, and brie, emmenthal, ricotta, feta and gjetost are like “are we jokes to you?”

          • thisheavenlyconjugation says:

            In fact, out of all the universal healthcare systems in the developed world, I think the NHS is perhaps the least suited to adoption by the US — it has the pinko funding method of general taxation, but furthermore it’s got high levels of centralisation and government involvement even compared with similar systems. It’s between that and Canada (with the weird banning private health insurance thing). Unfortunately these are the two most natural points of comparison for Americans.

          • Del Cotter says:

            in the the supermarket

            did it to myself

      • On the other hand “… regular Americans en masse don’t have any other experience to compare to”. People with experience of public healthcare systems also have high levels of satisfaction [*]. They can’t both be objectively correct.

        [*] To the extent that there is almost no anti-NHS movement. People who think the NHS should be broken up and privatised are about as numerous and as popular as Satanists in the UK.

        • Matthias says:

          Satanists are more popular.

          The NHS is a sacred cow.

          There surely is an optimal level of finding for the NHS. But saying anything but: ‘the NHS deserves more money’ is political suicide. Not just for politicians, but in your normal social life as well.

          It’s just like ‘we need to do more about crime’ or ‘we need to do more for vulnerable children’.

      • Simon_Jester says:

        Distrust of “the government” breaks down into some pretty important subheadings.

        As an example, there are Americans who distrust the government because it protects black people too much. Simultaneously, there are Americans who distrust the government because it protects black people too little.

        There are Americans who distrust the government because it doesn’t protect the environment adequately and is in the pocket of big polluting industries. There are Americans who distrust the government because it imposes choking environmental regulations on job-creating industries.

        There are Americans who distrust the government because they’re afraid the Democrats will take over and emasculate the military and leave the US defenseless against aggressors. There are Americans who distrust the government because they’re afraid the Republicans will take over, inflate the military budget wastefully, and invade random Third World countries for ill-advised reasons.

        There are Americans who will distrust the government when the president makes deals with business buddies and funnels them millions of dollars of lucrative contracts. There are Americans who will distrust the government when the FBI tries to investigate the president’s dealings with his business buddies.

        The takeaway lesson from all this is that asking an American “do you trust the government” is a lot like asking “do you approve of Congress?” Congress has a very low approval rating- something like 10 to 20 percent as I recall. But individual members of Congress have approval ratings that are much higher- often 55%, 60%, or more, which is unsurprising given that they keep getting re-elected.

        What’s going on under the hood is that there are competing visions for what the US government should look like and what American society should look like. A lot of people distrust the government because they think their political rivals are influencing it in a way incompatible with that vision, not because they have specific object-level beliefs about how the federal bureaucracy is actively more likely to cheat them than, say, their insurance company.

        • Mathematicae says:

          We could have done without you bashing your outgroup in the first 4 paragraphs, but setting that aside the point you raise is actually only partially correct.

          It’s true that Americans often distrust the government because they worry that the enemy tribe will use it as a weapon against them. Meanwhile they also worry that insurance companies will cheat them to make more money. The problem is, the motivation for the enemy tribe is much stronger than the profit motive. The enemy tribe doesn’t just want your money, they want your mind and soul as well. They will try much harder and try for much more intrusive wins then the insurance company.

          C.S. Lewis said it far more eloquently than I ever could.

          Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

          • Chris Phoenix says:

            Go back and re-read. The first four paragraphs were remarkably even-handed. I think maybe you only skimmed the first sentence and then decided what they probably said.

          • Noumenon72 says:

            I was also thinking while reading that post, “Wow, they’re passing one ideological Turing test after another”. Who is the outgroup, “people who distrust the government”?

    • Bugmaster says:

      I am an American (sort of), and I don’t like the healthcare system, and I can definitely envision some alternatives… but… I can’t see any way of changing our current system in a substantial way. Obama tried, and failed, and I was honestly surprised he got as far as he did.

      FWIW, I also know some people I know moved to Europe specifically to have kids — because child care is so much better over there.

    • Steve Sailer says:

      Yup, the American system is lousy. And I say this as somebody whose life was saved 23 years ago by the first monoclonal antibody against cancer, a triumph of US high cost system.

    • zzzzort says:

      To add to the string of anecdata, I had more or less the same major surgery, and attendant scans, consultations and follow ups, in both the US and the UK. tl;dr I much much preferred the UK system. I had good insurance in the US, and in fact my out of spending was probably a bit lower (In the US had a private room with a couch big enough for my partner to sleep on, otherwise she would have gotten a hotel room). The care in the US was fancier; better food, the aforementioned private room, a TV. The doctor’s office was better decorated, the hospital furniture seemed newer. But the insurance system made everything so much worse. The surgery was delayed by more than a month because one surgeon retired, and they wouldn’t approve another one even though their referral system initially chose him. Other procedures, including non-emergency but still quite urgent ones, were delayed to get approval. I spent two different half days in CT scan waiting rooms while approvals went through, and did a 18 hour fast while recovering for surgery only to have the diagnostic cancelled because the insurance was too slow. I estimate I/my partner spent ~30 hours on the phone arguing with various people. The NHS, on the other hand, was amazingly quick, did all the health things well, and it turns out having roommates in the hospital is actually pretty nice.

      • Garrett says:

        The arguing-on-the-phone thing would be nice to fix. I wonder if we could mandate that health insurance companies rebate people for the time they spend on the phone. Something like $20/hour.

  4. mudita says:

    My last post didn’t really go to deep into why I hate the health insurance system so much.

    I was confused for a moment, because it seemed to me like you wanted to speak out against health insurance systems in general, in favour of unorthodox healthcare systems like the Amish’s, but your post seems to be about the US health insurance specifically, which is uniquely horrible. For example the German health insurance system is far from well-designed, but most of these situations could not happen here.

    You might want to change “health insurance system” into “US health insurance system” to avoid this moment of confusion for international readers.

    • LadyJane says:

      For example the German health insurance system is far from well-designed

      Germany is generally considered to have one of the best healthcare systems in the world, maybe even the best, so either you’re way off or you have some impressively high standards for what counts as “well-designed.”

      • Murphy says:

        or you have some impressively high standards for what counts as “well-designed.”


      • Matthias says:

        Singapore would count as well designed.

        It’s cheaper than the German system, too.

        • thisheavenlyconjugation says:

          Singapore is an outlier adn should not be used as a valid point of comparison, at least unless you can demonstrate that the lack of democracy isn’t an active ingredient (of course if you want to bite that bullet that’s fine too).

      • eigenmoon says:

        Oh no no NO.

        The doctors are in very short supply because it’s very hard to become one. I know a doctor to whom you’d need to make an appointment 6 months in advance.

        The insurance would pay for a therapist, but you still need to find one with a free slot in the near future. Good luck with that.

        • Garrett says:

          That doesn’t make a lot of sense to me. The Franco-German model of EMS involves sending a doctor on most/all EMS calls. (The US/UK model almost never sends a doctor and instead transports the patient to the hospital for physician contact). This only makes sense to me if there is a very large supply of available doctors such that they can be used for low-utilization tasks such as ambulance services.

        • Robin says:

          Indeed, phoning through a list of therapists and making appointments for months ahead, that is not what a depressed person should be having to do. See e.g. here for some experience with this. Here’s an article from Spiegel about that.

          Another thing is the separation between state insurance and private insurance. Whoever earns more than some limit, or is self-employed, can have a private insurance, which is often much cheaper if you enter young. But expensive (or you get refused) if you are old or ill. Poor people are stuck with the state insurance, where care is notoriously worse. E.g. doctors might have separate waiting rooms with better espresso machines for private patients, which they cannot even use because their waiting time is so short.

          If you change from state to private, your dentist might suddenly find some things your teeth urgently need (which the state insurance wouldn’t have covered).

          If you want to change back, you can’t. Only if you are unemployed for a few months, they take you back.

          Good thing about state insurance: The non-earning housewife and the children are insured for free. A system from the past. But if the wife earns and is privately insured, she must insure the children privately.

          For private insurance, you have to read the fine print. Here’s a story of a girl who needs a wheelchair after an accident, but her father’s private insurance would only cover 20%. Sometimes the state insurance can be better.

      • Lauro says:

        There is no best system. There are always trade-offs between different desiderata. Furthermore, which desiderata one finds important and how one balances them obviously depends on one’s values.

        German health insurance is pretty expensive compared to many other countries. We had a British working here for some years who complained all the time how much of his income goes to health insurance. On the other hand, the service seems to be a bit better than in Britain. The whole system is heavily regulated. One may dislike the strong involvement of the state, but that just shows again that any evaluation depends on one’s values. A good report on the German system is

        My impression is that for those who can afford it and get it the American health care is the best in the world. Like with many other areas, American doctors, nurses, therapists, etc. are on average just a bit more hard-working, more innovative, more dynamic, better educated, and more professional than the rest of the world. If you have some standard ailment, which may comprise 90% of doctor visits, then there will not be a big difference between the therapies in the US and most other western countries. But in the remaining 10%, there may be substantial differences.

        I had several short encounters with psychotherapy in Germany. The therapists were quite awful. What as offered has little to do with science and evidence. Germany is decades behind the US in these areas, it seems to me.

  5. Machine Interface says:

    Yeah but that and thousands of preventable deaths from poor people in their 30s is a small price to pay so that a handful of Americans can get 5 years of additional life expectancy due to marginally better cancer treatments in the US!

  6. theredsheep says:

    I’ve worked in pharmacy for four years, and I’m pretty sure that basically all pharmacies could run on a short-order basis if the insurance system, as we have it now, did not exist. That is, you could hand us the script, wait five minutes, and buy it. With an experienced crew, it would be simple to enter the script, have the pharmacist check it, and count the pills. There are aggravating government regulations to deal with, but the part where you have to enter four different finicky non-intuitive codes for every patient, make sure all the documentation is checked off, send the script to be approved, wait for it to tell you they don’t like that med or you need to enter a 1 in this box or you entered one of the codes incorrectly or the patient gave you an old card …. that right there is pretty much all the delay, all the reason why you go to the pharmacy and hear that it’ll be an hour and a half before your thirty sertraline will be ready for you.

    • Murphy says:

      That is, you could hand us the script, wait five minutes, and buy it.

      In the UK my GP prescribes something, their system is linked to the pharmacies and knows which pharmacy I’m at , I walk out of the doctors office and across the street and the pharmacist has it in a neat little paper bag in a cubbyhole before I walk in the door of the pharmacy.

      • CatCube says:

        That’s how it works at Kaiser or in the military in the US. (Maybe other places–those are the ones I have personal experience with.) TBF, it’s not quite as seamless as you’re talking–there’s usually a bit of a wait, but it’s just “go pick it up downstairs.”

        • Simon_Jester says:

          This is unsurprising. Kaiser’s model, and for that matter the military’s model, is of a single integrated bureaucracy for handling the logistics of prescribing and distributing medical care. This is almost always going to outcompete two or three interlocking bureaucracies that have conflicting interests and non-interfacing record-keeping requirements.

          To quote… some World War One French politician who I believe was tired of having different commanders bickering and fighting for influence over who should be in charge of planning an offensive:

          “It is no longer a question of one general being better than another. It is a question of one general being better than two.”

      • Edward Scizorhands says:

        I get that in America, too. I have a lot of complaints about the insurance system, but drug delivery to the end-user works pretty good.

    • sharps030 says:

      > That is, you could hand us the script, wait five minutes, and buy it.

      Wait, hang on. That’s exactly how it works in NZ. I hand the script in at any pharmacy, wait 5-10 min depending on their workload, receive my pills and pay $5 per medication for everything funded by PHARMAC. My regular pharmacy always has what I need when I need it, as it’s pretty predicable: other places have given me one (of three) months’ worth and a script for the remainder.

      An hour and a half wait is just silly.

      • theredsheep says:

        Strictly speaking, it’s not a wait; “wait” refers to patients who are willing to hang around the pharmacy for fifteen/twenty/thirty minutes while the staff prioritizes their stuff. An hour and a half is for people who aren’t in a particular hurry and are willing to come back later. At least, that’s the standard at both retail pharmacies I’ve worked at.

  7. PTinNZ says:

    I don’t think I’ll ever complain about our health system here in NZ ever again (ok, so that’s probably a lie).
    At least here everyone is guaranteed free health care, subsidised medication etc. Yeah it can be sluggish at the bottom with long wait lists for things or not even being put on a wait list; hospitals get fined if they don’t fulfill their wait list obligations so they get around this by not putting people on it lol. But, there’s always the private sector if you don’t want to wait for a spot on the public bench.
    My daughter has medical insurance and I’m amazed at the quality of the health care she gets. In this way private medical insurance is a great add-on to our public health system.

    • OutsideContextProblem says:

      Healthcare in NZ isn’t free in the same was as it is the UK. It is heavily subsidized though (except for dentiisty, optometry, mental health etc). You’ll pay out of pocked to see a GP, and different DHBs have different sets of charges for services. NZ healthcare system does have it’s own unique problem with the DHBs – 20 inconsistent approaches to medicine, each with unique systems and processes, and set of highly paid executives, in a country of 5m. I’d abolish them all if I could.

      • PTinNZ says:

        Yes, we pay to see a GP. $50 NZD is the norm. Dentistry is free for kids but doesn’t extend to braces etc. Mental health is free ASAIK. I’ve never had to pay for any mental health services that I’ve used. I’ve also never paid for any health related service from DHBs either. I do know they have charges for some things but I understood that it was a case of ‘wait or pay’.
        The system is most problematic for non-urgent things like the sinus infection I’ve had for four years; can’t even get on a wait list to see a specialist.
        The challenge is the leap from free to paid is way beyond my wallet and there’s no in between.

  8. ThomasStearns says:

    What do people here think of the argument that the employer-based system may well be a new deal relic, but being employed is also a pretty good signal/screen that you’re not going to be a healthcare super-consumer? Countries that mandate private insurance coverage also need to make the coverage shittier, because there are way more sick people in the risk pool absent this type of screen…

    • Lambert says:

      Providing care for the disabled and chronically ill is generally considered a feature, not a bug. /snark

    • mitv150 says:

      It is my understanding that employer based health care originated during WWII, due to wage controls. Health insurance was a fringe benefit not subject to wage controls, and thus could be used as a hiring incentive. Later, it was determined that health insurance was subject to union collective bargaining, and away we go.

    • End of life care is the highest cost., so most people end up as super consumers.

      • keaswaran says:

        But this is mostly done by Medicare, while the employer system mainly only deals with working-age people, so they don’t get people during their super-consumer years.

    • North49 says:

      If insurance wasn’t tied to employment you could still select a plan based on your relative health to keep the pool costs lower.

    • Matthias says:

      High deductibles can sort out the incentive problem.

    • zardoz says:

      One of the big things that employer-provided healthcare does is implement risk pooling. You have young employees and old employees both paying into the same pot. This lets the old ones draft off of the young ones. (Yes, technically the corporation is paying, but it’s ultimately coming out of people’s total compensation.)

      You don’t get this with individual insurance. From what I hear, individual premiums for older people are not very affordable.

      • SamChevre says:

        This is important: the tax subsidy for employer-based health insurance makes for more sense if you think of it as a badly-designed subsidy for the employees and families with predictably high health care costs.

        My preference would be to explicitly direct subsidies to people with high predictable costs, but the employment system does a fair bit of that indirectly.

      • scj1091 says:

        Isn’t risk pooling *the point of insurance*? I’ve heard this argument before, so I’m not attacking you in particular, but I still don’t understand it. The whole point of insurance is that not every policyholder will have a claim in a given period of time, so you pool risk and spread out the costs over a larger number of people and a longer timeframe. If this is the point of insurance, why do we need another layer of risk pooling on top of that?

        Anecdotally, the problem with individual insurance isn’t with older people, it’s with everyone. When I first got an individual insurance policy as a college student (Blue Shield much cheaper than the college-provided plan) I had a catastrophic care plan with something like a $10,000 deductible that cost in the neighborhood of $75/mo. Not too bad for a healthy young male with no dependents. Fast forward 10 years and the cheapest plan my youngest sister could find for a healthy young woman with no dependents was…$350/mo. That’s not unaffordable for sick old people, that’s unaffordable for *everyone*.

        • SamChevre says:

          (I’m an actuary; I could go on at tedious length, but will try not to.)

          Risk pooling can mean two different things, and confusion between them makes explaining things really hard.

          The first is risk pooling across roughly-similar risks: this is the problem that insurance solves. It’s a straightforward application of the law of large numbers in statistics–the larger the population, the easier it is to estimate the total cost of an infrequent event. Insure 10,000 reasonably health 40-year-olds against dying next year is a good example. Figure out what the average cost is, charge everyone 105% of that, pay the 99%-101% that actually happens, profit–everyone can win in that model.

          The second is risk pooling where the risk pool includes very different risks: this is a problem that insurance solves badly and fragilely without underwriting (figuring out how much each member of the risk pool contributes to the total risk, and charging proportionately). The problem to be solved is that if everyone pays the same, the low-risk members will be much better off if they can find a risk pool in which they are more typical (an company trying to capitalize on this dynamic is ‘cream-skimming’), and the high-risk members end up in a ‘death spiral’ – every time lower-risk members leave, the average cost to the remaining members is higher leading to more lower-risk members leaving, etc. (If you sold insurance against dying in the next year to people at the average cost, and included 90-year-olds in nursing homes, it would be far more expensive for the 40-year-olds from the example above.)

          The issue with medical insurance pools is that people do not contribute nearly equal amounts of risk – the 60-year-old diabetics, people with a child born with heart defects, and cancer survivors account for a wildly disproportionate share of the costs.

          Does that make sense?

          • scj1091 says:

            Thanks for the thoughtful response! Yes, makes total sense. (BTW I love that I can post a comment here on health insurance and get an answer from an actuary 20 minutes later. Sometimes the Internet isn’t awful)

            Any reason you can think of that it would be “better” to do such pooling on the employer level, as opposed to at the insurance company level? Or is it more the observation that “this is just one positive side effect of an otherwise negative system”? The observation that employers (assuming they have diverse demographics) *can* contribute to the diversifying of risk doesn’t necessarily entail that they *ought* to, or that it’s the most efficient way to do so.

          • SamChevre says:


            I don’t think employers are the optimal place to do the either sort of risk-pooling, but insurers can only do the first (charge everyone their expected cost + a margin)–we need some way to do the second.

            The question to answer with the second is “what do we do to make sure people with predictably high medical costs can get coverage at a price they can afford?” There are lots of value judgments built-in to any answer, but insurance companies aren’t able to solve the problem alone–if they charge the expected cost, it’s unaffordable, if they charge less then they have to charge someone else more than expected cost and you are back to worrying about cream-skimming.

            Obamacare tried to solve the problem by reducing the amount of variance in price due to age, forbidding underwriting except for age, and then requiring everyone to buy in–this made individual insurance far more expensive for anyone who was reasonably healthy and under 50, generating a source of cross-subsidies for the less healthy. My preferred approach would be a direct subsidy from taxes, rather than this weird mixture of cross-subsidies where it’s very unclear who’s subsidizing whom–but the employer pool system with typical insurance contributions can end up close to that.

          • zardoz says:

            If you think about it, insurance only works when people are ignorant of the future.

            If the insurance company knew for sure that lightning would strike your barn and burn it down in December 2021, the price of getting insurance on it would be the price of the barn… plus some administrative overhead, minus whatever interest the insurance company could earn on the money you paid them between then and now.

            We are dangerously close to piercing the veil of ignorance on medical conditions, and making insurance ineffective. DNA sequencing can already do it for most hereditary disorders.

            So we need hacks like “uh, pretend you don’t know that this guy will get a crippling degenerative condition in 5 years, even though we all know he will.” Aka the pre-existing conditions hack.

            And in the case of very old people, we all know they’re super expensive. Any reasonable actuarial model would make them almost uninsurable. So we have various hacks.

      • Edward Scizorhands says:

        With PPACA, insurers can no longer take people’s sucky health into account when pricing things. They can take age into account, but not as much as actuarially required.

  9. Garrett says:

    I’ve encountered this as a patient. I’m reasonably well-off. I work in tech so I have “good” insurance. I volunteer in EMS so I have good bit of experience with a lot of the local hospitals and I can easily get the inside scoop from folks that I know. And yet I still dread when I have to deal with insurance issues. Last year our insurance was provided by Blue Cross of another State. So when we went to their “member portal” they insisted that there was nobody in-network for something like 136 miles around me. One test I needed I was only able to get because I knew of a particular site and how to work cross-State Blue Cross reciprocity to ensure that it would be covered.

    It took me something like 4 months to get a maintenance medication that I’d been taking for years refilled because my insurance changed, they wanted a *different* type of pre-authorization, my doctor was waiting for the insurance company to send her the paperwork, the insurance company insisted that she need to reach out to them instead, and everything went round-and-round.

  10. Lancelot Gobbo says:

    Random thoughts:
    1. At a London (UK) medical school in the 1970’s, we were taught that the NHS was far more efficient at keeping administrative costs down compared to US insurance companies, since there was no actual accounting and bookkeeping to do. I doubt if this is still true.
    2. Moving to Canada ten years later, I discover a system of rather basic coverage (cf the NHS) but very well funded – in my province – by a specific 10% sales tax. Sadly, the province decided that pot of cash was too juicy for health care alone, and started to spend it on other things, thus causing a “crisis” in health care spending which was now deemed too lavish for the remaining smaller pot of cash.
    3. Their solution was to end local volunteer governance of hospitals and bring in a cadre of administrators and lawyers who would make everything more efficient and stop the waste. And, yes, you know what happened. The admins and lawyers started empire building and hiring assistants and , later, vice-presidents for goodness’ sake. We now spend more on admin than on direct patient care, which has shrunk to even more limited services. Examples: my little local hospital had 29 beds and one administrator, 24 hour lab, X-ray and ER. It now has 8 beds, 14 administrators, no ER, no lab – collection only for 1.5 hours a day, and X-ray 4 hours on weekdays only. Just before I retired after 35 years on the medical staff, one of these administrators stopped me in a corridor and asked who I was and what was I doing there? I’m afraid I was a bit rude to her. My closest regional hospital had 95 beds and four administrators. It now has 40 beds and 75 administrators. Every time there is a budget crunch, they hire a new VP to oversee the budget reduction, who needs an assistant, a secretary, an office, an empire. And thus they progress, ratcheting themselves into an ever-larger share of the costs, as once appointed, they never sack themselves.
    4. Yes, I became known for saying these things out loud. I got to recognise the quick glance that admins give each other when they hear the grumbling of a dinosaur.
    5. We had no concept of how lucky we were in the old system of the 1980’s. It was difficult at times when the Board of Governors was, say, chaired by the inept and dithering wife of the local minister, and she had to be gently guided into making some semblance of sense, but it was far preferable to a cadre of professional administrators all competing to adopt and use the latest fashionable business-speak words and phrases. It makes for a heavy heart when you finally understand that the point of their profuse communications is not to communicate anything at all, but to deliberately obfuscate so that everything that fails is deniable, and everything that works can be claimed as their own, even if they opposed it. We are at the bizarre crossroads of Voltaire’s Bastards and Yes Minister.

  11. disluckyperson says:

    Any other system would fix these problems.

    There are too many counterfactuals here. You can’t say “any other system”, but then assume that health care and the economy in any other system would work the same way it works now, but without the bad parts, and with only the good parts.

    1. Who says medical practices would be the same in any other system? Maybe recommended practices would change, and there would be less treatment or less prescribing in any other system? For example, it certainly seems the US is on the high side of antidepressant prescriptions compared to other countries.
    2. Who says all the medications that are prescribed now would be approved in “any other system”. I doubt any other systems pay as much for medication as American insurance does. It would seem that would have an influence on which medications are available at any given time.
    3. American doctors are the best payed in the world, and yet they still are pretty low on doctors per-capita. If any other system relies on paying doctors less (as it almost certainly would), who says that wouldn’t result in a massive shortage of doctors?
    4. Along the same lines, who says in any other system “the good anorexia therapist” or the “good sex therapist” would exist in that town?
    5. Along the same lines, it’s possible that any other system, to be successful in the US, would require massive economic reforms that go far beyond health care. Who says that particular “would be entrepreneur” would even exist in such a system?

    All of this is not to say the counterfactual system would be worse. It’s very possible the trade-offs would be well worth it.

    • Dack says:

      3. American doctors are the best payed in the world, and yet they still are pretty low on doctors per-capita. If any other system relies on paying doctors less (as it almost certainly would), who says that wouldn’t result in a massive shortage of doctors?

      Isn’t the supply of doctors in the US artificially capped by some organization or another?

      • disluckyperson says:

        Yes, but I’m not sure if that isn’t the case in many countries. I don’t think there’s anywhere with an unlimited amount of medical school slots.

      • Garrett says:

        Technically, it’s the number of residency spots funded by the government. And for some reason self-pay residency spots are generally taboo (though some countries will pay for US residency spots for their medical students to train and then return home. There are more medical school spots than residency spots. You can technically practice medicine without a residency, but you’ll have a very hard time finding a job anywhere other than hanging up a shingle as a private practice in extremely under-served areas.

    • Garrett says:

      > yet they still are pretty low on doctors per-capita

      I’m not certain this matters quite as much as you might suspect. The US has moved to a model where a lot of what physicians end up doing is supervising the work of lower-trained providers. A lot of the people seen in a ER are actually seen by mid-level providers (physician assistants and nurse practitioners). Additionally, a lot of the overall patient assessment work is done by nurses with treatments administered by patient care technicians and respiratory therapists, frequently based on standing orders. Even for moderate cases the doctor involved might only show up after the initial labs/scans/tests have been performed to provide a diagnosis and determine a course of treatment, which will then be performed by the other healthcare providers without returning through discharge. This is one way you end up with complaints of “I got a huge bill and only saw the doctor for 5 minutes” despite being cared for by multiple trained individuals for several hours.

  12. The Nybbler says:

    I’m not so sure all the alternative systems would solve these problems. The Amish system would, but we’d all have to be Amish for it to work so that can’t happen. The Oklahoma/California thing isn’t really about employer-paid health insurance; any system administered by the states rather than nationally could run into it. Same for the well-off guy and doctor co-operatives; if he gets sick or injured in an area where his co-operative isn’t, he’s going to be on the hook. “Medicare for all who want it” would still have employer health care for most, most likely, so would have all the same problems.

    Our system now may be among the worst. Probably is. But so are all the reachable alternatives (which don’t include a free market or the Amish system). A fully public system in the US would be absolutely awful — it might solve the listed problems, but brings many of its own. Health care rationed by waiting time, capped provider compensation driving the better providers out of the field. Worse, a particularly American thing, rationing by sympathy: all the poor alcoholic mothers of 4 get liver transplants before anyone else can get a knee replacement. The end of pharmaceutical research, as no one is left to pay for it. And it’ll cost as much or more than before, with at least as many forms to fill out, with criminal prosecution if you get them wrong.

    • Matt M says:

      Yeah. I actually think this is largely missing the point of people who defend the current system. Scott says “Any other system would fix these problems.” I think the average defender of the system as it is doesn’t really dispute that other systems might fix these problems.

      They just point out (accurately, IMO) that other systems would introduce different problems of their own – mainly associated around rationing, wait times, procedures being approved or not based on political calculus, etc.

      • Simon_Jester says:

        Perhaps so, but given that most of the other systems seem to manage to have fewer problems on net

        This isn’t a case where the entire world uses one system and all attempts to implement anything like the new system have been disastrous.

        You can argue with a straight face “Every government that purported to be communist has made its people miserable. So even if your form of communism doesn’t resemble any form that has been tried, a priori we should expect a high risk of things going wrong. And that risk will only go up if you DO plan to do things that resemble previous purportedly communist governments.”

        You can’t argue with a straight face “Every health care system that has purported to be an alternative to the American system of employee-provided insurance has produced worse outcomes, so…”

        Now granted, the converse of the statement (“Every system is better than the American system”) may not be literally true, because the word ‘every’ is being expected to do a lot of heavy lifting there.

        But we live in a world where people from the US who move to developed foreign countries overwhelmingly say “wow, health care is so much better over here!” This despite the fact that developed foreign countries use a wide variety of different systems that evolved in different ways over the 20th and early 21st centuries.

        So the argument that we’re talking about unknown mystery systems that might lead to unforeseeable problems even worse than the ones we have now… kind of falls flat, in my opinion.

        • Matt M says:

          I don’t necessarily disagree with any of that. I’m not a big fan of the current system and I fully concede that many alternatives would likely be superior on net.

          I’m just here to point out that I think Scott is getting the basic terms of the argument wrong. Nobody is saying that the problems of the current system couldn’t be solved by changing the system. Only that changing the system would likely produce new problems. Which is true.

          I don’t really know which systems are better on net. I don’t really trust most of the data we see, or the anecdotal claims of immigrants/emigrants. But so long as most American voters see medical care as very important and are generally satisfied with what they are getting, they aren’t likely to approve any drastic or dramatic changes to it. Note that to get Obamacare passed, Obama had to rely on the “lie of the year” of “If you like your health care plan, you can keep it.” He knew from the start that he had to promise the majority of the population (who were satisfied with what they were getting) that they would be unaffected by any changes. And given that people were burned on that one, they probably aren’t going to believe any similar such promises coming from politicians any time soon…

        • disluckyperson says:

          So the argument that we’re talking about unknown mystery systems that might lead to unforeseeable problems even worse than the ones we have now… kind of falls flat, in my opinion.

          I don’t think that we are talking about unknown systems and unforeseeable problems. To the contrary, at this point, the advantages of different systems are well known. Their foreseeable problems are also well known, as Matt mentioned “rationing, wait times, procedures being approved or not based on political calculus, etc.” Now throw into that inherent American distrust of the government, and it’s understandable that voters prefer the American system, even with its problems, to a system that would have different problems exacerbated by uniquely American government dysfunction (whether that dysfunction is real or imagined).

        • Garrett says:

          > But we live in a world where people from the US who move to developed foreign countries overwhelmingly say “wow, health care is so much better over here!”

          As someone who grew up in Canada and now lives in the US, healthcare in the US is so much better. Except for the wait times involving yelling at insurance companies to get my medications shipped to me through the insurance-affiliated mail-order pharmacies and their affiliated specialty pharmacies, because one mail-order pharmacy can’t handle all mail order medications.

    • AlphaGamma says:

      The Oklahoma/California thing isn’t really about employer-paid health insurance; any system administered by the states rather than nationally could run into it.

      A sensible system would have something like the European Health Insurance Card, where any healthcare that you need while travelling and that can’t wait until you get home is covered by the local insurance system under the same terms as if you were a resident.

      • The Nybbler says:

        The bar wasn’t that “a sensible system” would cover it; it’s that “any other system” would cover it.

      • Simon_Jester says:

        To get EHIC as a system in Europe, it was first necessary to have coordinated decision-makers put the system into action via the European Union.

        To do the same thing in the US would, de facto, require the federal government to get involved in exactly the sort of way that provokes political battles between ideological supporters and opponents of government subsidized/funded health care.

        • Lambert says:

          It might be possible to put together a bunch of bilateral and smaller multilateral agreements.
          Like the reciprocal healthcare agreement the UK has with a bunch of countries (mostly commonwealth but also places like Serbia).

      • thisheavenlyconjugation says:

        Or even just whatever systems most European countries have for non-EU immigrants, which appear to be reasonably functional.

  13. rahien.din says:

    Adding :

    My patient’s small insurer served them well for a number of years, providing her exotic and expensive epilepsy drugs without a hitch. Then they got bought by a [deifentified giant successful insurer]. Their new insurer immediately denied their exotic and expensive epilepsy drugs. I had to reinitiate the entire approval process, which took an inordinate number of phone calls.

    Finally, I had to excuse myself from a face-to-face discussion with a hospitalized patient to take a call from the peer physician, an ED doc with no expertise in intractable epilepsy. He and I argued for half an hour until I said, “Look, imagine if you had a patient who was taking an antibiotic, and it was working, and then the insurance company told them they had to stop taking it.”

    “Wait!” he said. “She’s already taking it?!“

    Needless to say, the medication was approved within minutes on the strength of “LMAO we didn’t know she was already taking it.” This is not an isolated case, but it’s my personal worst.

    Anytime someone tries to tell me that unpunishable incompetency and disregulated bureaucracy are a problem of government and are solvable by private enterprise, I remind myself how [deidentified giant successful insurer] could have easily killed my patient and others.

    • JRG says:

      I worked as a resident with an attending who was a well-published expert in [relatively uncommon disorder with specialized treatments] who told me about a peer-to-peer he had to do once. This came after multiple appeals and waiting weeks to get [somewhat expensive medication usually used for a radically different indication] approved for a patient of his. The other doc, who as at least a psychiatrist, gets on the phone and says “I googled you right before this call. You have way too many papers on this for me to be able to argue on this one, I’m gonna just go ahead and say yes.”

      Totally rigorous process definitely worth a month of delay and frustration for everyone involved.

    • Matthias says:

      Oh, it’s not government that makes bureaucracy bad.

      Bureaucracy has a natural tendency to go bad all by itself.

      Strong competition can serve as a force to keep bureaucracy competent and effective. Competition is easiest to create in a lightly regulated private market. But that’s not the only way. (And private doesn’t mean you get good bureaucracy. As you described. Especially in a bad regulatory framework.)

      • eric23 says:

        In a government system you don’t need bureaucracy. Just make a list of treatments which are covered and ones that aren’t. If the requested treatment is on the “covered” list, it is covered.

        At any private insurance company, there will be an employee thoroughly examining the request and looking for excuses to not cover it if they can potentially get away with not covering, because that saves the company lots of money. There are no such pressures in a government system.

        The free market does not correct for this behavior, because nobody has any real statistics about the behavior of the various insurance companies, only vague anecdotes, so it is impossible to compare them and choose accordingly. (The fact that choosing a job generally forces you to choose a particular insurer adds to this problem.)

        • Edward Scizorhands says:

          Just make a list of treatments which are covered and ones that aren’t.

          Oh Good Lord.

          I mean, that’s nice-sounding and all. But what happens when “lung transplant” is on the approved list and a doctor wants to do it on a 95-year-old man with stomach cancer?

          If you think this is so easy, why hasn’t some do-gooder with a bunch of money just started their own insurance company?

          • eric23 says:

            I mean, that’s nice-sounding and all. But what happens when “lung transplant” is on the approved list and a doctor wants to do it on a 95-year-old man with stomach cancer?

            Nothing as simplistic as “lung transplant” would be on the approved list. It would be something like “lung transplant for patient under 80” or “lung transplant if projected to give at least 1 year of additional life”. A few doctors might be able to slip in a few unnecessary procedures around the boundaries, but that does not seem to be a major issue in the many countries which use this system.

            If you think this is so easy, why hasn’t some do-gooder with a bunch of money just started their own insurance company?

            Because do-gooders can have a much higher impact *per dollar* with other initiatives, for example Bill Gates’ vaccine research?

          • Edward Scizorhands says:

            Seriously, go get a bunch of like-minded people to pass the hat and raise $50 million and set up an insurance company in a few of the smaller states. Ask all the Hollywood celebrities at the DNC this year and they could fund it easily.

            “We cover thing X and not thing Y! So easy!” It would take a while but they would eventually capture the entire market in those states. And then move on to another state, and another, until they capture everything and we all have this simple technocratic insurance plan.

            And you don’t need to convince the electorate for this! YOU CAN DO IT RIGHT NOW!

            Of course, if you actually get Hollywood actors, they might remember the 1990s, and how insurance companies that don’t cover things made for reliable villains.

            Oh, and we’ve already been through this dance, with autologous bone marrow transplantation. If you don’t cover something that someone “needs” to save their life you are literally evil and will be forced to cover it.

          • The Nybbler says:

            Obamacare and other laws make such limited-service health insurance illegal.

          • eric23 says:

            Every company claims to cover X and not Y. A company that holds up its promise to cover X will have to charge more for insurance than one that cheats on covering X, so it won’t be competitive.

          • Edward Scizorhands says:

            If a company actually covers X, yes, they would need to wait for their reputation to shine through to capture the market. They could presumably find friendly media to point out the fact that other companies are just lying about covering X.

            Also, those same Hollywood actors could throw their own reputations behind the project. Bernie Sanders has a net worth of $2 million and could throw some money into the pot, and be on the board to guarantee that no one gets screwed over. Sanders got 13 million votes in the 2016 primary. Surely he could get manage to convince some of them to sign up. How about Elizabeth Warren? She’s got 14 million dollars.

            It takes more money than I have in my pocket to start an insurance company. But it doesn’t take that much money. Pass the hat, get it going in one state, and then expand as success allows.

            Hey, Tom Steyer wants a public option: well, he has a net worth of 1.6 billion-with-a-b dollars. He can just make the Tom Steyer option. Right now. He doesn’t have to win a single vote. He could afford to run it at a slight loss, too. Tom Steyer can run it, which is even better than being run by a government that 50% of the time will be controlled by Republicans.

        • Mark V Anderson says:

          At any private insurance company, there will be an employee thoroughly examining the request and looking for excuses to not cover it if they can potentially get away with not covering, because that saves the company lots of money. There are no such pressures in a government system.

          There sure as heck better be such pressure in a government system. The government bureaucrat pushing back on treatments is a feature, not a bug. If the government doesn’t push back, no one will. Maybe in the US there would be more pressure to accept everything, and that is why the system would go bankrupt.

          And your further explanation in a lower comment that it won’t be lung transplant that is acceptable, but lung transplant in certain cases, which is where it isn’t so simple. And you better have a government bureaucrat with a backbone denying edge cases, or the system will collapse.

    • DinoNerd says:

      I don’t have anything remotely as exotic. But the new insurer who refused payment for my daily medication is now paying more for a different medication, and I’m paying less than I would have been on the old meds. I bought the prior medication entirely out of pocket for a year, which rather sucked, and then the doctor came up with this more expensive alternative the insurance company would actually cover.

      That same job change resulted in the refusal of some preventative dental care, which had worked too well at preventing me from having a major problems with gum disease every 3 years or so. No major problem -> I don’t need the extra periodontal cleanings – until things get so bad that I need another deep cleaning, or worse. I’m paying for that mostly out of pocket, with the provider colluding by miscoding the periodontal cleanings as regular cleanings, so the insurer pays part of the bill.

      And of course if I’d been living hand-to-mouth I wouldn’t have been able to pay for things the new insurer arbitrarily refused.

      None of these are impossible with a single provider and/or government run system, with cost-cutting bureaucrats running the show, but at least there wouldn’t be the phenomenon of “new insurer; new rules + reauthorize everything”, whenever either you change jobs, or your employer changes insurance providers.

      And my schaden freude really loves both of these, because both have the effect of raising the insurance company’s payments, or at least payments from one of my employer’s insurance companies. If I hadn’t decided I’d rather pay out of pocket than get sick, and hadn’t been able to find a substitute, the first refusal would probably have resulted in me ending up on disability, for which I’m insured via my employer. And if I hadn’t paid for periodontal cleanings for the past 3 years, I’d have an urgent case of gum disease by now, with lots of expensive treatment – on the insurance company’s dime.

    • Garrett says:

      Are you able to bill the insurance company for the time spent on these calls? It’s one thing if it’s a straight forward form with a few fill-in-the-blank answers. “Have you tried obvious default therapy? If not, why?” which should filter out the obvious wastes where a PCP decides to prescribe whatever medication they saw on television last night. In that case a good provider should be able to check a few boxes, sign and be done in a a minute or so for most cases. Having to spend a huge amount of time (unless you’re trying to do something really, really, really weird *and* expensive) should be reimbursed by the insurance company.

  14. DiracsPsi says:

    Can someone explain how/why the in-network, out-of-network system developed? As someone who has only ever been a student of various kinds at large universities with student health plans and hospitals, I’ve never had to think about it.

    • rahien.din says:

      What does the insurer get from designating certain providers as “in-network”? A closer working relationship, which means more efficient financial machinery, and some influence on care decisions. It’s sort of like the network creates a space where the insurer and the provider can negotiate more efficiently.

      Presumably this works out to the insurer’s benefit financially, because there seems to be an extra cost associated with out-of-network providers, because the insurer passes on some extra costs to the patient.

      Or think of it this way : imagine if insurers really wanted to be Hanson LMO’s, but people refused to follow medical advice, so the insurers paid the people to do as instructed.

    • North49 says:

      The “network” just means providers who have a price agreement with your insurance company. If you see a provider that your insurance company doesn’t have a deal with, the price for care is probably several times higher.

      • Buttle says:

        In other words, the primary service provided by health “insurers” is price fixing. A service that would be illegal in the US in almost any other market, but is allowed for medical care. I am not competent to describe how this happened, I think it was mostly an unfortunate accident, which happened to benefit some inflluential people at one time and is now almost impossible to reverse, because it is now the livelihood of many.

        • Garrett says:

          This is also true for other types of insurance. If you have a covered car collision, your insurance will try to steer you to a facility that they have pre-negotiated rates with. This may be through terms which do the “usual and customary” reimbursement rate bullshit. Or they may provide additional perks. When I had my car hit, the insurance company mentioned that if I went with one of their preferred vendors the insurance company would be providing a lifetime warranty on the work performed. This worked for me because I’d normally prefer the work to be done by the dealership (on someone else’s dime), but a mega-corporation guaranteeing the work for life was actually a better deal.

    • BBA says:

      I believe it dates back to the ’70s movement towards HMOs, which were supposed to be integrated systems of coverage with exclusive provider contracts like Kaiser. Out-of-network coverage was meant for the rare cases where the patient needed a particular kind of specialist that the system didn’t have. What happened was that customers didn’t like the inflexibility of HMOs with their exclusive networks, but also didn’t like the high cost of traditional insurance that covered everything, so the models merged into this incoherent mess. Kaiser is still doing their integrated thing but the promise of HMOs being cheaper and more efficient has gone unfulfilled. (Though I think the Israeli system is something like how HMOs were meant to be?)

      Going back further, “accident & health” insurance contracts for unexpected catastrophic costs were a distinct product from the “prepaid health care” plans offered by nonprofit Blue Cross and Blue Shield affiliates. By the ’80s these had expanded into each other’s bailiwicks and become indistinguishable, and the commercial insurers successfully lobbied Congress to revoke the nonprofit status of the Blue plans in the 1986 tax reform. So today, practically speaking, there’s no difference between what Cigna and Anthem and UHC do even though they were all founded with different models.

  15. JRG says:

    In practice the solution to the problem of the young man diagnosed with schizophrenia is to have some idea of who the local CMHC or academic psychosis docs are and then start googling their names to find out if they have a private practice on the side. Many of them do and will probably be happy to take on a case better fitting their true interests and also get reimbursed the way tony private insurances reimburse.

    The potential complication is that if this young man would benefit from case management/service coordination, supported employment etc. the private practice on the side is not going to be able to help much.

  16. GearRatio says:

    Is it fair to say that most of these problems are either particular to or significantly more severe in psychiatry/psychology as opposed to medicine? In a non-rural area, I wouldn’t expect:

    – Only one good endo, as opposed to only one good anorexia guy (see also schizophrenia guy)
    – A doctor who could only adequately treat his patient after several years

    There’s also a cute dodge here where Scott describes problems that would only be solved by “free” medicine as being solvable by every other system, and so dodges the part where free medicine probably wouldn’t do a very good job with some of them or even offer meaningful treatments for them in the long-term:

    – The entrepreneur wouldn’t be helped by anything but medicare-for-all unless removing insurance lowered absolute costs a ton as opposed to just helping flexibility
    – The young gay man, whose problem isn’t insurance at all but that somebody else pays for his medical care in whatever form he receives it; his only solution is “free” care
    – The Oklahoman who isn’t in an “insurance” situation at all and shouldn’t have been used as an example at all; his failure state is already medicare failing him in a way it would probably still fail him if it applied for everybody (at best, Scott would be complaining about time-based care gaps still)
    – The young married woman who wants a divorce but would need to get her life paid for by somebody else before she can get it only improves if she gets free healthcare.

    Both of these categories (which apply to pretty much every example) are significant if you expect, as I do, that psych care would be the first category to suffer significant losses of quality and availability if medicare-for-all was in place. Does anybody expect the US would or could maintain a system that allows people to hop psych-to-psych until they find the right guy, allows counselling for non-obvious non-severe problems, allows sufficient amounts of visits for care, and is able to both maintain the current amount of psych doctors needed for current care on lower pay while adding more doctors to absorb the influx of new patients now able to access that care when they have free options?

    That’s my problem here – half these people are only helped if medicine is free or heavily subsidized; the other half are potentially hurt quite a bit if free-or-heavily subsidized medicine is worse quality, which seems likely to me. This doesn’t read as a “any other system is better” to me so much as “if we aggregate the good points of several systems and ignore their downsides, they solve every problem”.

    • The entrepreneur wouldn’t be helped by anything but medicare-for-all

      The entrepreneur would be helped by not having to pay taxes to subsidize everyone else’s employer-provided health insurance.

      The young gay man, whose problem isn’t insurance at all but that somebody else pays for his medical care in whatever form he receives it; his only solution is “free” care

      I’m not entirely sure how the system works, but when the government has to pass a law saying you can stay on your parents insurance plan until age 26, the incentive structure will be warped in some way that would not occur in a free-market system.

      • caryatis says:

        Staying on your parents’ insurance till 26 is an option, not the only option. The young man could get a job (or get student loans) and have his own insurance (as young people did before Obamacare). Well, except for the young people who didn’t have insurance.

        • The young man could get a job (or get student loans) and have his own insurance

          And pay an artificially high rate to subsidize the people the government forces insurance companies to sell to.

    • Matthias says:

      It’s not all or nothing. Cheaper healthcare would already help.

      As would decoupling healthcare from your employer.

      • GearRatio says:

        “Cheaper healthcare” doesn’t exist in a vacuum.

        Scott’s patients all have normal healthcare costs PLUS psych healthcare costs and are being subsidized by everyone else on their insurance who doesn’t see Scott. If this is because psych care is bundled with health care by law you give them free market, how does their care get cheaper while still including normal health stuff once all the non-psych-care-users exit their pool? If it’s not included because of legal mandate but is a voluntary upgrade driven by market forces, how is free market different?

        I definitely might be missing something on reasons employer health care is cheaper, but it seems to be because they have greater negotiating power and offer subsidies as part of pay. Assuming that those subsidies convert at a 1/1 rate to take-home pay, an employee still loses the negotiating power. This seems like a net loss for that guy, but I feel like I might be missing a big part of this. In the current system, the employee can already de-couple his insurance from the employer but doesn’t do this because it would be a much worse situation for him – besides losing the subsidy, why is this?

        In the case of Scott’s would-be divorcee and gay man, health care being cheaper somehow would definitely help them buy health care as an abstract, but I’m concerned with what kind of health care they’d get; why did it get cheaper? Is there a magic wand solution where they are paying much, much less for medical care but still get the exact same gold-star psych care with medical bundled they are used to, or are they giving something up?

  17. North49 says:

    I’m confused why so much of the healthcare discussion is tied up in different insurance schemes, and almost no one is discussing the underlying cost of care. When seeing a doctor people basically treat the copay as a the entire cost of care, and when discussing policy people basically treat premiums as the entire cost of care, and no one anywhere in either discussion knows or cares what is actually being charged by providers for care.

    We shouldn’t need insurance to afford a decades old drug that costs 4c to produce. And not because it should be free instead (or pretend it’s free), but because it should cost something in the ballpark of 4c to purchase outright once the R&D costs are recouped.

    • Edward Scizorhands says:

      My wife works in medical billing and will see a half-hour of a doctor’s time being charged at $1000 and she wants to burn the whole thing down and replace it with anything.

    • GearRatio says:

      I would caution that a “You can file papers showing your actual R&D costs, recoup those, and then make only minimal money on your investment after that for a few years before it becomes a generic” model would, while being more affordable sooner, probably have some effects on the future amounts of money dedicated to R&D.

      • North49 says:

        Almost every other class of consumer product and technology gets cheaper over time, and usually dramatically so. It isn’t necessary to eschew the entire patent system to want to bring the drug (and healthcare more generally) market back in line with other consumer goods we enjoy an abundance of at (near) commodity prices. I’m not sure exactly what policy would solve the problem (although I sometimes think I do) but the broader point is that insurance is not healthcare, insurance buys healthcare. So any discussion of insurance costs that doesn’t also address underlying cost of care seems unproductive to me, and I don’t understand why so many people seem to think it is productive to discuss insurance costs alone.

        • GearRatio says:

          Whether or not it destroys the patent system to strip the vast majority of the profit out of a market isn’t necessarily important here – what is important is that it represents a massive change in the financial incentives presented to the pharmaceutical companies.

          What this means is you aren’t making the medical system cheaper – you are exchanging the current medical system for a cheaper medical system that comes with other differences besides price.

          In this case, it means that you’d see less new drugs. If you change the financial incentives slightly, you’d see slightly less. If you change them drastically – and you propose a drastic change where a company invests hundreds of millions in R&D to then perhaps recoup it and afterwards make only the money a generic producer makes – then you would see a drastic reduction.

          It isn’t that this isn’t something you could argue as a net good, but to be a credible argument it has to acknowledge what it is – an offer to trade current rates of progress and higher prices for a reduction in prices and lower progress.

          • Thomas Jorgensen says:

            … The thing is, one of the few things the US government is, in fact, pretty good at is.. research. And pharma is not. No. really. So much spending on “Me too!” drug research and other pathologies. Its not an exemplar of private sector research.

            If the US, as a nation, is willing to spend 2 percent of gdp indefinitely on medical research, then you would nigh-certainly get one heck of a lot more actual research done by just scrapping medical patents in toto and setting the budget of the NIH to 400 billion/annum.

          • John Schilling says:

            … The thing is, one of the few things the US government is, in fact, pretty good at is.. research. And pharma is not. No. really.

            Is there a reason I should take your word for that over, say, Derek Lowe? Because he seems qualified to have an expert opinion on the subject, and argues convincingly and at length that the government is only good at the smallest, easiest part of pharmaceutical research and development.

          • GearRatio says:

            @Thomas Jorgensen

            If what you are saying, which seems to be something like “US Pharma has nothing much to do with drugs, actually, it’s not a big deal if they can’t make money” then foreign companies would piggyback off our government research in a big way just as US based pharma companies do. The market would be flooded with new entrants into this highly lucrative field, since all one would have to do is scoop up all the twenties on the US government’s ground.

            But instead we find that pretty much every period ever looked at the US makes somewhat more drugs than the rest of the world combined leads at the top or near the top in priority review proportion and that significant new entrants into the market are few.

            This leads me to believe that you are wrong – that barriers besides those broken down by NIH research exist and are pretty much only surmounted in big numbers in the US, which with 50% of the world’s new drugs.

            If it isn’t money that allows an motivates US pharma and biotech companies to outperform the world 2-to-1 and the US government infinity-to-0 on new drug approvals, what is it? Because without some compelling other-factor making US pharma so much better than everyone else, it still seems to me that cutting their money motivation will cut =(all worldwide medical progress proportional to that loss)/2, at least.

          • Thomas Jorgensen says:

            You both took my argument waay further than I intended. Yes, US pharma currently does actually useful research. Because an enormous hose of money incentives this.
            I am simply estimating that dollar for dollar, you would get more knowledge added to the world by pointing that hose at the NIH or equivalents. Because “NIH, only with a budget that makes the manhattan project look like pikers” would not be spending half its budget on marketing, and would not waste time duplicating drugs that already exist, except if said drugs have major drawbacks.

            Yes, currently, the state pharma research does not follow its discoveries all the way to a marketable pillform, that is not because that would be inherently beyond them.

          • John Schilling says:

            I am simply estimating that dollar for dollar, you would get more knowledge added to the world by pointing that hose at the NIH or equivalents.

            More knowledge, yes, up to a point. But treating diseases by injecting patients with knowledge, works about as well as injecting them with bleach. It’s drugs we need for that, and those you generally don’t get from government researchers.

    • TheFlyingFish says:

      Scott has talked a number of times about this, e.g. Considerations on Cost Disease, Book Review: Why Are The Prices So D*mn High?, and some passing comments in his previous post on Amish healthcare.

      He’s also complained in some detail about the towering edifice of conflicting motivations and general stupidity that is the pharmaceutical industry and regulation thereof.

    • disluckyperson says:

      it should cost something in the ballpark of 4c to purchase outright once the R&D costs are recouped.

      Once R&D costs for that drug are recouped, and all the drugs that the company spent millions of dollars on but failed somewhere in the pipeline.

      • Edward Scizorhands says:

        He was talking about “decades old.”

        Last I remember, America had the cheapest generic drug prices. That was before Marin Shkreli, though.

        • fibio says:

          It may even still be doing fairly good on average, but Valiant and Shkreli proved that if you can secure a monopoly on niche generics you can raise the price catastrophically with very little push-back. While this probably doesn’t matter much to the average cost of generic drugs it is a major failure mode of the US system. Healthcare consumers really shouldn’t be offered the choice between ‘financial ruin’ and ‘death’ just because an investment bank wanted to increase their profit margin by a hundredth of a percentage point.

    • Garrett says:

      > We shouldn’t need insurance to afford a decades old drug that costs 4c to produce.

      As a general rule, we don’t. Major retailers with pharmacies have huge lists of drugs which can be purchased for trivial amounts. Ex., Walmart has a $4 prescription drug list. $4 isn’t quite free, but I think it’s reasonable reimbursement for the ~10 minutes of skilled time to verify the prescription, count pills, and for assuming the liability for screwing up, plus the medication.

      The cases where such drugs aren’t so cheap usually falls into medications which cost a lot more to produce, or are used by so few people that the regulatory overhead is high. I think it’s something like $1 million/year to maintain an FDA authorization to manufacture each drug (unable to find a source currently). So we aren’t exactly talking about a free market which rewards flexibility and dynamism.

  18. TJ2001 says:

    While I agree with 100% of everything Scott says is broken – and far more….

    I am *Extremely* suspicious of ANY proposal that starts off with “Scrap the entire existing system and start over.” I am this way because they *ALWAYS* fail in beautiful, spectacular, and extremely predictable ways…

    Notice how every single one of the “problems” Falls under these two general categories:
    1. 100% of doctors are immediately and perfectly interchangeable.
    2. 100% of medical conditions do not catastrophically escalate if treatment stops.

    AND… The Solution is “Blocked” because of “The Golden Rule.”

    Now… Let’s refresh ourselves of “The Golden Rule”….
    “He who has The Gold makes the Rules!”

    AKA the “Issue” occurs because The Insurance Company/Government “Has the Gold” – thus they set all the rules….

    Unfortunately in this system – The Captain never goes down with The Ship – so he has no reason to fix anything… And thus we can shift around the injustice somewhat – but it can’t be eliminated…

    • Edward Scizorhands says:

      I would prefer many other systems, but switching to them is likely to follow this pattern:

      1. In the new system, we have a big trade-off. Pretend it’s “you can’t pick your doctor.” [1] People have figured out that if you can’t pick your own doctor [1] and get one assigned to you, that leads to better results overall, and being able to pick your own doctor is something that people wouldn’t care about if they could get the benefits of the new system. If you can choose your own doctor [1], we lose all the benefits and it’s even worse than we started with, but that’s okay, because we will accept this trade-off.

      2. So we go about designing and implementing the new system.

      3. Near completion, someone in the public discovers that “OMG YOU CAN’T PICK YOUR OWN DOCTOR” [1].

      4. A massive cry goes up from the public. Loss aversion kicks in.

      5. Faced with the massive cry, the government implementers decide we are going to do the new system but you can choose your own doctor anyway. Hey, we put a man on the moon, surely we can figure out a way to choose your own doctor [1] and still get all the benefits!

      6. No. No! The entire point from step 1 was that choosing your own doctor [1] is the necessary trade-off! We knew that being able to choose your own doctor [1] was necessary for the new system to work and without it things would be even worse than we started with.

      7. Doesn’t matter. Too many people have dedicated themselves to making the new system happen, and so it’s going to happen, without the required trade-off. And so the whole system becomes worse.

      [1] This is not the actual trade-off. I picked it as something that is vaguely similar to the kinds of minor loss-of-choice people might face.

    • The Nybbler says:

      Unfortunately, incremental change ALSO falls in entirely predictable ways, which is that it doesn’t solve most of the problems of the current system, adds new problems of its own, and adds a new layer of cost and bureaucracy on top of the old ones.

    • North49 says:

      You’ve made 2 compelling points, but they seem contradictory. If the current rules are so awful for reasons you elucidate in the second place, why overly concern ourselves with Cesterton’s fence about them?

      • TJ2001 says:

        I am saying we leave The Fence and we solve the problems the way they are solved in THIS system…

        We make it MORE expensive for the people paying to clog up the works and ruin people’s lives and then dump the problems THEY cause into our laps and run…

        • Garrett says:

          How do you separate out people who have medical conditions with non-obvious signs from malingerers, people who want to abuse the system for fun, all in the context of medical errors?

          * There are lots of reports of people who won’t get critical medical treatments/evaluations for fear of cost. (This leads to people dying)
          * There are lots of people who will show up at the ER on a regular basis in an attempt to score drugs/turkey sandwiches/a healthcare provider fondling their genitals. (This is a huge, rarely-compensated category of abuse in the ER).
          * There are some people who either think they have a medical problem, hope the have a medical problem, or just want someone who’s trapped in a room with them to talk to. (This is a waste of resources but at least currently gets paid for out of some pool, driving up costs but at least covering provider time).
          * There are people who won’t comply with treatment prescribed. Non-compliant diabetics are well-known. This drives up costs *and* doesn’t improve objective healthcare outcomes.
          * There are people who suffer from medical conditions which are rarely known and which have few/no outward signs. My discovery this weekend was the existence of vulvodynia. Chronic fatigue syndrome might fit here. These are people who are legitimately suffering, but whose medical providers are either unable to find something wrong or who dismiss the patients out of hand. This might not lead to high costs, but it does result in untreated suffering.
          * There are people who just get shitty first-time care where a doctor misses something critical like appendicitis, internal bleeding, or whatnot, where getting a second/third opinion may be life-altering.

    • TJ2001 says:

      There are solutions *within* the system… And it’s a mistake to assume that everything entrenched won’t stay just as entrenched in the new system as well….

      So for example – an interesting “Solution” to a problem similar to this was dealing with hospital infections….

      Lots of people were contracting infections and sickness *WHILE* hospitalized… The medical companies were making a *ton* of money off this… And so everybody knew it was “a problem” – but it was a problem that was making them money.. And so there was no solution to this problem.. .

      Until The Government changed the rules around and said “No – if they get sick on YOUR watch – you pay for it yourself”. Then all of a sudden hospitals got *really* concerned about infectious disease transmission..

      What’s to say we come up with something along these lines… It “Costs society” a tremendous amount of money when somebody who is otherwise “well” stops some treatment and their condition changes to “catastrophic” and their life blows up into a giant dumpster fire which results in them losing their job, their family, kids, in jail, and spending massive amounts of time in hospitals..

      OK Mr. Insurance Company – that’s fine if you want to deny him the care for some miscellaneous administrative reason… But YOU have to pay for fixing ALL the problems you caused by dumping Mr. Jones into Society’s lap…

      So ok sure Mr. Insurance – you revoke Mr. Jones’ anti-psychotic treatment and he ends up in jail… So now you have to PAY for the jail time AND all his lost wages, divorce, child support, and alimony..

      Or Mr. Doctor – you had a patient who came to you “Well” and then you changed around all his medications and poured him into a giant dumpster fire… Fine – YOU own him and all his problems now until you get him back to “Well” again…

      • albatross11 says:

        I suspect that the healthcare system would not in practice get better by adding these rules. Instead, I’d expect everything to get twice as bureaucratic.

    • Clutzy says:

      I am *Extremely* suspicious of ANY proposal that starts off with “Scrap the entire existing system and start over.” I am this way because they *ALWAYS* fail in beautiful, spectacular, and extremely predictable ways…

      Only when the new system is ambitious. If you scrap a huge system and replace it with a simple, unambitious system that is relatively unregulated it works. See, e.g. deregulation of the US railroads.

      One of the major problems with the political proposals of Democratic politicians in the US is that they are incredibly ambitious about scrapping parts of the system, but they don’t scrap nearly enough. I have no doubt that Medicare for All plans would end up combining high US costs with long wait times, and weird, seemingly arbitrary decisions like the NHS has.

    • eric23 says:

      I don’t think it’s necessary to “scrap” the existing system in any way. Just let people of any age join Medicare if they desire. That one simple step will bring the US up to the level of all other Western countries.

  19. pjiq says:

    interesting post, thanks

  20. HeelBearCub says:


    I basically agree with the thrust of this post. The insurance system in the US is huge, gigantic, organic kludge that needs massive reform. I think “destroying” it isn’t possible, for precisely all the continuity of care issues you are outlining here, but I assume that is hyperbole.

    That said, I’m really struggling to understand this assertion.

    A communal system like the Amish have would fix them.

    It may seem like it’s throw-way, but given the fact that you just had a whole long post on how great the Amish system is, and you have a history of deifying the concept of “The Archipelago”, I’m not sure it actually is throw-away.

    A system composed of many Amish-like communities seems to suffer from many of the same problems you identify in this post. You can’t exit the community and not lose health care. If you need to exit the community due to your sexual orientation, the status of your marital bliss, a job change, a needed geographical change, etc., you lose your healthcare. If the religious community objects to “insert medical service here”, you don’t have access. If their particular network of private providers, the ones they have negotiated with, doesn’t treat schizophrenia, or some other form of illness, you don’t have access.

    Just not sure what point you are going for on this.

    • SamChevre says:

      The Amish system would also be terrible at funding innovation.

      • Gnecht says:

        Exhibit A to the contrary is the Clinic For Special Children.

        Exhibit B might be B & W Ointment, although it’s not what the medical world expects “innovation” to look like.

        • SamChevre says:

          B&W ointment is awesome, but it seems to me to be in a different category from the quinolones.

    • Oldio says:

      On the contrary, if we lived in the archipelago system there would be a built in solution to the Amish healthcare system’s issues- you could just change your community to one that accepts whatever it is yours is opposed to.
      The young gay man is stated to have found one already and the only reason he hasn’t switched is because of the healthcare issue.

      • Matt M says:

        “Changing your community” doesn’t really sound any easier or lower cost than changing your job…

      • HeelBearCub says:

        And what makes you think that community healthcare will be available to someone who changes communities? There is a moral hazard problem here.

        And, regardless, each community won’t necessarily have equivalent healthcare, one of the problems Scott is inveighing against.

        • Gnecht says:

          I understand the USA already has parents that move just to get their children into preferred school districts. Compare & contrast with doing the same for healthcare?

          • HeelBearCub says:

            You don’t seem to have grasped the issue.

            Schooling, by and large, costs roughly the same for every student. Healthcare doesn’t work that way.

            You can’t change fire insurance policies AFTER your house burns down. There is a strong disincentive to allowing people to transfer in to your “island” and then just get whatever healthcare because of moral hazard. That’s precisely why changing insurance companies right now results in nightmares for various people, even though you were already insured and covered under your old policy, and could be covered on the new one.

            “Islands” don’t magically solve this issue.

          • zardoz says:

            We already do have this problem in the US, though. Homeless people can stagger into any emergency room and get free treatment. It’s illegal (as well as inhumane) to let them die. Their credit ratings will get dinged, but they don’t have any money anyway. Someone (I think the hospital?) eats the financial damage, and passes it on to the paying customers.

    • Sniffnoy says:

      Yes, agreed.

    • eric23 says:

      No, massive reform is not needed. Only the simple step of letting people of any age join Medicare if they desire.

      This will have the immediate effect of giving everyone “pretty good” medical care at an affordable price. Private insurance will still exist, but few people will pay to duplicate free Medicare services, so private insurance will shift to a “Medigap” (supplement to the basic Medicare coverage) model at a much reduced price. Thus the system in the US will match that prevailing in all other Western countries.

      • Mark V Anderson says:

        Only the simple step of letting people of any age join Medicare if they desire.

        I don’t get this solution. Where does the money come from for this? How about those medical providers that can’t survive on Medicare payments, such as with Garret’s examle above. “Simply Medicare” is not a solution.

  21. eqdw says:

    While I agree that most other systems would solve most of these problems, I disagree that these problems are _necessarily_ caused by the US system. For many of the things you list above, the problems are caused by more fundamental things than a private insurance model. Those problems _could_ be solved in the private model. They are _not necessarily_ solved in other models. The fact that they could be solved in our model but aren’t should be a hint that it is not the model that is the problem (and, consequently, that switching models wouldn’t solve anything)

    > The elderly man who had a great relationship with his last psychiatrist

    The problem here is not “private” insurance. It’s “he switched doctors and that caused him to have to start over his treatment from scratch”. Two more fundamental problems there: 1) he switched doctors; 2) switching doctors was disruptive. (1) is sure caused by the insurance model, but we can imagine insurance models that don’t have this problem. Further, this is sort of the mirror-image tradeoff of a Canadian style system. In a Canadian-style system you are not likely to be compelled to change a doctor like this, short of that doctor retiring. But, in a Canadian-style system, the flip-side tradeoff is that you do not have your choice of psych in the first place. You get the one who you were lucky enough to get (because they all don’t have openings for the next few months and you’re desperate), and then you stay with that one. The US pathology is “switch doctors too much” but fixing that pathology causes the new one of “not enough choice in practitioner”.

    And with 2) there’s no reason in principle why your ramp-up time should take too long. Patients could take more ownership over their own treatment, coming to you and saying “this is what I need, do this”, so you don’t have to figure it out. More effective records systems and protocols for shifting patients between doctors would address this. And, of course, this exact same problem is going to exist in any other system when you switch doctors, so it’s not really the system that is causing this problem in the first place

    > The businesswoman who was seeing me and doing well until the HR person at her job told her that she didn’t need to submit any forms to renew her insurance that year.

    This is 100% a “dumbass HR drone can’t understand paperwork” problem. The only reason it’s a “US system” problem is if the US system requires more paperwork than other systems (I would find this plausible but do not consider this to be _obviously_ true). I can also think of analogous situations in other systems. Eg. the surprise $900 ambulance ride my brother got in Canada, because he forgot to file the form to update his address with the government and they were mad about sending an ambulance to somewhere “other than his neighbourhood of residence”.

    > — The bipolar man on a very important daily medication. He changed insurance plans.

    This is also a paperwork fuckup and is only a trait of the US system insofar as the US system creates more paperwork burden than other systems

    > The would-be entrepreneur who wanted to save up enough money to live on for a year or two, quit her dead-end job, and start a startup – but who wouldn’t be able to afford health insurance outside of her dead-end job’s plan. She is still at her dead-end job.

    This one could legitimately be credited as caused by the US system. However, any system is necessarily going to have this problem. As an analogy: the would-be US immigrant who wanted to save up enough money to move from Canada to the US in order to double or triple their salary (this is what I did), but who is too nervous about health coverage outside of Canada. This dependency problem is going to exist, _somewhere_, as long as someone other than the patient is covering healthcare, and this is less a problem with the US system and more an argument over where the correct place to put that boundary is.

    > — The young gay man with conservative religious parents.

    This is an instance of “the person who is paying for care gets disproportionate control over what care is provided”. In the US this happens at the individual level, with the gay man with religious parents having to avoid care that does not comply with their wishes. With a universal, government-provided care, we move that gatekeeping to the government level. Imagine if the US had a public universal system 20 years ago. Instead of _some_ trans people (who are on their religious parents plans) not being able to get care, it’s _all_ trans people not being able to get care (because 20 years ago, society was nearly universally anti-trans, and spending on trans stuff would not have been tolerated). It is not obvious to me that centralizing that gatekeeping is socially optimal. It is also not obvious to me that this gatekeeping is obviously bad. I mean, the way you put this scenario, it sure seems bad: gay person needs care, can’t get it because gatekeepers. But also the gatekeepers are the one paying for it. In just about every other scenario in life we accept that the people who pay for something get to exercise influence over it, because we accept that nobody has an _obligation_ to pay for a bunch of shit for someone else, and that such payments are in some sense a gift. From the conservative parent point of view, hey we’re spending thousands of dollars to give you health care, and all we ask in return is that you respect our beliefs. In this situation we’re all primed to think those parents are bad, because of the political affect of the LGBT issue, but in a thousand other situations we would accept this as reasonable

    > The young woman in a not-quite-abusive but far-from-acceptable marriage,

    This is another instance of ‘dependence on who’s paying’. Changing who is paying doesn’t remove the dependence, it just shifts it. In this case maybe shifting it is the right idea, but this isn’t a fundamental _and unique_ pathology of the US system. Analogous dependence pathologies will exist in other systems. The only way you remove this dependency is via a magical infinite money system that every person has inseparable access to

    > — The depressed guy who was doing well on a complicated antidepressant regimen for a while, changed insurances, and was too depressed to do the work of finding a new psychiatrist.

    This is another instance of “problems when changing providers” and is only a trait of the US system insofar as the US system has more provider-change events which, as I have laid out above, is the tradeoff that opposes the Canadian system’s tradeoff of “you don’t get as much choice and flexibility in your providers”. Further, I personally know (and have at one point been!) people who have fallen into this failure mode in Canada. Universal systems don’t solve it

    > The endless train of patients I saw when I worked in a hospital emergency room

    Can’t speak for other systems but in Canada prescriptions are not generally covered by the health system. When I was on SSRIs in Canada I paid out of pocket $90 a month for them. People have supplemental drug insurance through employers, which has the exact same dynamic as this dynamic in the US.

    This is an instance of “you can’t have stuff that costs money when you don’t have money”. We accept that that is reasonable in just about every other scenario. We could say that healthcare is a special scenario, maybe it is, but that invites politicizing every argument of the form “well was that really _necessary_ care?”. Which is maybe a valid use of our social and political resources but I highlight it to point out that switching to a different system does not solve this problem.

    > The other endless train of patients I saw when I worked in a hospital emergency room, whose stories started with


    > The other endless train of patients I saw when I worked in a hospital emergency room,


    > — The Oklahoman who wants to move to California where he has more friends and better job prospects, but he’s on Oklahoma state insurance for the needy.

    This is fundamentally a failure of California’s state bureaucracy to be competent. While it would certainly be solved by centralizing healthcare under the (federal) government, I don’t really find “a problem caused by the government being incompetent is solved by giving that government’s bosses more power” to be a compelling argument.

    Further you all might be interested to hear that, because healthcare in Canada is administered on a provincial basis, scenarios like this happen there as well

    > The well-off Oklahoman with good private insurance who visits California on a business trip, gets sick, and finds that surprise

    Yeah this is pretty much just a direct failure of the US system. However, it could seemingly be solved if it was easy/clear which providers were in-network while he was travelling. The fact that that information was not easily available to him, when it could-have-been in principle, implies that there’s a deeper failure

    > — The depressed guy who was in remission for years and had a great job with great insurance. Then he had a relapse, became too depressed to go to work, got fired, and lost his insurance right at the moment when it finally could have been useful for him.

    This is 100% a failure of employer-linked healthcare and I see no defense for it whatsoever. Although, arguably, COBRA solves this

    > The woman who had a minor breakdown and was brought to the hospital by police.

    This will be true of any care that isn’t covered under any system, and the more fundamental failure is that police can impose the cost of responding to your emergency onto you. I’m not sure that this is true of any other element of policing (if a cop gets shot responding to a B&E at your house, are you on the hook for the cop’s medical care?). Seems like this is better solved by requiring that involuntary hospitalization be paid for by the people who compel the hospitalization (which also has the convenient side effect of disincentivizing involuntary hospitalizations for minor cases)

    > — Anything involving Kaiser.

    Which is pretty ironic because, as I understand it, HMOs were specifically created to solve most of the problems with the US employer-linked PPO insurance system.

    > The trauma victim who needs trauma therapy

    On the one hand, there’s no reason in principle why someone should have to restart from zero when they switch providers. On the other hand, if reliving the traumas actually helped, why should having to do it a second time be such a big imposition. The second time, they won’t be traumas.

    > The young schizophrenic man who is on his parents’ insurance.

    Under the Canadian system, you will have no access to that expertise unless you happen to get in with the doctors who happen to have that expertise. For that matter, I would hazard a guess that under the Canadian system, no such cluster will exist

    > The anorexic woman who has Blue Cross, and the only good anorexia therapist in town only takes Aetna.

    All “choice of provider” related problems are way, way worse under centralized universal systems. At least in the US you have the ability-in-princple to say ‘fuck it’ and spend out of pocket to go to the good therapist. Under the centralized system you get the person you get and if you want to switch to someone else you’re looking at waiting months just to
    get an intake visit, if they’re taking new patients at all


    > Any other system would fix these problems.

    They would fix some of these problems, replace some of these problems with different problems which may or may not be improvements, and probably-not fix some of these problems

    > . A public system like Medicare For All would fix them.

    If medicare-for-all looks anything like Canada’s system, all the above concerns apply

    > A communal system like the Amish have would fix them.

    I don’t think you can make this claim, and as evidence present your post from the other day. If we had a US-wide communal system like the amish, that would not magically remove the problems of “low trust”, “excessive spending on a small subset of patients with expensive chronic problems”, and “not being sufficiently frugal spending other peoples’ money”

    > A free market system like our grandparents had would fix them

    Most of the problems listed above caused by bureaucratic failures while switching providers would not be solved by a free market system

    > The prepaid doctor cooperatives Reason talks about would fix them.

    When you industrialize and scale up prepaid doctor collectives, you get HMOs. “Anything involving Kaiser” is HMO. It is unlikely that collectives would solve the issues we currently have with HMOs

    > A half-assed compromise like Joe Biden’s Medicare For All Who Want It would fix them.

    Insofar as this would allow people to pick medicare in the limited situations where it would fix things, and then not pick it in the situations where it wouldn’t and/or the tradeoffs cause other problems, this one might actually solve things at the margin

    • Sniffnoy says:

      I think you’ve missed the point of the post; Scott isn’t against private insurance, see the bottom where he talks about free-market solutions. He’s against employer-provided insurance and the expectation of, special treatment of, reliance on, and legal mandate of such.

    • cuke says:

      Just on the choice issue: Americans continue to have the idea that in exchange for more cost we have more choice and availability in our healthcare system than other people have. This seems by no means self-evident to me.

      I’m a healthcare provider and hear lots of stories from people about their healthcare experiences and my sense is that people in the U.S. routinely have to wait several months to get in to see a specialist. I wonder if there is solid data about wait times across health insurance systems.

      People’s choice of provider is constrained by need to find an “in-network” provider for their insurance plan and every time their employer changes plans or the person changes employer, they need to go through that process all over again. This is apart from the situation where people go into a hospital and later learn that while the surgeon or hospital was “in-network” that the anesthesiologist wasn’t. Deductibles also re-set for people every time they have to switch insurance resulting in more out-of-pocket costs.

      People’s choice of provider is determined by what health plan they have and what health plan they have is largely not up to them. In addition to who their employer is, their choice is constrained by who they’re married to, how old they are, what state they live in, whether they need medical care in a state other than where they reside, whether they are students, as well as things like what time of year it is (because deductibles re-set every January 1). If a patient has specific needs for a specific drug or treatment protocol, coverage of that thing will vary from one plan to another, and so every time a plan change is forced on a person, they either have to change their treatment, fork over more money, or hunt down a different insurance plan if they have that option (most people don’t). None of this is on the side of enhancing choice.

      The system is an insane, dysfunctional, cobbled-together mess, held together by scotch tape. To the extent consumers experience this, imagine an equal degree of insanity on the provider side that is invisible to the consumer. That provider-side insanity takes resources away from patient care and leads providers to remove themselves from insurance networks, further limiting consumers’ choices.

      If you are a relatively healthy person without children and have had minimal need of healthcare, you will have had very little experience with the system’s dysfunctionality (I’m not speaking of you personally, just generally). It’s hard to convey how broken our system is if you haven’t spent much time interacting with it. For better or worse, eventually all of us are likely to have significant interactions with it and at that point our perspective on it is likely to change.

      • Garrett says:

        > This is apart from the situation where people go into a hospital and later learn that while the surgeon or hospital was “in-network” that the anesthesiologist wasn’t.

        Why don’t insurance companies compel hospitals to guarantee that other providers such as anesthesiologists/radiologists/etc. will accept in-network rates as a condition of themselves being in-network?

        • The Nybbler says:

          Why don’t insurance companies compel hospitals to guarantee that other providers such as anesthesiologists/radiologists/etc. will accept in-network rates as a condition of themselves being in-network?

          Sometimes they do, and then you get billed as if they were out-of-network anyway. Sometimes because screwups, possibly sometimes malice. On the screwup side, I had one operation at an in-network hospital for my Blue Cross plan, and every ancillary provider tried to bill the wrong Blue Cross plan (because hey, I was in Philadelphia, it must have been Keystone, right? No need to read what’s actually on all those forms), got denied, and then billed me directly.

  22. stucchio says:

    Just like when he posted about why he hates Basic Jobs because it wouldn’t allow people to be paid caregivers for relatives (which most states currently allow), Scott is ignoring the existing solution to many of his people’s problem. It’s called COBRA.

    (At least, it’s the solution if the problem is what he says it is. But see more on that below.)

    How it works: your employer pays you $X in wages and pays your health insurance $Y which means your total comp is $X+$Y. For most circumstances of job termination (read: company continues to exist, >20 employees) you can continue health insurance for 101% x $Y.

    Conversely, this means that if you want to save money to go without salary for a while, your target is $X+1.01 x $Y.

    The would-be entrepreneur who wanted to save up enough money to live on for a year or two, quit her dead-end job, and start a startup – but who wouldn’t be able to afford health insurance outside of her dead-end job’s plan. She is still at her dead-end job.

    She gets 18 months of COBRA if she quits.

    He had a supportive friend group and should have been able to come out to his parents without caring what they thought – except that he’s on his parents’ insurance and has no good alternative.

    If a person loses their dependent status, they can use COBRA for 36 months. (This point is the one I’m haziest on, so I would double check this one.)

    The young woman in a not-quite-abusive but far-from-acceptable marriage, who stays in it because she’s on her husband’s insurance and has no good alternative.

    A divorced person gets COBRA for 36 months.

    got fired, and lost his insurance right at the moment when it finally could have been useful for him.

    A fired person gets COBRA for 18 months.

    If COBRA doesn’t work in any of these cases, the reason is simply that these people don’t have enough money to support themselves and perhaps have done bad budgeting. The employer (or husband) was paying a salary of $X plus $Y in non-wage benefits (like employer side of health insurance premiums), and they do not have adequate savings to cover $X + $Y.

    So the would-be entrepreneur probably can save up for 2 years of $X, but her employer pays her $X+$Y, and she’s bad at budgeting. Perhaps she should remain employed until she improves her financial planning – it would be pretty bad for her if she miscalculated her startup’s runway in the same manner.

    Similarly for the the young woman who’s staying with her husband for his money and the young gay man who’s also dependent on his parents for their money. I agree that it’s sad when people become (or are born) financially dependent on people who are unkind to them.

    But this isn’t really caused by employer sponsored health insurance. The only role it plays is people who are bad at financial planning say “well I saved up $X but actually my employer was secretly more generous to me than I thought, and was giving me $X+$Y”.

    (This convenient forgetting about $Y also comes up a lot when people talk about income inequality.)

    • DinoNerd says:

      COBRA has a time limit. In most cases, it’s a lot shorter than the person’s life expectancy. So all it does is delay the problem 18 months, or perhaps 36 for the dependent (I’m hazy on the rules for dependents losing coverage).

      They are still forced to change treatment because of changing insurance companies or insurance plans. And pricing/subsidies are such that employer-provided coverage is much more affordable (before Obamacare I’d have had to add “and might well be the only coverage available”).

      • stucchio says:

        COBRA solves the problem of “how do I get health insurance until I raise my Series A”. It solves the problem of “how do I get health insurance while I’m temporarily disabled and suddenly really need my health insurance.”

        It doesn’t solve the problem of “I would like to keep a specific doctor forever” or “I do not want to provide value to others ever but I want them to provide value to me forever”.

        As noted by others, quite a few of the systems Scott mentioned also don’t solve these. E.g. if you’re on American universal health care (Medicaid or Medicare), you lose your doctor and need to go through bureaucracy if you cross imaginary boundaries. In Canada you get whatever doctor they assign, and you also might change doctors if you change address.

        In any case, look up COBRA because it might help you if you find yourself in some of these situations. It will also help you engage in better financial planning today so that you’re enabled to handle such a situation later.

        • Simulated Knave says:

          Everywhere I’ve lived in Canada you had a choice of physicians in terms of family doctor. Can’t speak entirely for being hospitalized, but I know there is at least some degree of choice there as well (I think you’re limited to the doctors at the hospital you’re at and who are working at the time, but my understanding is that that’s effectively true in the US too for obvious reasons).

          Finding someone who is taking patients is the tricky bit. There’s been a family doctor shortage most places I’ve lived. Of course, that’s oddly not the provinces refusing to pay for them – my home town was offering $400K and doctors were preferring to go live in bigger centres for less than that. Canada’s constant doctor shortage is a problem the government really ought to look into.

    • Scott Alexander says:

      I’m aware of COBRA. It works less well than I would expect from the fact that it’s designed to solve this problem, in the sense that all the examples I gave were real examples and COBRA did not solve them. I can only speculate about why that is, but some possibilities:

      – most people are operating very close to their budget limit and can’t afford the extra cost.

      – some people don’t know about it. I’ve tried to make sure my patients know about it, but sometimes I see them after the fact (eg after they’ve already quit their last provider).

      – some people don’t do the paperwork right. I’ve never been through this process myself, so I don’t know how hard it is or isn’t, but I’ve definitely had several patients who missed a step and ended up past the deadline.

      – most of these problems aren’t solved by an extra 18 months. Like if the entrepreneur starts her startup, or the gay guy gets disinherited, they have 18 months of health insurance. Great. What happens after that?

      – I may be wrong about this, but I think COBRA takes some time to apply for. The person I’m thinking about who got fired and so couldn’t get treatment needed treatment *now*, and we tried to get him into a PHP, and they said he had no insurance, and even if he could have gotten insurance in a month or two after going through the COBRA process, that wouldn’t have helped. It’s possible I’m missing something here, but I did miss it, and the person didn’t get care.

      • BBA says:

        Roughly a decade ago, I had the unfortunate luck of falling ill and needing surgery during the gap between me leaving my job and getting signed up for COBRA. The resulting mess took months to sort out. Luckily I had deep-pocketed relatives willing to foot the bill.

        As I recall, it took a couple of weeks to get the COBRA paperwork mailed to me, which I then had to mail back with payment to get my insurance reactivated. So roughly a month going without coverage, which I could file claims for after the fact, but in the meantime I had no idea how much I was on the hook for. Maybe the process is faster now, but I doubt it.

      • Sniffnoy says:

        One thing worth noting about COBRA, going by my two experiences with it, is that they don’t send you bills after the initial notice (which isn’t really a bill either, it’s just, y’know, a long letter explaining how COBRA works and where to send your payment to); instead you simply have to remember to pay each month. Miss once and it’s dropped entirely. (I have to assume this is because companies don’t really want people using their COBRA.) I didn’t have a big problem with it but I imagine for anyone with low executive function it would be a disaster.

        • ana53294 says:

          Set up a standing order?

          Unless it requires to log in and make a payment with a debit card or something, in which case it is stupid.

          • Sniffnoy says:

            Huh, I didn’t know one could do that. What it did require was mailing a check to a specific address — you couldn’t do it via bank transfer — but it looks like banks in the US offer a similar sort of thing where they mail checks. So, that’s neat. Will come in handy should this come up again!

      • stucchio says:

        The last time I used COBRA, it was continuous – I had a month to make the next payment. This was NY, your state may vary. Paperwork was also not difficult, from the perspective of a skilled professional.

        – most of these problems aren’t solved by an extra 18 months. Like if the entrepreneur starts her startup, or the gay guy gets disinherited, they have 18 months of health insurance. Great. What happens after that?

        Hopefully they become productive members of society capable of supporting themselves. That’s the whole goal of doing a startup, I thought – building a business that you own which pays you a salary and dividends and such.

        COBRA doesn’t solve the problem of becoming a ward of the state – that’s what Medicaid, welfare and disability fraud are for.

        COBRA also doesn’t solve the problem of Americans being vastly richer than Indians, but still saving a dramatically lower fraction of their income. (What you call “operating very close to their budget limit”.) Or, like, saving as much as what Mormons just give away.

        None of these are really problems of the health insurance system though.

      • zardoz says:

        The weird thing about COBRA (at least in California?) is you can delay signing up for COBRA until you actually get ill. Then if you do get sick, as long as you’re within the several-month grace period, you can sign up and get treatment. But you have to make the back payments for your retroactive coverage. So you’re actually incentivized not to sign up until you’re in a desperate condition. Which might explain why so many people who use COBRA arrive at the doctor’s office having just signed up for it?

  23. caryatis says:

    — The would-be entrepreneur who wanted to save up enough money to live on for a year or two, quit her dead-end job, and start a startup – but who wouldn’t be able to afford health insurance outside of her dead-end job’s plan. She is still at her dead-end job.

    Couldn’t this be solved by saving a bit more money?

    — The young gay man with conservative religious parents. He had a supportive friend group and should have been able to come out to his parents without caring what they thought – except that he’s on his parents’ insurance and has no good alternative. He remains in the closet.

    — The young woman in a not-quite-abusive but far-from-acceptable marriage, who stays in it because she’s on her husband’s insurance and has no good alternative.

    Couldn’t these be solved by the people in question getting jobs and their own insurance? Yeah yeah I know, leaving a bad relationship is hard. But still, people do it every day.

    Edit: I agree with stucchio that these are merely specific illustrations of the undesirability of being financially dependent on others. The young man would have the identical problem if he had free insurance but relied on parents to pay tuition, and the woman would have the same problem if she had free insurance but didn’t think she could support her kids without her husband.

    • albatross11 says:

      Depending on when it happened, this may have been about preexisting conditions.

      In general, health insurance tied to a job or a parent makes it hard to change jobs or move away from home. The whole health insurance system in the US, IMO, makes it much harder for people to do stuff like change jobs, start their own business, move across state lines, etc. Suppose you have some chronic but well-controlled health problem. Changing insurance companies normally means changing all your doctors, and potentially also changing medicines (because the new insurance company doesn’t cover that drug without some special hoop-jumping). If you have a family, you have to deal with this for everyone in your family.

      • Edward Scizorhands says:

        Wasn’t “let the entrepreneurs be free” one of the justifications for PPACA? Googling, I see entrepreneurs wanting very much to keep Obamacare when put under threat by Trump, and I don’t think that went away.

        There are lots of excuses not to start your own business. I know them, boy do I. If someone post-PPACA says that’s the reason they can’t form a business, they haven’t tried to fix it.

        • stucchio says:

          It was one of the talking points, but in fact there was no significant increase in business formation after PPACA.


          I can’t find it now, but Romneycare similarly failed to have any effect.

          In aggregate, people come up with all sorts of reasons why they can’t do that cool (but risky and hard!) thing they like to entertain as a fantasy.

          If something is a legitimate reason, you’d expect changing the underlying facts to change the behavior. Whereas if it’s just a rationalization people often just ignore the fact that facts changed.

    • benf says:

      “Silly poor people, just get more money. Problem solved!”

  24. pacificverse says:

    I tend to prefer mixed public-private.

    Public healthcare with lots of ICER studies, a waitlist, and a relatively limited set of free meds (no brand new biologics or targeted therapies except gleevec and I think rituximab) for anyone who wants to save on cash (or lacks cash), and private (insurance or out-of-pocket) healthcare for anyone who’s rich enough to splurge on “nothing but the best”.

    You get a nice healthy private sector to give frivolous care, draw people into medicine (they’re gonna have to spend some time in the public sector because that’s where most of the jobs are), and funnel money to pharma research, and a public sector to do most of the heavy lifting.

  25. Epistemic_Ian says:

    — Anything involving Kaiser.

    I’ve had Kaiser my whole life, and plenty of stories to tell about it. Sometimes it works as well as you’d hope it would, and sometimes it fails pretty badly. Here’s my best/worst story.

    A few years ago, I had a bad bout of depression and decided to actually see a doctor about it (I had depression for several years before this and never before had the motivation to see a doctor at all). So, I call Kaiser to get an appointment with their psych department, and I’m able to get one about a month out. A month later, I go there, and I find out that I’m not seeing a psychiatrist, and this is just an intake appointment. By this point, I’m no longer very depressed, but I figure it will be good to get therapy for next time. The marriage and family therapist (?) who’s doing this intake appointment asks me some questions and agrees that yes, I do have depression. She says I have a few options: wait two weeks (allegedly) to see a non-Kaiser therapist (which Kaiser will pay for), wait four weeks to see a psychiatrist, who I can talk to about medication, or wait eight weeks (!) to see a Kaiser therapist. (Pay attention to all of the times in this story, these are really really bad delays to be dealing with if you’re struggling with depression.) I decide to go with the first option, and she says that the outside therapist group will notify me about how to schedule an appointment. About four weeks after the intake appointment, I get a letter from Kaiser saying, “we will pay for this therapy for you from this outside therapist group, they will contact you to schedule an appointment”. Well, they never did contact me. I believe that I emailed the original Kaiser therapist who handled my intake appointment, never received a reply, and then gave up, because this entire process was such a tremendous pain in the ass, and I had nothing to show for all of the time I had spent trying to deal with the system.

    Since then, I’ve developed some techniques to reduce depression on my own (mainly by figuring out how to consistently get good sleep, big thanks to Scott for introducing me to melatonin and how to use it properly), and I have not attempted to get therapy or anything else from Kaiser since.

  26. n-alexander says:

    from personal experience with government run system, each and every one of these problems could be mirrored in the state run situation.

    For example, you may be required to go to the clinics you’re assign to, based on where you live. Change your address – just to next street – and you’ve lost your doctor. And have to start all over again, and all the good things.

    Going to study and leaving your parent’s home? Same thing.

    Is it easier to navigate a business interface or a bureaucratic one? Where are the people on the other end paid better?

    Does government bureaucracy inherently have more compassion than an insurance company? You can – with caveats – choose insurance, but you cannot choose bureaucracy.

    • benf says:

      A government bureaucracy does not have a baked in incentive to soak you for as much money as possible.

      • gbdub says:

        And yet costs are rising everywhere.

        As others have noted, any position other than “give the NHS more money!” is a political third rail in the UK. They may not have an incentive to soak you personally, but they have a big incentive to soak “us” because crying sick children and grannies needing cancer treatment are always going to be more politically compelling than “man our debt held by China is getting awfully high”.

        Bureaucrats have different incentives than corporate employees, but there is no particular guarantee those incentives are better aligned to the public. Broadly, “happy customers” are good for both, but it’s a couple steps removed from what is good for the employee / bureaucrat.

      • Clutzy says:

        What government are you interacting with? Not the US or a US state government surely.

      • AlexOfUrals says:

        It will have some built in incentives, and those are quite likely to be even worse aligned with your interest as a patient – i.e. a doctor being paid for a number of patients seen, or a hospital being punished for exceeding its monthly death quota (true stories both, although not from the US). There’s of course the alternative where there’s no incentives at all, everyone’s just paid a flat rate per time based on their position, but that’s obviously even worse.

  27. ConnGator says:

    No matter how bad US insurance is it is possible to get worse.

    The “devil you know” is part of the reason the country was so divided over the Affordable Care Act, and why roughly 50% of the people loathe any change to the system.

    I can’t argue with any of the complaints in this article, but my major fear is that massive changes to the system would severely reduce pharma profits (good) resulting in many fewer drugs being developed (deathly horrible). But maybe I am wrong and they will let economists help design the new system.

  28. Erl137 says:

    Here’s my story:

    Shortly after college, I was still on my parent’s insurance. My job offered insurance as well, with a $0 premium. So I signed up. What’s the worst that could happen?

    Parent’s insurance was Cigna. Work insurance was something else, I forget. Let’s say Blue Cross. I went to the doctor. They took Cigna, I had a Cigna card, all seems well in the village. I had a visit and a minor surgical procedure. (Skin tag snips.)

    Turns out that work insurance takes precedence over parent insurance. And the doctor wasn’t in network for Blue Cross.

    So: Cigna wouldn’t cover the visit without a letter from Blue Cross denying it. Blue Cross wouldn’t deny the visit without the doctor’s office billing them. And the doctor wouldn’t bill Blue Cross, since they had none of the procedures in place to do so. So the doctors billed me, at the uninsured fuck-you rates.

    This turned into a 16-month headache of endless calls and arguments. At one point the bill went into collections, resulting in all of that mess. Not that I wasn’t good for the money—but nobody could agree about who had to pay it!

    At the end, the doctor’s office ended up eating most of the cost and simply waiving the vast majority of the bill. Nobody got anything, nobody made anything, and the hours spent on this bullshit rapidly outstripped the costs saved by any party.

    I know this is the world’s most laughable, least problematic health insurance story ever. But it was a freaking nightmare, and an endless pain in the ass. This is what has always confused me about people who want to keep their insurance—even from a position of great good fortune, with no serious health issues, no unaffordable expenses, and TWO SEPARATE POLICIES FOR FREE, it’s clear that the system sucks.

    • cuke says:

      This is a great story because it’s incredibly common and totally emblematic of how our cobbled-together system is broken. It does greater harm than this, but this is the pedestrian kind of regular evil it produces.

      • Garrett says:

        Once upon a time, one of the insurance companies my ambulance service billed would reject any electronically-submitted claim which was not properly-malformed XML. That is, they required a submission in an XML format, but actually submitting a properly-formatted XML submission wouldn’t be parsed. The XML had to be malformed in a particular way for the insurance system to accept it. It was at that point I decided that I never wanted to be involved with IT in healthcare.

  29. Ttar says:

    End all subsidies, regulations, medicare, and medicaid, and then cover everyone with a free catastrophic coverage plan.

    • eric23 says:

      And then masses of working-class people die at age 50 from preventable chronic diseases that they couldn’t afford to have treated until catastrophic insurance applied, and by then it was too late.

    • cuke says:

      The free catastrophic plan is great if you are someone with disposable income to spend on regular healthcare costs. But if you are a food service worker, a contract custodian, a part-time worker of any kind, a teacher at a private school or daycare, or any kind of worker who doesn’t make enough money to have plenty left over at the end of the month, you are going to deny yourself necessary healthcare while also showing up sick to provide services for the rich people who find a catastrophic plan all they need.

      Needless to say, ending Medicare and Medicaid would have disastrous effects on poor, elderly, and disabled people who are less able to pay for routine medical expenses than pretty much everyone else. Medicare and Medicaid cover about 35% of Americans while just about half are covered under employer plans. Medicaid covers about 40% of all American children.

      • Ghillie Dhu says:

        “Catastrophic” need not be a constant number of dollars across all patients.

        • cuke says:

          What used to be catastrophic plans before ACA are now high-deductible plans. Because ACA required certain things to be covered by insurance, plans solved the cost problem by just raising deductibles rather than eliminating types of procedures from being covered. So a person with a $6,000 deductible essentially has a catastrophic plan. A person has to pay out-of-pocket for most of their healthcare expenses, but if they wind up really sick or in hospital, they will get help from insurance. The difference is that the people who have high deductible plans now are generally people who have jobs that don’t pay as well and so they are less able to afford the out-of-pocket costs.

          In mental health, for instance, this generally means that very poor people don’t have to pay for sessions, very rich people either don’t have to pay for sessions because they have great insurance or they don’t care if they have to pay because it’s no big deal to them. And the whole swath of people in-between have to pay $100-150 out of pocket per session because they have high deductibles because they can’t afford to pay higher premiums or because their employer doesn’t have great benefits at their income level.

  30. Erusian says:

    — The would-be entrepreneur who wanted to save up enough money to live on for a year or two, quit her dead-end job, and start a startup – but who wouldn’t be able to afford health insurance outside of her dead-end job’s plan. She is still at her dead-end job.

    On a specific note, I’ve managed this and find this explanation a little off. Let’s say she was making $100,000 a year, leaving her about $70k to live off of post-California taxes. So she’d need to save up $70-$140k. Basic insurance runs maybe $5-$10k a year. This represents a 7-14% increase in the amount she needs to save.

    All that said, I agree the system is complicated. Getting insurance set up for employees or a self-employed individual is a nightmare. I’m very sure it slows down new business creation. I know it’s sort of my soapbox but I really do think the slowing down of new business creation is a huge source of societal ills, from decreasing income mobility to regional differences to lack of innovation. (Add in the fact healthcare networks are geographic and I could rant for days…)

    Personally, if I were redesigning the thing, I’d riff off of the Singaporean system. Basically subsidized and mandatory HSAs with employers kicking in some funds, no networks, and some severe cases covered. Perhaps with some regulations around price transparency. This means people have incentives to shop around and keep their costs down but also that even the poor have the purchasing power to get care (albeit, not as good care as the wealthy, but when is that ever the case?) It also means the whole insurance reimbursement in-network out-network goes away. (And I’d probably add in some subsidies so that very small businesses get their contribution covered at a sliding scale by the government.)

    But I’m very skeptical of plans that boil down to “dump more money into the existing system with even more anti-market regulations but not enough that we’ll actually reform big planks like price transparency or interstate issues”. Tulip subsidies par excellance.

    • Desrbwb says:

      ‘Let’s say’ is doing a lot of work here.

      Why assume this anonymous woman is on $100,000 a year? That’s well over both median middle income ($77,000) and overall median ($88,000) for an entire household.

      • Erusian says:

        Scott specified his clients are wealthier than average and he lives in San Francisco, where the median household income is $97,000. This is the city where $200k a year is still middle class. (And if half that is from her spouse, then the family doesn’t lose that income from her quitting so it’s a more favorable scenario.)

        But let’s say her income is $31,000, the national average individual income. First off, she’s desperately poor by San Francisco standards and needs to move regardless of her income. (Seriously, $31k will get you miles farther in Boise than in SF and $30k a year jobs are not hard to come by.) But secondly, that only about doubles the percentage she still needs to save up.

        • Desrbwb says:

          That’s the thing though, in your example she’s still earning more than the median household income by herself. Now, this might be a definitional thing, but I wouldn’t consider a 100,000 dollar job as ‘dead-end’ in the first place.

          As for the poorer end, that reads to me like a version of the classic poverty trap. She needs to save proportionally more than a well off person, but also find it a lot harder to save, because they need to spend what income they have on present expenses. If we assume 5% of income saved (I know this is lower than a lot of ‘recommended’ savings percentages, but some struggle to save seems implicit in this scenario). At the ‘rich’ end (using your 70k take home figure) that’s $3500 a year. For the poor end (don’t know what the take home would be for 31k, so lets be generous and ignore tax) that’s only $1550 a year (and even that may be a struggle if cost of living is that high). In both cases, having to bolt on another 5-10k a year in costs to make up for the loss of employer health care requires years of additional saving. So ultimately, I don’t find this explanation/anecdote implausible at all.

          • Erusian says:

            Well paying dead end jobs are so common there’s a slang term for them: golden handcuffs.

            As for it being a poverty trap, the math you posit is really quite bad. This woman was going to save up a year or two of income at a 5% savings rate? So she was going to wait twenty to forty years? It will tack on one to two years at best, though that is still non-trivial. But it is trivial, or at least low, in the sense of her saying that’s the reason she’s not doing it. Imagine if it was a purchase instead and someone swore to you up and down they absolutely had to have something. But when the price rises 10% they’re suddenly completely disinterested.

            Of course, the solution could either be to have the state provide it free of charge… or to remove the state firstly forcing a minimum plan (so eliminating lower cost options) and then putting the additional requirement of health insurance on her (instead of letting her choose whether a year or two without insurance is worth it).

  31. vmsmith says:

    I am a retired military guy. When I was on active duty (23 years) I had what I considered really good medical care. And among other things: I had so many kidney stones at one point I was practically subletting a room in the urology clinic at Bethesda Naval Hospital…I was thought to have Hepatitis C at one point, and had a liver biopsy followed by every other test known to God and man to diagnose Hepatitis C (I don’t have it, I have a genetic disorder associated with hemochramotosis that results in too much iron in my blood, which leads to elevated ALT readings)…I was diagnosed and treated for reflux disease…I was diagnosed and treated for high cholesterol…and I had any number of dermatology procedures to mitigate the effects of years in the sun.

    When I retired in 2002 I entered the military retiree system, Tricare. I chose a primary physician, and continued on with occasional lithotripsies for the kidney stones…three colonoscopies…still more dermatology procedures…and so on. And my wife had some very serious care when she developed an auto-immune disorder. Very serious care.

    All those years of medical care could — in my mind — be considered care under a single payer system. All those years were definitely government-supplied medical care. And I am not in any way prevented from having and using private health care insurance if that’s what I want.

    There is not a single person I know outside of the military retiree community — NOT A SINGLE PERSON — who has not commented that they think we are extremely lucky, and that they wish they had what we have. And when I hear some of their stories, and am often quietly aghast.

    It absolutely blows my mind to see anyone in this country protest a single-payer system such as the one my wife and I enjoy (which is pretty close to identical to Medicare). I will never in a million years understand the problems they think they see.

    And here’s the kicker: because I had guaranteed health care, I was not afraid to go to graduate school and completely re-invent myself. From Navy SEAL officer to data scientist in just a few short years. I am quite certain that I was a net plus to the GDP, not a drain on the federal budget. People have no idea what a difference guaranteed health care can make.

    • WayUpstate says:

      I can echo all this experience plus more…. I was born in a military hospital in Germany (Dad was career military), graduated from college while still part of his military coverage, and went into the military for nearly 21 years. After retirement at age 43, I elected to have Tricare Prime associated with my primary care at a large military hospital (NOT VA..I have to constantly explain the different) no deductible, no co-pay, no Rx cost of any kind. Total cost is $50/month. A socialist paradise! The good: Generally easily available appointments to a see a PA who then routes me to the appropriate specialist (cardio, etc) or directly to a procedure (removal of pre-cancerous skin cells) again within a week or 2. When I blew out a knee, I knew I was working with orthopedic surgeons with tremendous experience. The critics always counter that “you get no choice in who you see.” I could not disagree more. The two times I’ve questioned a GP’s diagnosis or recommended care, I was immediately routed to someone else that had MORE experience or had MORE credentials. I’ve never felt like I had no other options. What’s the downside? As big as it is, DoD it still at the mercy of big pharma WRT drug development and availability. Also, unless you go to one of the biggest facilities you may find seeing a low-density specialist to require a referral to a local civilian provider and that provider accepts the relatively low reimbursement rates from Tricare (I’m told it’s more or less the Medicare rate) which puts higher-end providers out of reach without reaching into your pockets. Frankly, I consider that a feature and not a bug. Oh, there’s one other thing: Recent changes to law allows you to sue your provider but it will be handled as an administrative case and payments are likely to be low. Yes, the bureaucracy is there but there’s a unity of effort and the military doctors have elected to be there and yes, some got some/all of their med school paid for by the military but they still acknowledged that they might be signing up for some long-days in a combat zone. While the MDs are paid well and with special pays, they make nothing compared to their civilian peers yet many of them make a career of the military. So, here we have a system that’s comprehensive (I pick up my prescription within minutes of seeing the GP), with MDs paid at or below the median wage of MDs in the U.S. that seems to work.

      • vmsmith says:

        I was in Tricare Prime for a while after I retired. This being health care, I thought “Prime” was high-end and I was willing to pay the small fee for it.

        I ended up dropping it because I needed some minor (but niche) surgery associated with skin cancer and the one guy in my region who was considered the best didn’t accept Prime. I have no idea why.

        In any case, I switched to standard and never looked back. It’s comprehensive and effortless. Everyone should be so lucky as to have it.


        While the MDs are paid well and with special pays, they make nothing compared to their civilian peers yet many of them make a career of the military.

        I’ve talked to a fair number of military physicians about this. Many of them simply want to practice medicine, period. They really like the lack of paperwork and potential legal issues they would have to deal with in the civilian world, and the pay plus benefits are more than adequate.

  32. k says:

    Hi all.

    I’ve had a fair chance to compare different systems from both ends (I’m a ‘frequent flier’ patient, my SO is a junior doctor). I had cancer at university and needed follow-up care for it for years afterwards. At the same time, I worked and lived in different countries, so eventually accumulated insurance and healthcare experiences from the Netherlands, the UK, India, Thailand and the US. I’m in the US right now on the Aetna plan, which works quite okay for me but it still feels like a downgrade.

    I think my experience in the Netherlands has been the best so far. The Dutch system can probably be best described as Obamacare on steroids. All insurance providers are private companies. Insurance is compulsory—you pick your company (there’s no single ‘marketplace’ last time I checked, you just go to the insurer’s website to register). Some employers have agreements with insurers, but that pretty much amounts to you getting a code to enter while registering on the website and getting a small discount (some 10% or so) on your monthly premium.

    I say “on steroids”, because the regulations of premiums, deductibles and reimbursement rates, as well as what procedures are covered are also subject to regulation (and change every year). So getting your health insurance essentially involves deciding just on more or less two variables: the trade-off between monthly premium and the annual deductible (as of now, from EUR 385 to 885) and the rate at which out-of-network care will be reimbursed.

    In-network and out-of-network have somewhat different implications than here in the US, however, because—other than GPs—nearly all doctors are salaried and specialist outpatient care is provided by hospitals’ clinics (most often literally in the same building/complex). So at least when it comes to the kinds of doctors I would see, there are no private practices and generally all hospitals are in network for all insurers. For many years, the only ‘out of network’ problems I’ve heard of would be with allied professions like physiotherapists.

    Gatekeeping is strictly enforced. Regardless of the kind of insurance you have, you need a GP referral for any specialist care. It’s never been a problem for me, but every now and then I see social media complaints from (mostly foreigners) that e.g. would not get an ENT referral for their chronic sinusitis etc. The corollary (and something that I immensely benefitted from) is that the system can be brutally efficient in triaging. Once I was in the “cancer” track, I got my CT and bloods done a day after seeing my GP, got seen by the specialist on the same day, got my surgery done the day after and started chemo a fortnight later (by comparison, the current ‘aspirational’ NHS England target is to start treatment within 62 days from the point of referral). Because nearly everyone uses the same electronic records system, the ‘priority’ designation followed me everywhere, for example allowing me to jump the queue at the phlebotomist’s (my queue number would magically appear on the screen just after I showed up).

    One minor difference with the US is also that all payments are between you the insurer—the hospital or the doctor sends the bill to the insurance company and if there’s anything that you owe because it’s not covered or you still have your deductible to spare, the company sends you the bill—so there are no people with POS terminals running around the A&E.

    What I personally liked about the Dutch system best is:

    – Unlike the UK or, to an extent, Germany, because there’s no two-tier (public/private) system, it’s quite egalitarian. Since everyone has an Obamacare-style private insurance, there’s effectively no “red carpet” track (banning private insurance would have the same effect, but even in Europe that would be politically unattainable). On the other hand, with all the love that the Brits have for the NHS, private insurance with Bupa or Aetna is the default perk of very many white-collar jobs (amazingly, including the public sector—like the Bank of England.
    – It doesn’t force you to be your own doctor. In due time, I was happy to learn more about my condition, but at the time I was really happy that the only decision I had to make was essentially to choose my GP. Everything else was on the autopilot, and I had sufficient trust in the system to be sure that I would get the best care I could. I was trying to finish uni in time and I’d have had absolutely no bandwidth to look into the U.S. News & World Report ‘TOP 100 oncologists’ rankings or however else people are supposed to pick hospitals and doctors.
    – At least on the patient’s side, amazingly little bureaucracy. No new intake forms at new doctors’, just a single bill from my insurer, all referrals done through the system. Compared to that, it’s really taxing to navigate Aetna/Labcorp/the hospital/the partnership that employs the hospital doctors/my PCP stateside.

    The positive sides of the US system:
    – if you’re the kind of patient that benefits from a more tailored approach (because your condition is so rare, or so is your genetic makeup, or have some weird but justified preferences for drugs and treatments), you’ll be better-served here. My condition was pretty run-of-the-mill, but I shouldn’t take that for granted.
    – it obviously subsidises R&D in a way no other country does
    – overconsumption of healthcare has probably negligible positive effects at the population level, but it could (subjectively) help a lot at the individual level. Since moving to the US I’ve seen specialists for fairly minor ailments and in some cases (like, say, the allergist) the improvement in the quality of life was really huge. I’d probably not have done it in a system with more gatekeeping/rationing.

    Hope this can help in the discussion somewhat, as it seems that health insurance debates in the US either do not consider at all reforms in countries outside Canada, or reference them in a cartoonish, detached-from-reality forms (“Nordic socialism”). That said, I’m quite pessimistic as to whether anything better than what we currently have is feasible without some major cultural changes. (Specifically, the way I see it, because people are so reluctant to accept rationing/gatekeeping/waitlisting or any other method of constraining demand in a transparent way, insurers are incentivised to do so in an opaque way, through small print and confusing bureaucracy).

  33. k says:

    (Oh and as a nod to the Amish post, there’s also a system of HSAs for conscientious objectors from the Dutch Bible Belt, who like their Pennsylvanian brethren oppose insurance on religious grounds).

    • Gnecht says:

      Any good references or search keywords to start research on this? I’m not confident in my foreign-language web search abilities. So far I’ve seen government.nl and iwcn.nl websites but nothing on this specific feature of Dutch health care.

      • k says:

        The English Wikipedia article is quite okay, actually. Beyond that, most of the sources would be in Dutch. I would start with the website of the main regulator, https://www.zorginstituutnederland.nl/ (probably just Google translate the Dutch website, as the English section is just barebone). I may translate the relevant bits once I find some time (and if it’s something that people find interesting).

        EDIT: This is the page about the conscientious objector scheme—Google Translate renders it quite faithfully: https://www.hetcak.nl/regelingen/gemoedsbezwaarden

        Overall, the two keywords would be “gemoedsbezwaarden” (conscientious objectors) and “zorgverzekering” (health insurance). Google or Bing translate both do a good job. Unfortunately, I can’t find anything more detailed in English—both the scheme and the very existence of the “Bijbelgordel” aren’t well-known outside the country.

        EDIT2: Relevant statistical data (again, only in Dutch but easily translatable are in this report – https://www.rijksoverheid.nl/documenten/rapporten/2019/10/14/vws-verzekerdenmonitor-2019 in Chapter 5)

  34. Charlie Lima says:

    American health insurance is convoluted because the essential truth of American health care is expensive because it employs Americans to treat Americans.

    After all the US contains several nation-sized closed healthcare systems and none of them perform closer to international norms than to US private insurance norms. Be it Tricare, the VA, IHS, Kaiser, Cleveland Clinic, Mayo, or any of the other large players (e.g. basically any of the Californian Medicaid plans), they all cost more to deliver care than international norms. And you cannot draw a line that shows me any coherent relationship between internal governance structure and cost or quality outcomes. Often, the best and worst systems use the exact same governance structures.

    So now we get to the tinkering aspect. Yeah, pretty much everyone agrees that large tax cuts on remuneration through healthy insurance is bad. But it is trivial to point to past changes that blew up in obvious fashion. The ACA was supposed to have an online website where you could compare plans and costs. Yet it crashed horrifically, handling volumes below an average day at Amazon. EMTALA guarantees emergency care, yet we still are having legal challenges regarding basic terms and definitions over thirty years after its passage. The VA has a relatively simple mission and loads of bipartisan goodwill, yet it has endured repeated scandals.

    Any good Bayesian would have to have a very strong prior saying that the US government will not implement this effectively. That brings in a lot of downside when tinkering with a system that mostly works for most people most of the time.

    If you want to change the US healthcare system, you need a working model. We got Obamacare because we had a working model in Romneycare that could at least plausibly show that this had worked in the past. Absent some proof of concept within the American economy we just a have a holy host of confounders for international comparisons and a long track record of government “reform” going tits up.

    Because remember, at the end of the day we are talking about system that has to be able to work when Donald Trump/Bernie Sanders/or some other incompetent/evil/malicious person is ultimately in charge. We are talking about a system where extremely skilled lobbying groups are going to try to protect both salaries and staffing ratios. And we are talking about system where patients will at least initially expect a awful lot of coverage and options.

    • albatross11 says:

      Medicare works passably well–it’s expensive but old people do actually get treatment. Expanding medicare thus seems like something we could probably do.

      • Charlie Lima says:

        Everyone gets treatment in the US if they fill out the paperwork. EMTALA means you get treated for any emergency regardless of ability to pay. Medicaid pays for healthcare if you are poor. The ACA means that if you are near poor you get heavily subsidized insurance premiums. At this point, everyone can get healthcare.

        And if we are not going to object about cost, we could just go back to the old, simple model. Insurance pays cost plus a small fee and the patient goes wherever. Provider networks? They exist to allow insurance companies to reduce costs by assuring volume. Pre-authorization? Reduce costs by, allegedly, stopping marginal cases and definitely by having cases resolve (e.g. the patient dies) before care is authorized. Formularies? Again, a means to limit access to expensive stuff when cheaper things work.

        And of course, there is the whole argument that, allegedly, Medicare pays below costs for many things and that this cost burden gets shifted to private insurance. No idea how the internals actually play out, but I do know that if everyone paid Medicare rates there would be less money coming in the front end. Which seems unlikely to be sustainable once the physicians’ and nurses’ lobbies get to work on it.

        • eric23 says:

          Everyone gets treatment in the US if they fill out the paperwork.

          That is incorrect.

          EMTALA only treats you for emergencies. It doesn’t provide the ongoing care which would have prevented those emergencies (often for a much lower overall cost).

          Medicare and ACA only cover a subset of people. It is easy to earn too much for these to help you, and then to be bankrupted by an unexpected bill of tens of thousands of dollars for a relatively routine procedure.

          • Charlie Lima says:

            You are incorrect.

            EMTALA, as initially noted, means that everyone gets emergency care. I cannot do more than correctly summarize what the bill does.

            Medicaid does indeed cover the poor. And the ACA does indeed heavily subsidize insurance.

            People who earn too much for the ACA subsidies, which is >$30,000 per annum for a single individual, can afford healthcare premiums. Bankruptcy for tens of thousands means that you forewent paying insurance premiums.

            Everyone can.

            Not everyone does.

            But please do, show me a documented case where somebody makes too little to afford rent, food, and clothing who is either ineligible for ACA subsidies or cannot just afford the premiums for healthcare. I would be most interested in seeing a case where people were unable to afford the basic necessities of life, but still remained ineligible for ACA subsidies.

          • etheric42 says:

            A 22-year old in a major city in Texas with no spouse/dependents, making 30k/year MAGI (so after 401k/IRA/HSA) would be eligible for $158 subsidy against a $255 HDHP. This would be roughly $1200/year, plus worst-case scenario years would be an additional $6900, representing $7100 or 23% of their MAGI. Which isn’t great but is survivable, particularly if they’ve been maxing out their HSA.

            Chronic conditions would be better served by a lower deductible plan, but the right plan to choose depends on the chronic condition and they all expose the buyer to higher cost in event of a catastrophe.

            The problem is not all low-income workers have access to the ACA and may be forced into a plan that costs them 10% of their MAGI plus a high deductible without the benefit of an HSA. The only hope for those workers is to find another job, but health benefits are usually hard to determine when you are job hunting.

          • cuke says:

            This is a really good point about health benefits being hard to determine when you’re job hunting. Healthcare costs are a big part of a person’s expenses and yet when people are interviewing for a job they’re lucky to find out what the actual salary is until they’re being offered the job, much less being able to know whether the health plan is workable for them. This seems like another really significant way in which we don’t actually have the “choice” that our system is supposed to provide us with for all the extra hassle.

            I also have had plenty of patients who started with one health insurance company and their employer changed it out from under them without any notice, including dramatically cutting back on key benefits like deductibles, co-pays, or whether certain services were included, etc.

          • Charlie Lima says:

            10% of MAGI is still survivable. I make no claims that everyone in the US has stress free or even healthcare at prices consistent with human thriving.

            But they still can get healthcare and meet all their basic needs of living.

            Houston, for instance, lists a number of efficiency apartments for $400 per month. Let’s assume those are bad go 50% above bottom market rate and budget $600 per month to rent. $7200 for rent and $7300 for a bad year or a bad plan with a chronic condition is still $15,000 per year left for everything else. Call it $300 a month for food, a $100 for crappy public transportation, and $100 a month for utilities and we still have a cushion of $5000 per annum after meeting all basic recurring expenses.

            I would not want to live like this, and I think it is terrible that people have to fully economize on everything else to afford healthcare. But we need to be honest that in the US today we are talking about people who have healthcare because they are poor enough or people who could afford it if they economized everything else in life.

            And lest we forget, most people will not maximize the deductible every year nor will they stay at $30,000.

            Everyone in the US can get healthcare. You may need to put up with a lot to get it, but you can. We are properly debating the merits of less onerous healthcare (a very useful thing) rather than some healthcare at all (a much more dire thing).

            Debating how to improve healthcare is important and that is the debate in the US. It is counterproductive to make it a debate about having insurance, full stop, as that is simply not reality.

          • Edward Scizorhands says:

            Charlie’s comments here are probably the best defense of PPACA I’ve seen, anywhere.

          • etheric42 says:

            @Charlie Lima

            Not sure if it was clear, but I was agreeing with you. My wife and I made ~$22k total together in our 20s and it went well (we even bought a house together at that income). I was trying to provide evidence that it was workable.

            However I was also pointing out two groups of people that fall through that I am now going to expand to 4.

            1) Chronic disease patient. Forced to choose between: HDHP but having a higher base than healthy patients with the same cap (possibly even nearly hitting the cap every year), or higher-tier plan with better normal years (but worse than healthy people) but higher cap for bad years. I’m not saying they should pay the same as healthy people (although that would be a nice thing, I understand that not everything is nice). But it could be considerably worse every year.

            2) Those who get insurance through work but have bad insurance through there. The work insurance could be as much as 10% of their MAGI, without a HSA and with poor coverage (higher chance of hitting the cap) and with a higher cap. This combination could end up with higher maximum payments then the marketplace equivalent and often have higher minimum payments.

            Now adding:

            3) Single-income couples or couples where only one has workplace insurance with not great insurance through the one workplace that offers it. Due to the family glitch your employer could arrange for you to pay 10% of your MAGI for yourself, and then 50% of your MAGI for your spouse. Even if you were both in insurance-providing positions your premium cap is now 20%, not 10%. You would be better off getting a divorce temporarily!

            Seriously, this decision to penalize couples makes me SO ANGRY every time I think about it.

            4) People who can’t or won’t spreadsheet. Most plans on the marketplace or through an employer are not optimal for a particular individual’s expected risk. Well, I guess by definition only one is optimal, but a lot of them are very BAD. The number of times I’ve found out that when comparing plan A and plan B, the minimum I would pay on A is 1/2 of B, and the max I would pay on A is 75% of B, and the only time B would be less expensive is for $1500 range of total annual medical expenditure it would be at most $300 less expensive for the year.

            I’m not advocating for less options. I also understand you can’t idiot-proof things. For some people maybe some of those plans are optimal. Maybe they provide non-monetary advantages that are hard to parse in a spreadsheet. But I wish there were some way to make it even clearer that in the long run you are most often best off with the cheapest plan possible and the largest deductible, even if a $5,000 deductible looks scary.

            Where is the tech nonprofit that builds a great GUI for lower income people to do tax and insurance planning to maximize their return / minimize their cost?

            P.S. you forgot taxes in your calculation of that individual living in Houston. They may not pay anything or much in income tax but FICA still hits them for 7.65% of higher-than-MAGI-but-less-than-gross income or another $2,300

            P.P.S. back to that GUI: even I am leaving premium assistance programs on the table because the rules are so hard to find and apply to the decision, and I can get pretty obsessive over optimization, how can we make this system easier to parse and optimize for everyone?

          • Charlie Lima says:


            Please accept my apologies for mixing up your handle with a previous poster. I treat a lot of these of people and when my social workers sit down with them we pretty much universally can find them some sort of coverage that works if they live extremely frugally.

            I am willing to proven wrong, but I have yet to meet a real world patient who could not afford food, shelter, clothing, and healthcare. Now I have met untold numbers of patients who cannot afford their car and the above (normally their car being a lease or some other high cost option) or their credit card debt (and the above).

            For instance, I have a patient on some utterly unaffordable monoclonal antibody. She is not the most employable (having missed most of her 20s to health troubles), but she makes a go of it working at fast food (or least did back in March).

            What the current system does not give us is hardly any margin. Thankfully it is only really miserable in terms of affording things for the very bottom of the working poor. After all Houston’s median income is over twice what you are talking about here.

            And at the end of the day, bankruptcy is supposed to be part of the social safety net for when bad things happen. I mean sure it sucks to have higher interest rates for non-secured debt and some limitations on housing and employment … but exactly how much is rational to invest in a tiny minority of a minority?

            At the end of the day, I keep coming back to there being no easy fix to make American healthcare cheap. Americans like aggressive healthcare too much, the legal environment (e.g. standard of care nonsense) encourages little cost effectiveness, and nobody has been able to crack the code in spite of decades of spending billions on it.

  35. anonymousskimmer says:

    In the US people can go to any auto repair shop to get their car repaired from the insurance payout. I believe this is even the case with a comprehensive claim – which is a person’s own insurance paying out for an an-fault accident or no-fault damage.

    Isn’t the reason this is the case is because of laws passed which forbid insurance from locking a customer into their own preferred repair network?

    What is preventing said laws for medical insurance?

    • The Nybbler says:

      Insurance used to work that way for most — you’d pay a premium, and a deductable, then you’d pay 20% of the remaining bill with insurance picking up the 80%. Then at one point Congress went all-in on HMOs, requiring employers to offer them.

      • Garrett says:

        You then still have to deal with people on television stating that they can’t afford the 20%. Or everything having to do with the “donut hole” of drug coverage.

        • The Nybbler says:

          There’s no solution as long as appeals to sympathy are an indefensible trump. So things will just get worse… and the less sympathy-inducing a person you are, the worse they’ll get for you. The intuition that life-saving care should be taken care of for everyone before lesser care is allowed for anyone is a quite strong one.

    • WayUpstate says:

      My own auto insurance provider has ‘preferred provider’ shops where fees are reduced/non-existent. Just today, I was told by my provider that parking my car at a non-preferred shop would result in parking and storage fees. So, yes, there are indeed ways for auto insurance companies to ‘channel’ clients to businesses with whom they have negotiated fees.

      • anonymousskimmer says:

        I was told by my provider that parking my car at a non-preferred shop would result in parking and storage fees.

        How would your insurance company know the policies of an unaffiliated business?

        So, yes, there are indeed ways for auto insurance companies to ‘channel’ clients to businesses with whom they have negotiated fees.

        Sure, but they can’t refuse to pay, or pay wildly different rates.

  36. Neutrino says:

    Kaiser is underway on a review and revamping of its mental health delivery. That is in part due to some publicized patient suicides arising from apparently entirely preventable timely access issues in their Northern California service area. They indicate that they are making efforts to engage stakeholders as they revamp. If that sounds like some bureaucratic mumbo jumbo, then you share a perception with some Kaiser employees. Appoint committees, keep minutes, waste hours.

    Nonetheless, some patients have responded favorably, and not just due to some Hawthorne Effect. They say that there are more resources and more productive engagements, so there is that. Too bad that lives were lost to force changes.

  37. John Schilling says:

    No mention yet of the biggest logical failing of employer-provided health insurance: It requires one to have an employer, which you are least likely to be able to manage when you need health insurance the most. People who are seriously sick, usually aren’t big on working full-time jobs.

    And this ties into the biggest practical failing of health insurance in general, the pre-existing condition.

    If you’re one of the vast majority of Americans who doesn’t become seriously ill before they graduate college or whatever, you get employer-provided insurance. Great. If you spend the rest of your life not getting seriously ill, only the sort of minor maladies that are resolved in a few weeks at a price you could pay out of pocket if you had to, no problem. But if you’re that person, you didn’t need health insurance in the first place.

    If you need health insurance (for yourself), there’s a good chance you can’t work for the employer who provides your health insurance. Now you need a new source of health-care funding, which we can call “insurance” but since you’re already sick with something that you can’t afford to pay for, it’s not really going to be “insurance”. Which, OK, we can kludge together solutions, but trying to do so under an insurance model isn’t helpful and trying to camouflage who’s really paying for it isn’t helpful.

    What actually pays for America’s serious health care expenses isn’t employer-provided health insurance. It’s parents’-employer-provided health insurance, it’s spouse’s-employer-provided health insurance(*), it’s ex-employer-if-you’ve-been-unemployed-more-than-one-but-less-than-eighteen-months-and-filled-out-the-paperwork insurance, it’s let’s-pretend-this-sick-leave-is-temporary insurance, and sometimes it’s Obamacare “insurance” and always it ends up as Medicare. Bleh. Just let people buy insurance already.

    * And given the ongoing devaluation of marriage in non-medical contexts, how long before “spouse” becomes “insurance buddy”?

  38. deciusbrutus says:

    You’re missing a much bigger problem: Even with all of those people who aren’t using medical resources, psychiatric doctors are generally maximally busy and have no room for new patients without reducing the level of care.

    The confusing loops of health insurance are how the US rations healthcare. Solve the healthcare scarcity problem, and insurance will straighten out the restriction. Remove the insurance culling, and patients will be culled and prevented from accessing care by some other means, (the default way being waitlists of unbounded length).

    • Lambert says:

      Some of the scarcity is artificial and caused by the doctors’ cartel, but some can’t be got rid of easily.
      MRI machines are expensive.

      Given that there will be rationing of healthcare going on, why not find a way to do it that isn’t maximally Kafkaesque?
      Wait lists don’t require three parties to fill out enoumous amounts of paperwork.

      • The Nybbler says:

        It’s not maximally Kafkaesque. It’s maximally byzantine. And while that’s probably mostly not deliberate, it does have the effect of hiding the rationing, which provides an incentive to keep it in place.

      • Charlie Lima says:

        Waiting lists require people to live in pain and unable to do the things they enjoy most in life.

        Spending three hours doing paperwork or spending three months longer with a failing hip that stops you from going hiking or visiting the grandkids? I think everyone I know would take the paperwork.

        And besides, you can buy your way out of the paperwork. This means that at the margin, some people are paying to create more capacity and this makes everything move faster and easier for the rest of us.

        Wait lists are terrible as your enjoyment of life goes down and your productivity goes down with no offsetting benefit to society. Paperwork at least creates make-work that recycles some of your wasted resources into the rest of the economy.

        • Lambert says:

          The argument I was responding to is that it’s a form of rationing.
          That there’s more people who could do with hip replacements than available surgeons or empty operating theatres.
          You can ration on the basis of who’s been waiting longest or who has the most money or who’s best at navigating the bureaucracy. But no amount of shuffling will change the fact that you can only treat as many people as you have the resources to. Doing paperwork doesn’t make ORs appear out of the ground.

          I’ve bought myself out of plenty of waiting lists.

          >Paperwork at least creates make-work that recycles some of your wasted resources into the rest of the economy.


          • Charlie Lima says:

            Rationing with cash induces people to build more ambulatory surgical centers, find ways to do procedures more efficiently (to make more money), and all the other ways we innovation in pursuit of profit.

            Rationing by paperwork is an inefficient way of rationing by cash. You can, after all, just hire somebody to fill the paperwork out. More often your doctor’s office will hiring some specialist and then increase their charges to you or your insurance company. The insurance company will either drop the doctor from the network or increase your premiums. Ultimately takes money from you and gives it to the paperwork specialist and you jump the queue compared to the folks who struggle through it on their own. The specialist pays taxes and buys goods, maybe from you, and part of the cash you sacrifice goes back into the productive economy (though less than if you had kept your cash).

            Eventually the paperwork arms race gets costly enough that somebody cuts them out by building a new center that takes less paperwork, but charges more money.

            Waiting does none of these things. You cannot do anything to improve your lot so the people who have resources to spend and are willing suffer like everyone else. At no point do we create an obvious payout for anyone expands the system.

            When allocating scarce resources, waiting is usually the most destructive option. Money induces more efficient resource use. Paperwork is nowhere near as much lost time and still lets the money through until eventually somebody figures out how to make a large profit off eliminating (some of) the paperwork.

  39. William75 says:

    These are all good points. I also agree with the top line “compassion” point and I also think the link between employment and health insurance is dumb and a historical fluke of WWII price controls and we should get rid of it and have some form for public health insurance (I have a favored approach but won’t go into it).

    I think there is a major problem with the “efficiency” argument that most people either don’t understand or hand waive away. The U.S. spends much more on health care relative to other developed nations with no detectable benefit – this is true. But it is NOT because insurance companies are “stealing” the difference and it will go away if the government steps in as middle man. It is because health care workers in the U.S. make much more than they do in other countries. Heath care will continue to be much more expensive in the U.S. if we switch to single payer tomorrow. If you think the government can unilaterally force a 20%-30% pay cut on U.S. healthcare workers, you’re delusional. Scott may be noble enough to volunteer for a huge pay cut for the public good, but as a group healthcare workers are a strong political force and will fight to the death to prevent it and they will win.

    If you understand that conservatives are stupid and/or dishonest when they say that we can balance the budget while cutting taxes and leaving entitlements largely intact by cutting “waste, fraud, and abuse”, thinking we can provide the same healthcare, only more of it, to everyone within our national borders without cutting healthcare wages and not raising the hell out of taxes on everyone, you are engaging in cognitive dissonance.

    • benf says:

      Health care workers do make more in the US, but it’s also true that the system is packed full of middlemen and shareholders skimming off the top.

      The problem is, those middlemen are also taxpayers with mortgages and vacation plans. One man’s waste is another man’s paycheck. SOMEBODY is going to have to take it up the tailpipe.

    • Thomas Jorgensen says:

      US doctors are paid more, they also see a lot more patients. This might actually explain why the quality of US healthcare is not what it should be (Rushing things bad. Lots of practice, good, fatique bad… overall, having more doctors working more regular hours would probably result in better care) but it does mean doctor salaries are not as big a part of the cost as you would think, per patient, doctor salary is comparable, and it most certainly means reforms in this field are possible – if you build more med schools, and scale back doctor hours while letting inflation eat their real pay at the same pace, they will most likely not object. Doctors want to see their families sometimes too.

      • Charlie Lima says:

        European statutory maximum for physicians is working 48 hours per week, anything above that requires a waiver.

        Average for American doctors in 51.4 hours.

        Maximum shift length in the NHS is 13 hours. In the US I have worked over 30. The NHS also limits docs to four tens then a mandatory 48 hours off. I have worked fourteen twelve+ many times.

        American docs make more than European ones in part because they simply work more, indeed the average US physician’s work week violates a half dozen rules for European doctors.

        When you figure the monetary value of say, not having 30 hour call (tens of thousands per annum from what I can see) or never doing a week of longs without a break … it should not surprise us.

        Also note a few other things:
        Medical schools are not the bottleneck. Every year a few hundred or thousand American MD grads fail to Match to a residency. This leaves them in limbo holding massive debt. The bottleneck is the ACGME playing god with residencies slots (e.g. they are currently leaving over 1,000 qualified new docs on the sidelines by not loosening residency slot numbers and instead we are trying to bring docs out of retirement who are much more likely to die).

        To their credit, the number of residency slots has been climbing in the last decade. We are just slowly making a dent in a problem the ACGME created over decades.

        And physicians work hours are falling. Currently Millenial docs are working fewer hours than older generations. The only reason physician salaries are not spiking higher is that the Boomer and Gen-X docs are not retiring as soon as previous docs. Hours are already falling, that is unlikely to be margin for reduced pay any time soon.

        And lastly recall that European docs are compensated in ways that are not obvious at first glance. US docs have to go to school longer, in Britain (for instance) you start on the physician track while a teenager. This means you start earning physician salary sooner. Likewise, in much of Europe physicians do not pay for their training (currently a cool $200,000 at 5% interest, excluding housing costs) up front nor is the pay differential between residency and being an attending as high. European docs also tend to retire earlier and have more vacation time.

        And lest we forget, at the end of day all Physician Services amount to under 25% of the medical budget and actual physicians’ salaries amounts to under 8% of the total budget. Even if you forced a 50% pay cut on US physicians, you would buy a whopping 2 years of medical cost inflation. If you outright enslaved US physicians you would get just over 3 years.

        American healthcare is not expensive because docs are paid well for undergoing over a decade of education and training and working crappy hours. It is expensive because there are more people involved. More Nurses. More Admin. More Orderlies. More Lawyers. If there was an easy way to cut these numbers, somebody would have done (e.g. Kaiser, Mayo, IHS, Tricare).

        There is not a simple way to provide cheap healthcare to Americans using Americans. Both the consumer and provider side have too high of expectations.

        • William75 says:

          This was very good, thanks. I have no doubt that you know much more about the topic than I do.

          I’m amending my theory to something like, “in order to reduce per capita costs without restricting care, we would need some combination of cutting salaries – not just for doctors – and firing many people that we deem unnecessary, while convincing Americans that their type of care will change.”

          I still don’t know if it would work; e.g., I understand that American hospitals are more like hotels compared to many European nations, and as with college expenses, you can’t “unbuild” all the luxurious and expensive facilities.

          • albatross11 says:

            There’s a destructive feedback loop here.

            If medical (and other dysfunctional bits of our economy) inflation were a simple matter of finding the villains who were making off with all the money, we would all know it by now. Our media and politicians are all about finding villains to blame for complex social problems. Even if the villains remained too powerful to stop, they’d be visible. And they would be insanely rich, not just cardiologists buying McMansions and Teslas.

            Breaking the price/market system so that nobody knows how much anything really costs and prices have no connection with scarcity or value or resources consumed makes it possible to just waste an incredible amount of money without anyone getting rich. Similarly, endless complex zero-sum games between insurance companies making up more complex hoops to jump through to get paid and doctors’ offices hiring more people to jump through those hoops are the kind of thing that can consume an arbitrary amount of resources, while not creating any great pool of wealth.

        • Edward Scizorhands says:

          In Against Tulip Subsidies Scott talked about how most other countries medical education is completely sane, while ours is nuts. We spend about $4 billion more a year making sure our doctors have extra undergraduate degrees, which is minor when talking about $3 trillion of medical spending a year, but it’s a $4 billion bill just lying on the ground for us to take.

          • Charlie Lima says:

            This one has an easy story though. Medical schools are wonderful sinecures for a bunch of white collar folks who would otherwise be in lower demand. Most of the faculty are not physicians. As tuition prices go up, folks inside can build larger petty empires and have more perks for being a bigshot in an expanding bureaucracy.

            If we did something sane: eliminated the BS/BA requirement, made the pre-clinical years competency based only (e.g. you could skip them by studying from Sketchy, FirstAid, UWorld, and the odd Youtube series and then just passing Step 1), and then dropped half of M4 for a less silly way of allocating residencies you could drop the entire price down to maybe $40,000. But this puts a lot of people out of work. And they are the ones who sit on the LCME, ACGME, and the like that have silly requirements about what is needed to credential MD granting schools and ultimately medical licenses.

            It is easily a $5 billion dollar bill on the ground, but there are vested interests that want to keep it.

            And heck, we may be facing a literal MD shortage during a pandemic and the ACGME has done precisely piss all to open more residency slots, even just prelim years, so that the thousands of MDs who failed at Match could be certified before any second wave of Covid could run through the physician population. They are literally willing to risk many patients dying rather than loosening their hold on the bottleneck.

  40. benf says:

    You would think a gigantic pandemic and economic crisis, in which nearly everyone is at huge risk of medical bankruptcy through no fault of their own and also all get thrown off their health insurance because the economy is gutshot, would demonstrate once and for all that the employer-based system does not and cannot work. We’ll see.

    • William75 says:

      I think the major problem with getting political support for single payer or some variant is that while most Americans think that *Americans in general* have bad health insurance, they also tend to like *their own* insurance and don’t want to lose it.

      I know this usually devolves into an argument along the lines of “once you explain to them they will get better and more stable insurance, they will understand.” Maybe that’s true (I doubt it). But getting political support for “you will lose your current plan, and if you like your current doctor, the government will decide whether you get to keep them” is not going to be easy, pandemic or not. I can easily see a scenario where Democrats have the White House and large majorities in both houses of Congress and don’t pass anything close to single payer.

      • Thomas Jorgensen says:

        … I think the problem here perhaps is that most people do not use their insurance much at all, and most of the ones that do are on medicare. It is easy to have a good opinion of the sword on the mantle piece you never wield.

        I would quite like to see a poll that broke down the opinion people have of the system by whether they have had a significant health event while on their current policy.

        • William75 says:

          That would be interesting. It might cut either way. Going back 20+ years, my wife had a bad experience with a bad specialist forced on us by Aetna HMO. But our solution was to pay out of pocket for better care and switch to a PPO. It left me feeling that single payer would just be a mega HMO with no escape.

        • Charlie Lima says:

          Most Americans use their health insurance. Kids have a whole slew of mandated health benefits and they tie nicely into requirements for going to public schools (e.g. get these vaccines or go spend time filling out the I’m an idiot conscientious objection forms). Even more commonly people use their insurance for childbirth and pregnancy as well as contraception.

          It is pretty much only single young men who have never had to break out insurance.

          And American insurance is generally not bad if you need basic things. Everybody covers amoxicillin, atenolol, and atorvastatin. Even for something like appendicitis, you can typically find the covered hospital and do okay most of the time.

          Things get hard when you either have less common things, or your situation changes during the course of your care (e.g. look at how many of Scott’s examples involve swapping jobs while needing new or ongoing healthcare). Americans only change employers about once every five years, and that is biased towards the young and people in careers without employer provided health insurance.

          If your job is stable, you can typically ride out anything as long as you wait for the system to grind slowly (granted it is a royal pain for your providers and maybe HR). You can typically hop insurances if your health is stable without too many ongoing needs. It is combining the two which is less common and more troublesome.

          At least in part American insurance concentrates a lot of the misery into a small fraction of people whereas single payer tends to spread the misery over the whole populace. American patients think it is an outrage if they have to wait more than a couple of weeks for their surgeries, and they often want to be able to pick the day it happens. In other systems, everybody frets less about having surgery while unemployed but has to wait longer in pain before they get it.

          There will be losers with reform. I suspect it will be the majority of people for all considerations beside costs. And then you have a very well earned fear that the US government will do a half-assed job regardless.

      • albatross11 says:

        So, I recognize that the current US system is a wealth-destroying, mobility-limiting, innovation-sapping clusterfuck. And yet, my health insurance kinda-sorta mostly works. I get to keep going to my doctor and keep getting preventative care that makes sense, my kids keep going to their pediatrician (the doctor we’d be most unhappy to lose, honestly), my wife gets to keep seeing her normal doctor and a specialist she needs, and it all more-or-less works. The quality of care is high, the paperwork is dumb and annoying but minimally tolerable, and while we routinely get weird bills for extras that somehow weren’t covered and that often it turns out we don’t owe[1], it doesn’t cost us too much.

        If I believed that a reform would actually make this stuff better, I’d be supportive. But what recently-enacted US government or state government program would you point to as an example of why I should expect any such reform to be done well?

        [1] Note that this is systematic fraud, and the companies that send fraudulent bills make a business model out of it.

    • Squirrel of Doom says:

      I think most everyone agrees the current system is horribly flawed.

      That doesn’t mean they can unite around a single practical solution.

    • Garrett says:

      Why not view it as evidence that we shouldn’t have so many non-essential workers? Instead, everybody should be working in something essential so that even in a pandemic they can’t be justified in being laid off or fired.

      Also, how do you ensure “no fault of their own”? A good number of the people that I see in EMS are due to conditions which are within their control that they’ve elected not to control.

      • Doctor Mist says:

        everybody should be working in something essential so that even in a pandemic they can’t be justified in being laid off or fired.

        Because under normal circumstances, if I want to spend my money on a haircut or a movie, who are you to tell me I can’t, just because in the rare event of a global pandemic the barber and the projectionist really ought to stand down?

  41. I-am-Far-Ted says:

    It is hard to feel any sympathy for the woman who wants to leave her husband but still wants him to support her anyway.

    Though, I agree 100% that men should be paid with money – not with insurance.

  42. njnnja says:

    I’m someone for whom the current system works. High medical needs member in the family, and for 3 years I had massive problems with Cigna. Then I switched plans, (since my employer offers more than one plan), and within 6 months, UHC figured everything out, and I even have a “family coordinator” to deal with whenever a provider or their billing office is causing a problem.

    I know that not everyone has employer coverage, and certainly not employer choice. But the system does work for someone: me and my family. And the risk that “any other system” locks me into something that doesn’t work again is terrifying.

  43. Swami says:

    The issue nobody seems to be addressing is whether psychiatric care should be covered by medical insurance at all. I certainly would like to be able to purchase insurance for catastrophic medical care without having to pay for people to see a doctor because they feel depressed or anxious. Of course, I am also fine with other people choosing a plan with such coverage, though it will obviously cost a lot more, especially without the insurance company acting as a gatekeeper.

    • cuke says:

      The risk of suicide for untreated depression is about 20% over a person’s lifetime. That’s without accounting for productivity costs short of suicide, impacts on children being raised by people with untreated depression, and the costs of people on disability due to untreated depression and associated health problems that come from it.

      Your statement makes it sound like people are getting access to medical care because of a “feeling” as opposed to a medical condition that has substantial costs to individuals and society.

      If you’d like a plan that excludes people who have depression, perhaps other people would like to exclude disease conditions that carry similar risk of death and disability. Cancer? Hypertension? Diabetes? Congenital heart defects? It’s hard to envision building a coherent system around these kinds of exclusions.

  44. MasterofPuppets says:

    Right after Obamacare passed I tried a Christian insurance cooperative. Basically you pay your monthly fee into a big giant pot that then covers healthcare costs instead of the “contract for service” model of private companies. This one required a letter from a pastor saying you attended church, you had to affirm you lived a “Christian lifestyle”, and acknowledge the plan didn’t cover certain things like abortion. Don’t recall the enrollment requirements being too onerous, but obviously would not be for everyone.

    IT WAS BY FAR THE EASIEST “INSURANCE” I HAVE EVER HAD. All I would do is send in the bills at the end of the month, deduct my monthly contribution (which was half of what my insurance contract was at the time), and I would get a check for the balance. Of course people that live a Christian lifestyle and would sign up for such a co-op are probably at least middle class and not in a high risk pool which helps, but I think such a private system would work for around 80% of the population.

    And, “doctor shopping” when you switch insurance companies is actually dangerous. The number of times I have had a colleague tell me, “my new doctor completely changed up my meds…said he saw no reason to continue the old ones…” is shocking. The most dangerous one I know of was a friend on an anti-depressant and benzo. His new doctor just cut him off after telling him he would need to do therapy for at least 3 months before he would prescribe anything. That is borderline malpractice. Friend ended up having heavy withdrawal symptoms he self medicated with alcohol. He was a mess for those 3 months but guess the silver lining was he never went back on any meds.

    No wonder people go it alone, order them from India, and try to just self-medicate.

    • Telomerase says:

      Still better than the usual practice you see in old people… doctors only add meds, rarely subtract. If you don’t run a drug interaction checker program yourself, no one else will either.

      • albatross11 says:

        Yep. When my dad was dying of cancer, he had like a dozen pills a day he was taking–of which the only two he actually needed were the pain and antinausea ones–the others were for long-term stuff (cholesterol) or stuff he no longer needed (type 2 diabetes–he’d lost so much weight from the cancer that he no longer needed his diabetes medicine). Nobody ever took him off anything until he went on hospice, even though at that point he’d known for several months his cancer was terminal.

  45. jstr says:

    In a job negotiation, is it possible to decline the offered employer health insurance in favor of a (somewhat) corresponding pay increase, so that one can go shop around for health insurance?

    • Telomerase says:

      Not really. The company can deduct the cost of your health insurance as an expense, you can’t.

      Of course no one would intentionally tie their health insurance to their employment if they had a choice. It is the same mistake as only buying your employer’s stock to pay for retirement.

      This has been a source of self-sabotage for the US economy since World War 2. Just goes to show that you can make some really terrible mistakes and still never learn from them 😉

    • Edward Scizorhands says:

      You could get 90%+ of the amount they pay to insurance to bump your gross salary. They have to pay about 7.65% in payroll taxes.

      You, however, are going to be fully taxed on the difference. If you are in a high tax bracket, you would need to get a savings of nearly 50% for it to be worth it. Even uncompetitive systems can survive well when the other guy has to pay double.

    • William75 says:

      I would say: (1) If you’re going to work for a large corporation, no. They aren’t set up to handle something like this. You can decline insurance but won’t get paid extra for doing so. (2) At a small or mid-size company, maybe, but I’m not sure. It will likely come done to whether there is an HR department or just a person who owns the place and is hiring you.

      One related example: years ago my wife got a job at a very small company. Before they made her an offer, she asked them *not* to offer her health insurance. The reason was that she was already on my plan and if she was offered health insurance but I carried her on mine, my company’s plan would charge us more (the logic being they don’t want to subsidize other companies, which I think is a common feature). The other option would be to lie but this way a way to avoid the problem without committing fraud.

  46. gbdub says:

    1) Many of the problems Scott lists are not due to any particular system or provider in the US being bad… but rather that there are multiple systems and switching between results in many people falling through cracks. This is exacerbated by the US, but it’s not going to be fully solved unless the entire country (or really world) is on one system (it’s not the fault of “employer provided health care” that Oklahoma’s Medicaid does not play nice with California’s!). Even then, changing doctors is still going to have to happen when you move… and many government run systems provide much less physician choice than the US.

    2) psychiatry is uniquely hard. Basically every patient has a “chronic condition” requiring long term care and any change to the treatment plan is at risk of creating acute crises. You don’t get involuntarily committed if changing doctors causes you to miss a couple PT appointments for your knee pain. And any kind of talk therapy is going to be much more sensitive to personal compatibility between doctor and patient. Any asshole can give me antibiotics for strep throat.

    3) my biggest gripe with Obamacare was the way it further entrenched the “employer provided insurance” model. Again, switching between systems seems like the biggest source of real bad problems likely to hit the average American, and legally requiring most employers to provide insurance makes this worse, not better. Better would be to move most Americans onto more portable plans tied to the individual rather than their boss or their physical place of residence.

  47. po8crg says:

    I don’t know much about American health care, but what I do know is that if I want to buy travel insurance (which includes medical insurance that fully funds all medical costs that I incur while outside the UK), then there are three different rates, depending on which countries I want included. The cheap rate is for “Europe” (the EU plus other European countries that participate in the EHIC reciprocal state insurance scheme, not quite the same as the geographical continent), the standard rate is for the world except the USA, and the higher rate is for the world including USA.

    That certainly suggests that the costs paid by an insurer are much higher in the USA than elsewhere.

  48. jacksontom says:

    I did not understand Scott’s anecdote about the young man with schizophrenia who has to rely upon private insurance and can’t get good treatment because unfortunately “all of the expertise in treating schizophrenia is concentrated in Medicaid clinics.”

    In Ohio, at least, the main “Medicaid clinics” are community clinics, technically “Federally Qualified Health Centers,” which treat Medicaid patients and which get enhanced Medicaid reimbursements and grants from the federal government.

    All of the FQHCs I’ve written about in Ohio (I’m a newspaper reporter) have told me they accept prlvate insurance. Do FQHCs in California have a different policy?

    • cdoconnor says:

      I agree, in MN there are community clinics that focus on people without insurance or with Medicaid insurance, but they will bill any insurance company. I guess depending upon the commercial insurance plan you have, maybe these community clinics are out of network. For me, they would be in network, but tier III instead of tier I, so a higher burden on me, but my insurance would still pay some.

  49. SCPantera says:

    How sure are we that Medicare For All would fix those problems though? Not trying to be contrarian here, I ask this as a retail pharmacist who spends all day dealing with insurance and as shitty as commercial health insurance is, if you have it you have access to a ton of options that Medicare patients don’t. Chief among them: manufacturer discounts.

    But also, Medicare is provisioned by a lot of the same insurers anyways and are subject to virtually all of the same sources of headaches. The big difference are in what Medicare law mandates coverage for but for everything required it’s easy to find something else they’ve cut back on. At the extreme ends, commercial plans don’t generally have the coverage gap–and deductibles are pretty comparable. Some state Medicaid plans are better–if I had to choose between California’s Medi-Cal and Medicare I’d 100% take Medi-Cal–but not always by much.

    People who get stuck on Medicare and are unhappy with what they get are just as boned as anyone else who’s stuck in their dead end jobs or with covered family members they don’t like.

    I’m super open to the idea of a central-government-sponsored healthcare program but I’m pretty sure we’d have to completely jettison Medicare in order to do it.

    • Edward Scizorhands says:

      I’m not sure Scott as saying that we had to to Medicare For All.

      There are lots of possible solutions. I think many are good, but they need to be sold responsibly and we need to upfront about what trade-offs we are making.

    • eric23 says:

      Nobody is “boned” with Medicare. They get a pretty good (though not perfect) comprehensive plan. If they want more options they can go to a private insurer for a supplementary policy, called “Medigap”. Since Medicare covers so much, these plans are much cheaper than a regular private plan.

    • Garrett says:

      Wait – California Medicaid pays *more* than Medicare? How the hell did *that* happen?

  50. Purplehermann says:

    The woman who is in a not-great marriage, but doesn’t want to switch because her husband comes with financial benefits is not an issue imo.

    Marriage having a financial component isn’t exactly new.

    As for the gay guy, what’s the issue exactly?

    • I-am-Far-Ted says:

      He wants his parents to pay to support him, but he doesn’t like making the effort to keep them happy

    • cuke says:

      I think perhaps the way to see this is that lots of people really need healthcare but can’t afford it outside of how they are currently getting it and how they are currently getting it may entail precarious situations that either change under them or are actively harmful to them. Having access to healthcare be linked to various things that are precarious and/or actively harmful to you is not a great way to organize an essential service.

      Like, in other countries, if people need to leave a bad job or a bad marriage or they lose their job, they can make those difficult changes without having their access to medical care be jeopardized on top of that. It’s like having your access to food or the fire department or to clean water be jeopardized by who you’re married to.

  51. Slocum says:

    I feel a little guilty posting it, but I haven’t seen this viewpoint in the thread, so I’ll just do it and then duck. I live in the U.S. (in Scott’s old stomping grounds of Ann Arbor). My wife works at the university hospital and we’re insured through her plan. The deductibles and co-pays are low, the care is superb, and we’ll be able to keep the plan after retirement (though we’ll have to pay a fraction of the cost for her and half for me). Health insurance is something we really never have to think about. I have an older relative whose wife was a school teacher. Her medical plan has covered both of them during the decades since she’s been retired. So — one solution to medical care in the U.S. is…make sure you or your spouse have some kind of government job. But also there’s another relative who’s had serious medical problems for a few years — enough so that he’s not been able to work and has been on Medicaid. That turned out to be a great insurance option too! He’s received the same superb care (life-saving in his case) in the same university hospital system with virtually no out-of-pocket costs at all. So, in the U.S., two good options seem to be A) work for the government or marry somebody who does, or B) be poor enough to qualify for Medicaid.

    • cuke says:

      No need to duck, this is a great comment, and I think highlights some of the weird effects of our cobbled-together system.

      Of all the people I work with (psychotherapist), school teachers have among the best healthcare plans I see. After them, it’s high-end private sector workers and then low-income people who qualify for our state’s version of Medicaid (though they will have fewer choices in terms of provider). It’s everyone in-between who has it harder in terms of access to healthcare — people in the private sector with okay jobs and not a ton of extra income or people with low-ish-wage jobs but who make just over the Medicaid limit for our state.

      The people who fit in this in-between group are often in their 20s-30s. They have high-deductible plans which means almost all their healthcare expenses are out-of-pocket. They have little savings because they’re early in their careers. They have student loans and car loans. This group, depending on their backgrounds, also don’t have a ton of emotional life skills on board yet. If they have mental illness, it may not have been diagnosed or treated yet, their lives and relationships are less stable. And sometimes they are raising young children. Without access to mental health care, they tend to use substances heavily, with all the consequent effects on children and partners.

      I wonder sometimes how the children raised by these people in the middle would fare better and how the health of these people in the middle would be improved in mid-life if they had better access to care in their 20s and 30s. Like would we see less childhood adversity and less mid-life chronic illness if we took better care of people while they are emerging into adulthood, establishing their careers, starting marriages, and raising children? There’s a lot of hard stuff that people need to pull off in the two decades between 20 and 40 and it seems like more access to healthcare might help with some of that.

    • scj1091 says:

      I think this dances around the observation that most Americans think that healthcare in the US is terrible but aren’t all that disappointed by their own healthcare. You hear about other people’s horror stories and they sound bad but your own are Just The Way Things Are. You get used to your system and how to work it and muddle through things mostly ok. My previous comment about the things I (strongly) dislike about Kaiser isn’t meant to imply that you can’t get good care there. You just have to jump through lots of hoops and be more of your own advocate than you would be for a private GP paid for by a PPO plan. I’d prefer another option, but I can live with this one. I think the number of Americans in this general situation is vastly underestimated, and these are the people who start to reach for the safety on their gun when they hear people talk about upending the healthcare system to [make it better/decrease inequality/make us more like <insert non-comparable European country here>].

  52. eyeballfrog says:

    A number of these problems seem to stem from the idea that you must have medical insurance at all times, which creates a friction against changing situations that might require a period without insurance. Is this actually a necessity?

    • Antistotle says:


      Because insurance is supposed to be two things–one is a way of spreading out payments over time, the other is sharing risk inside a group (risk pool) of people.

      If I only “buy” health insurance when I think I’m going to need it this blows both of those assumptions.

    • etheric42 says:

      There are temporary health insurance plans and the marketplace in the US (as well as cobra, where you pay your old insurance for a few months after leaving your job your share + your employer’s share). I think we just say “lack of insurance” in the US when we really mean “lack of savings”. Which is a problem too, and exacerbated by the cost of health care/insurance.

      This of course is not solving for the “change plans=possibly change providers” problem for people who need continuity of care. That might be resolved by researching the alternate plans before making the switch, but isn’t a guaranteed fix.

  53. Antistotle says:

    I’m in my mid-50s and with a few years exceptions (18 to 22) have been covered by some form of commercial insurance or cost-sharing my entire life. From about 43 to 44 I was living in AU and covered by US insurance under their system.

    I have had several surgeries, my daughter was born via emergency C section and had to spend a week in the ICU, and she she had a heart murmur *sort of*.

    The only problem I’ve ever had with health insurance was after the Affordable Care Act came in, and I was “contracting”. It was a problem because it was now *unaffordable* and we had to pretend to be Christians to get in on a cost sharing ministry. The one surgery I “needed” after that I saved up for and paid for out of my own pocket–I wound up paying just under the 5k contribution limit, but severely discounted because of the agreements the cost-sharing organization is a part of. If I’d have had “Obamacare” insurance it would have been more expensive (and the Obamacare insurance is 2x the cost of the cost-sharing program).

    There are no simple fixes, and there are no good solutions *for a country our size and demographic mix*. No matter what you do you will screw someone over hard. This is true in Canada and England as well–the NHS fucks over a certain percentage of their “clients”, it’s just that they’ve had that system in place for what, three generations and everyone knows the rules. Canada routinely has longer waiting times for certain procedures and the US serves as a bleed valve for them–those who have the money come down here and relieve some of the pressure on the Canadian health care system.

    The biggest problem (but nowhere near the only one) with fixing insurance and health care in this country is that large governments are subject to regulatory capture and influence from special interest groups, and both socialists and progressives lurve themselves some large, powerful governments to make us proles do what we’re supposed to.

    Which, as the beaches in California and Florida and the roads and parks in Colorado are proving THEY CAN’T DO.

    We got the system of employer provided health care in part because of the government’s attempt to over-regulate the economy (wage and price controls forced non-small employers to compete on benefits rather than wages, and paid health insurance was one). Asking the government–especially this current trainwreck (and I’m not talking about Trump here) of a government–to step in and fix it is like asking Dr. Mengle to take over the sick baby nursery.

  54. Ghillie Dhu says:

    You could at least get rid of the network-centric issues (which ISTM are the lion’s share of job switching problems with health insurance) if rather than having the insurer pay the providers based on procedures performed et al. the insurer paid out to the insured based on the condition. For injuries & acute illnesses, the insurer just cuts you a check based on the expected cost of treatment for the specific issue; for new chronic conditions, they’re on the hook for recurring payments even after you’re no longer their customer (so a new insurer needn’t worry about that preexisting condition).

    • Garrett says:

      > if rather than having the insurer pay the providers based on procedures performed et al. the insurer paid out to the insured based on the condition

      No, no, no! This way lies another pathology. The patient gets the service, gets the check and cashes it and never pays the provider. One of the benefits of being in-network is that you get paid directly by the insurance provider, bypassing the patient. How can this be a problem? Simple:

      A local major ambulance service had a problem with a small number of residents with wonky insurance. They would call 911 on a roughly weekly basis for something severe like chest pain, be seen at the ER and promptly discharged with no problem found. They would then be billed by the ambulance service, submit that bill to their insurance, collect the check and keep the money. (Of course they were judgement-proof).

      It wouldn’t have been a big issue if these were legitimate medical problems. Or if it was an occasionally missed payment – as noted, the paperwork isn’t always straight-forward. But this was clear … theft? Fraud? Something?

      Their solution was to stop billing these particular people. They’d call and ask for their bill and was told it was “on the house”. It took a few more calls before they got the hint and stopped calling 911. But designing a system where billing a patient encourages fraud is one which is hard to handle. And because it’s an emergency service, the ambulance service *can’t* refuse to pick them up and transport.

      • Ghillie Dhu says:

        Your dystopian scenario differs from what I’m proposing: the insurance company would only give the money to the patient for an actual diagnosis, not when they’ve received service. Cost-plus pricing, regardless of the payer, drives prices up.

        • cuke says:

          I don’t understand how this would work given the wide variability in treatment courses and outcomes with any given diagnosis. I could see how a hospital system could be paid the same amount for treating X diagnosis and because they treat a lot of them, the variation would even out. But I don’t see how it works to ask an individual to absorb the costs of that variability.

  55. David Young says:

    In terms of Kaiser, let me tell you a story. I am an oncologist and worked at Kaiser for a couple of years. This was over 20 years ago (but I don’t think anything has changed… my hunch). As part of my roll as a specialist, I had to take an afternoon every 6 weeks to see walk in patients. Any walk in patients. Those who did not need the emergency room, according to a phone triage nurse. So one afternoon I was seeing walk-ins, and this guy comes in complaining of a headache. Okay, I talking to this guy for about 5 minutes and it becomes immediately clear by his language and demeanor that he is schizophrenic. He has delusions galore. One of his delusions was that he former employer was after him. So, he confides in me that he intends to take a baseball bat, and go bash in his former employer’s head. On questioning, he tells me who it is that he intends to harm. So, I figure that this guy is a menace, incapable of thinking clearly and needs hospitalization under a 5150. I contact by phone the mental health department at Kaiser (in the same building that my office was in.). I was shocked by their response: “Oh, we know this guy. He does cocaine. Since he does cocaine, his health insurance through Kaiser does not cover mental health. So, we are not going to do anything about him (Good luck)”. So, not having anything else to do, (and unable to send him to the emergency room) I cancelled the rest of the afternoon’s walk ins, spent an hour finding out how to call the former boss, and then contact her by phone and tell her that her life was in danger. I also called the police, who replied. “we can do nothing because a crime has not yet been committed”. The former boss asked my why I could not arrest him. “sorry, I am a physician, not a peace officer”. Believe me, I was totally shocked that the Kaiser psychiatrists were not willing to help.

  56. SwampBuddha says:

    I’m really amazed by the numerous Kaiser apologists below. I am an internist on So. Cal. I routinely see disasters perpetrated by Kaiser doctors and, especially, mid-level providers. Since I do some forensic work, I have the chance to look at old records very closely. For many people, the care at Kaiser is DISMAL. I see dozens of examples annually. Also, many people do get adequate and even great care at Kaiser. It is very hit and miss. I learned of Scott Alexander from our teenage son, and I am in awe of his intellect. However, as a psychiatrist I think he is poorly positioned to opine on anything outside of psychiatry, at least if we view his thoughts as those of an “insider.” I should say that I have also seen disasters at UCLA, Cedars-Sinai, etc. The problems at Kaiser, in my view, arise from its colossal size and its captitated model. Many of the patients I see are “cared for” during complex illnesses by mid-level providers in order to……save money. I get it. I really have to stand against the intellectual dishonesty in all the fawning praise for Kaiser that I see in these comments. Alexander’s idea of “Medicare for All” would, in the end, be an abject disaster for most people. The current Kaiser, with all its faults, would look like concierge medicine compared to something like Alexander’s fetish. If you can afford it, you are best-served by a PPO. If you can’t, you can get very good care in an HMO but you MUST be informed, assertive, and you have to ask lots of questions.

    • cuke says:

      Kaiser serves 12 million patients and Medicare serves 44 million. If people are happy with Medicare, why would we imagine more people being covered by Medicare would look like Kaiser?

    • etheric42 says:

      Can someone send a link to where Scott said Medicare for All would be anything other than just better than our current system? I must have missed that one.

  57. Walker says:

    So I have the high-priced corporate insurance through Anthem and I love it. For the past 3 years I have had difficult to diagnose sinus and pulmonary infections. I’ve received outstanding care because I am a very effective health care user, e.g., I managed to get scheduled for nasal surgery with an over-the-top skilled doctor in less than a week by working the hell out of the system. I sympathize with those who are less capable but would likely be dead if I had to work within DMV quality government bureaucracy.

  58. Max Goedl says:

    — The businesswoman who was seeing me and doing well until the HR person at her job told her that she didn’t need to submit any forms to renew her insurance that year. That turned out to be wrong, and she missed The One Month Of The Year When You Are Allowed To Renew Insurance. She lost her insurance and can’t afford to keep seeing me.

    What exactly does “can’t afford” mean here? Doesn’t it simply mean that the insurance premium she used to pay for your services is lower than what you would charge her without insurance? Is the rate that her insurance payed you lower or higher than what you would charge her without insurance?

    If it’s lower, then there must be a price (between what you used to get from the insurer and what you would charge her without insurance) that she would be willing to pay and you would be willing to accept without the insurance. What is preventing you from exploiting this mutually beneficial deal?

    If it’s higher, the insurance company was cross-subsidizing her by paying you more than she payed them. But since insurance companies must at least break even, this means someone else was being overcharged for her/his health care. In this case doesn’t her loss of insurance imply someone else’s gain?

    (I have zero knowledge of the health insurance market in the US. I’m simply trying to test my reasoning.)

    • etheric42 says:

      There are a few likely outcomes here.

      One is that she wasn’t taking into account the cost of her premiums and it would be cheaper for her to pay out of pocket than copay+deductible+premium-discount-tax savings. This is possible but unlikely.

      Two is that thousands of dollars of her compensation are being withheld from her because she didn’t sign that form. Employers routinely pay 5-20 thousand dollars a year per employee subsidizing the premium and if you don’t accept the insurance they just keep their money. So while it may have been cheaper for her to pay out of pocket if she received her entire compensation, combining that cost with the lost compensation makes it significantly more expensive. This is very likely.

      Three is many US health plans aren’t insurance so much as cost redistribution, such that other people on her plan may be subsidizing her costs because she is receiving more benefits than she is paying in. Since not everyone has a desire or need to go to consume care just for fun, this normally prevents everyone from just maximizing their theoretical benefit.

      Four is many doctors do negotiate prices with people who can’t pay, but that costs extra time, emotional energy, and at what point does it stop? Sometimes it’s hard to define what your years of experience and credentials cost if you can’t just rely on “the going price”.

      It’s likely a combination of 2 and 3.

    • cuke says:

      Can’t afford means her employer-provided insurance used to require her to pay Scott $30 per meeting with him and paid Scott (or his practice) the remaining amount for the procedure (say $250). Now she’s on the hook for the full $280, which she doesn’t have. Scott could negotiate with her individually to only charge her $150, but then he’s out $130 each time he sees her. This doesn’t include whatever she now has to pay out of pocket for medication Scott is presumably prescribing.

      She probably paid something towards her insurance premium that would have been deducted from her paycheck, but it would look something like she pays $150/month towards employer-provided health insurance and the employer pays $650/month towards the premium. Some employers pay for the full premium amount, though that’s less common. At any rate, if seeing Scott once a month for $150 is not her only medical expense, she’s going to be out significantly more money than she budgeted for.

      This incidentally is why COBRA is not such a great thing. COBRA requires an employee who has just lost employment to pay the full cost of the insurance premium at the moment that they’ve lost their income, and the full cost may be close to $1,000/month. So losing health insurance coverage when you lose employment is a rotten situation that COBRA really does little to help with unless you’re already someone who has significant funds on hand. I mean, it’s better that COBRA exists than that it doesn’t, but it’s not something most workers can take advantage of.

      • Max Goedl says:

        Thanks, that is very helpful.

        But, given your numbers, shouldn’t the patient have (150+650=) 800 more in monthly income after her insurance ended? In that case, doesn’t “can’t afford” just mean “chose to spend the 800 on other things instead of seeing Scott”?

        • Edward Scizorhands says:

          No, the employee’s insurance cost was $800 a month. The employer paid $650 of it. If they lose their job, they don’t get that $650. (They stop paying the $150, too.)

  59. jasoncrawford says:

    From VC Bill Gurley:

    Despite widespread belief to the contrary, the U.S. healthcare system does not operate as a free marketplace with the type of open-competition that we often associate with capitalism. It is certainly not a single-payer system, but that fact alone does not make it a capitalistic system. There is no price evaluation during the purchase. The person paying is not the person consuming the service, and the majority of choices are made without comparative options. In many ways, we have the worst of both worlds. Our system, which is the highest in the world as a % of GDP, has the illusion of a free market and the illusion of regulated market with the apparent benefit of neither.


    • cuke says:

      Thank you for posting this here. I’ve been shouting this into the wind for years. I don’t really understand how our healthcare system keeps tricking people ideologically into thinking “free market yay!” and “more choice and availability yay!”

  60. Creutzer says:

    Typo issue: I am shocked, shocked to find that nobody has yet complained about the lack of a hyphen in the title of the post (“employer[-]provided”).

  61. Long Disc says:

    I am not sure that “any other system would fix these problems”.

    Many of problems you list fall into one of several classes:
    1) X is dependent on Y for insurance, Y would disapprove of X doing Z, so X cannot do Z
    2) X needs insurance for his chronic/recurring health problems, this limits X job choices
    3) Some doctors have rigid rules on which patients they agree to see (medicaid clinics, insurer networks)
    4) Some doctors have rigid rules on how they treat certain conditions (restarting trauma therapy – or may be I misunderstood that example?)

    Class 1 problems are much worse in Amish’ communal system and exist in the free market one if you replace “dependent for insurance” with “dependent for cost of treatment”.

    Class 2 problems can be pretty limiting in a free market system and can be worse than now as a person with a chronic condition may be unable to make any savings at all.

    Class 3 problems may not be relieved by doctor cooperatives or Biden system. And in a free market an unregulated insurance may also involve pretty arcane access rules. And I am not sure class 4 problems would be solved by any financing system.

  62. Manx says:

    To be fair, the stories where there is only one good therapist for X in town sound more like scarcity issues. I’m surprised they take any insurance at all.

    Mental health services are a difficult thing to cover with insurance, because demand >>> supply, and it is not in provider interest to accuratley determine need. Many people would happily see a therapist every week if they didn’t have to pay for it reguardless of how they are functioning. High functioning patients are often the easiest and most interesting, so therapists are happy to code them as having MDD or GAD and keep seeing them every week. There isn’t an easy way to determine need here. You can say everyone gets 10 sessions and that’s it, or you can say no-one gets sessions unless they end up hospitalized. Otherwise it’s an extremely difficult thing to determine who should or should not get free therapy. Free-market system works for those who can afford it, but of course the homeless guy isn’t going to be able to do that.

    • cuke says:

      If you are a mental healthcare provider and this is your experience, I defer to your experience. I am a mental healthcare provider and it’s not my experience, so sharing that here.

      The assumption I hear in what you’ve written is that healthy, high-functioning people enjoy therapy like they enjoy a good massage, and how nice that insurance pays for it. So that the incentives are 1. for therapists to abuse the system by overdiagnosing and keeping people in therapy when they don’t need to be and 2. patients abuse the system by going when they don’t need to.

      I am confident some of this goes in in the same way that people show up in emergency rooms when they don’t need to and people show up in doctor’s offices when they don’t need to. On the other side, there are a lot of people dealing with functional impairments due to mental illness that they are not getting treatment for.

      An then my experience in terms of the people I do see is 1. I have more work than I need and have no need or desire to keep people coming to me for a moment longer than they need to; I turn more people away than I see and 2. The people I work with have measurable, significant functional impairments that are getting in the way of their work, school, relationships, and parenting responsibilities. Without treatment, these people would lose jobs, need to go on disability, wreck marriages, hurt their children, and/or develop long-term chronic illness from untreated stress or substance abuse. Those harms aren’t theoretical to me because I can see what happens when people get care and don’t get care, just like a doctor can see what happens when a person gets hypertension treated and when they don’t.

      Those two dimensions above — more clients than I can see and clients seeking medically necessary care — captures the vast majority of my experience and that of my colleagues’. It doesn’t mean no one is ever overusing the system on either side, but I would say certainly not more than in any other area of medicine. Imagine all the unnecessary MRIs being done out there. I had an orthopedic surgeon try to foist surgery on me that was absolutely not necessary and I gather that is routinely done for the diagnosis I had. We have to accept when we care for large numbers of people that some portion of that care will be unnecessary and some people who need care won’t get it. Perfection is unattainable.

      The other piece is that a ton of people who are seeking medically necessary therapy are having to pay fully out of pocket for it even though they have insurance because they have high-deductible plans. The portion of people in that situation has risen rapidly in recent years.

  63. YanTS says:

    How would one look for good sex addiction therapist in Seattle?

  64. Doktor Relling says:

    Many of the posts here, in particular the comments by actuarians, illustrate the difficulties in overcoming the adverse-selection problem in a US type health system. Adverse selection implies that high risks tend to drive good risks out of the market, unless an insurance provider is able to differentiate risk levels.

    To avoid adverse selection (of high risks), an insurance provider must either ban high risks from the risk pool, or differentiate insurance premiums (charging more from high risks). An insurance provider who fails to do this is likely sooner or later to face bankrupcy.

    Others in this thread have pointed out how the second differentiation strategy is used in the US. However, notice that US reliance on subsidized occupational health insurance is also part of the story. This is a way to keep high risks out of the risk pool, since high risks (e.g. the born disabled, or the young borderline schizophrenic) are less likely to find an employer willing to offer them full-time employment in the first place. Essentially, the US occupational insurance system leaves much of the screening and offloading of high risks to employers. Not the whole story of course, but an important part of it.

    Digression: Internationally, this explains why white-collar workers, who are less risky than blue-collar workers, usually have better occupational health insurance schemes – at least unless blue-collar workers have strong unions. And government workers, including military personell, are well covered everywhere of course.

    The adverse selection problem is the main reason why almost all high-income countries operate some form of public health insurance coverage, or mandatory private coverage. The point is to make it impossible for low risks to exit the system, thereby avoiding the adverse selection problem. The basic political science logic here, is that the majority of voters are risk-averse, and/or know that they will become above-average risks as they age. Hence they have been able to vote down exit-prone low risks almost everywhere.

    US exceptionalism in this regard has always been an interesting puzzle for those of us who make a living studying welfare-political change across countries. My own hypothesis, for what it is worth, is that the main reason is to be found in the exceptionally veto-prone US decision-making system, making it much more difficult that anywhere else to pass major new legislation. The US seems to need a world war, a major & long-running depression, or – perhaps – a major epidemic disaster? – for political opponents not to block each other’s new policy initiatives for ever…

  65. cheetach says:

    I work in regulatory compliance for a major issuer, across several states, and I would love single payer. I’d give up my job any day if it meant people could find meaningful work regardless of heath. To promote efficiency, all of humanity should be able to contribute what we can without the wrong incentives (and no, don’t ask me about coordinator of benefits – we are all lost in that maze). Employer sponsored health insurance is a terrible premise. You don’t have a choice; you have the choice HR is giving you. Do you trust your HR benefits specialist to prioritize your family?

  66. ThaomasH says:

    I guess you don’t really need another reason to dislike employer “provided” insurance, but I’ll give you one anyway. The way most plans work (although some have a somewhat graduated employee contribution) the employer a higher percentage of a low pay job than of a higher paying job. Wonder why janitorial jobs nowadays are outsourced? If you were designing a new health insurance system would you finance it with a flat tax on employees? BTW, this critique is not original with me but contained in Deaton and Case, “Deaths of Despair.”

  67. cdoconnor says:

    I don’t think all other systems would fix this.

    The Amish don’t use mental health care. Trying to re-create the Amish program to use mental health care might break the Amish system or couldn’t scale to the entire society.

    A “free market” would price out people, so I don’t think you would actually call that working.

    Your biggest complaint is the association of insurance and work. This would be good to decouple, but we are path dependent at this point and probably only a big change will get us decoupled. And a big change, it is hard to say if it will fix all these particular issues. I would be like moving to California – you’d have to do it to see what happens.